The coronavirus pandemic has impacted the economy and society of the USA that surpasses the effects of its previous disasters, such as the Revolutionary War, the Civil War, and the Great Depression. The country never has such great hardships and lost so much in a short span. It has fired many employees, cut down trillion dollars out of the market, and endangered the survival of hundreds of thousands of American companies.
COVID-19 Hits Fashion Retailers Hard in the US
The economic and social impacts of COVID-19 were unprecedented and have caused the fastest and largest shift in the fashion industry. Many lost jobs, incomes, homes, savings, and retirement incomes overnight. It is suggested that the US may go from the lowest unemployment rate in our lifetime to the highest within weeks. The fashion retail industry has suffered a significant loss of all the other sectors. Many fashion designers and brands have come forth to share their grievances.
Vogue recently interviewed a few of the fashion retailers and enquired about their challenges. Andrey Dryden, the co-founder of LA’s menswear mecca Departamento, during the interview, said, “The supply chain is severely affected by this. I can only imagine, in the coming months, how it will affect things for next season… There is no question that it will be a challenging year ahead of us.”
- Impending Cash Flow
Lockdown is just one of the concerns of the fashion brands; the real problem that stands in their way is less cash flow. Sales can’t alone fix the situations, instead, keeping everyone employed and health fitness, including mental and physical. Retailers, too, have been forthright about the struggles posed by “stay-at-home” and “shelter in place” regulations.
- Government Support
Recently, the CFDA and 90 business groups, like the National Retail Federation, the Accessories Council, and the Fashion Footwear Association of New York, wrote a letter to the White House. The intention of sending a letter to President Trump was to bring his attention to leading the house’s predicaments. They also called for his intervention for economic stability amidst the coronavirus pandemic. The letter concludes by encouraging policymakers to develop proposals that support the retail workforce and to provide a “bridge” for retail businesses of all sizes to stay viable during the crisis.
- Changing Business Lines
Many of the leading brands who feared of shutting down their businesses have changed their product line during the coronavirus pandemic. Amazon alone is adding at least 100,000 to its workforce; the epidemic has made the shift to online retail permanent and decisive, thus, creating a haphazard like situations where everyone wants to do everything buy nothing is achieved.
Brighter Side After the Pandemic
These are the challenges that fashion retailers are facing, but not all is lost. The pandemic has opened a window of opportunities.
Let’s look at the brighter side of the picture and understand how it is going to strengthen the economy:
- Reallocation of Capital
After the pandemic, as the stock will recover, the investors won’t put their money on the same funds which were previously unused or undercapitalized. Therefore, the American economy will be fundamentally altered. The wealth will massively shift across the US, and a considerable amount will be reallocated to other stocks and funds.
- Sustainability becomes Imperative measure
Until factories started to feel the effects of Covid-19, the global fashion business was producing 150bn items of clothing each year, far over the needs of a worldwide population of 7.9 billion. Clothing consumption globally was in 2017 projected to rise still more, by 63% by 2030, according to the Global Fashion Agenda and Boston Consulting Group. According to Lucy Siegle, environmental journalist, and broadcaster, “we need a chance to reboot our efforts and change our course based on evidence and facts.” Thus, we need to adapt the strategies that are put on the earth first and our greed last.
To sum it up, yes, we have uncertain and painful times ahead, but we must use this time to rethink how the fashion industry can be redesigned with respect for the planet and the health of the people who work in it. iDesigniBuy is a fashion tech company that offers customization solutions that put earth first notion.