Just over five weeks into the UK’s coronavirus lockdown, and fashion retailers are – tentatively – planning how to reopen stores.
The industry is eagerly awaiting the government’s go-ahead to resume bricks-and-mortar trading. This week, John Lewis revealed it has created a three-stage plan to reopen its store portfolio once restrictions are relaxed, and Next outlined plans to open larger, out-of-town stores as a priority.
But while stores can be adapted to bring in necessary social distancing measures, a question mark remains over what this will do to their profitability. The British Retail Consortium (BRC) has published store reopening guidance that includes measures such as limited entry and exit points, temporary barriers, cleaning stations, one-way systems and even keeping changing rooms closed.
Fashion’s top concern will be, of course, to keep staff and customers safe. But there is no escaping that these social distancing measures, while necessary, will add to retailers’ store bills at a time when fewer customers will be coming through the doors. Footfall was already in decline before the coronavirus crisis hit, and is unlikely to bounce back quickly.
Many retailers will pin their hopes on heavy discounting to entice shoppers into stores, and help clear some of the spring/summer stock currently languishing in warehouses.
However, like the boy that cried wolf, fashion retailers have relied too heavily on price cutting to drive trade over the past few years. Sale events have lost the pull they once had and, even if effective, discounting will only erode margins further.
Many retailers were reassessing their bricks-and-mortar store estates as part of their long-term strategies, but this will now be dramatically accelerated. It has been reported that John Lewis is “unlikely” to reopen all 50 of its stores once the lockdown is lifted, and Debenhams has confirmed that seven of its stores have permanently pulled down their shutters.
There will undoubtedly be a transition period in which shoppers remain worried about hygiene and the risk of spreading infection, and so opt to stay away from stores. As stores become less profitable, only the strongest will survive. Some well-known fashion names may disappear from the high street altogether.
But the coronavirus crisis will not last forever, and gradually people will start to meet up with friends, attend events and go on holiday again – and they will shop for clothes.
Indeed, optimists predict people may find a new appreciation for their local high streets, as they emerge from enforced isolation and seek social interaction.
Rather than simply joining in the discounting frenzy, retailers should look at how they can provide an experience and sense of community in stores that will connect and engage their customers. If they can crack that, footfall – and profits – will return to a healthier level in due course.
Drapers’ coronavirus update
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