The global apparel market is estimated to decline by 15.2% in 2020, which is equivalent to $297 billion, indicates data and analytics company GlobalData. Apparel is set to be one of the hardest hit retail segments due to the COVID-19 pandemic.
“The 10 worst impacted markets, in terms of value, will represent the vast majority of this total loss with mature regions suffering the hardest – the US will account for more than 40% of all lost spend, which will contribute to more major chains filing for chapter 11 over the next few months,” stated Honor Strachan, principal analyst, GlobalData.
Although recovery has already started across markets released from lockdown and social-distancing measures, it is varying dramatically depending on consumer confidence. Factors such as the country’s reliance on tourism, state of economy and unemployment and the level of “revenge buying” – sudden release of pent up demand from those willing and able to spend – will play a role in determining the pace of recovery.
“Some brands across China for instance are seeing store sales reach back up to 80-100% of pre-COVID-19 trading levels, while apparel retailers in parts of Germany are also experiencing a better bounce back than forecast,” indicated Strachan. “However, players in the likes of Hong Kong, heavily reliant on tourism spending, are experiencing far tougher trading conditions, and it is too soon to assess the recovery in Italy but we expect it to be long and drawn out – the same will apply to France, the US and the UK.”
Even if retailers in some markets do experience revenge spending in the initial months following a lift in lockdown and then see trading return to 2019 levels later in the second half of 2020, across 49 markets that GlobalData analysed, it won’t make up for the lost periods of trading during the first half of the year. The global apparel market is not expected to return or exceed its 2019 value, until at least 2022.