With many countries still handling the global coronavirus pandemic, many industries in the world were greatly impacted by the pandemic. From the movie industry halting many releases of movies, to the tv show industry stopping production for many of our favorite shows. The fashion industry has been greatly impacted by the pandemic in many different forms as well. Fashion Week was turned into a Virtual Presentation courtesy of popular apps such as TikTok and the Met Gala was also forced to cancel their extravagant event for the year. Now, it’s been reported by The Business of Fashion and McKinsey Company that the fashion industry’s economic profit is set to decline by 90 percent in 2020.
Founder and CEO of The Business of Fashion, Imran Amed made a statement stating that “While the fashion industry has experienced its worst year on record, the pandemic has also prompted a long-overdue reckoning for the sector, creating an opportunity for industry re-invention and reset in the coming years. Digital adoption and innovation have been catalyzed by the pandemic, even while consumers have become more aware of the plight of vulnerable workers in the value chain, creating expectations for fair treatment of all workers in fashion’s value chain. In the post-coronavirus world, the fashion system will need to be rewired to become more responsible, more sustainable, and more human.”
With the 90 percent decline, it’s been stated that this decline is worst compared to previous years. Global fashion sales declining up to 15 to 30 percent more in 2020 compared to 2019. According to Fashion United, Europe will see a 22 to 35 percent decline in sales, the US will see a 17 to 32 percent decline, and China will see a 7 to 20 percent decline. Online sales seemed to be the reason a lot of revenue was pushing through the fashion industry. Online sales saw the equivalent of 6 years of growth in 8 months. This means a lot of fashion executives feel like their online business grew more in 2020 compared to previous years.
According to Business of Fashion, they predicted the faith of the fashion industry by dividing it into two scenarios. Those two scenarios being “Early Recovery” and “Later Recovery“.
During the Early Recovery, scenario envisages that global fashion sales will decline by between 0 and 5 percent in 2021 compared to 2019. It’s important to note that this scenario was predicted in hopes of successful virus containment in multiple geographies. Also during this scenario, the fashion industry is set to return to 2019 levels of activity by the third quarter of 2022.
The Later Recovery scenario, which is less optimistic compared to the Early Recovery. The Business of Fashion predicts that we’ll see a sales growth decline by 10 to 15 percent over the coming year compared to 2019. They created this prediction for the Later Recovery, thinking about the possibility that the coronavirus pandemic continues to wreak havoc in many places in the world with a large fashion industry revenue.
They also released a video further explaining the state of the fashion industry in 2021. Which you can view below.
As the year 2020 comes to a close, many industries in the world are very optimistic about what is in store for them in the year 2021. Especially when many of them are adjusting their businesses to Covid-19 friendly guidelines. Hopefully, with the fashion industry declining by 90 percent this year, it will help them view things from a different viewpoint so this decline will never happen again.
