This week marked a sharp turning point in the coronavirus crisis for UK fashion retailers and brands – and their customers – as the government ramped up measures to contain the infection and already-quiet high streets became ghost towns.
Retailers closed large swathes of stores in mainland Europe and across the UK. Footfall plummeted. Employers were left with extremely difficult decisions to make: how best to protect staff and customers, while keeping their businesses afloat and preserving jobs in the longer term.
In Ireland, schools closed last Friday (13 March) and several shop owners sent staff home and pulled down their shutters, concluding that the impact on their businesses in the short term – painful as it will undoubtedly be – is nothing compared with the wider public health implications of choosing to stay open as the virus continues to spread. As Irish department store McElhinneys’ general manager says: “Sometimes you have to look beyond your own business.”
The UK government followed suit this week, announcing that schools would close from Friday 20 March. Many retailers, including Selfridges, Reiss, Dune, Fenwick, Urban Outfitters and Calvin Klein, announced temporary store closures.
The concern now is what happens if this lasts for more than a few weeks, or even into the autumn/winter season. Laura Ashley called in administrators on Tuesday, and a prolonged period of store closures or significant drop in sales will push others with a weak balance sheet to the brink of collapse.
The chancellor announced some help for businesses this week, extending the business rates holiday to all retailers and providing £330bn in government-backed loans and guarantees.
However, retailers still need to cut costs in the short term and sadly, this is resulting in the inevitable: suppliers are being squeezed. Monsoon Accessorize is among those to have extended its supplier payment term to 120 days, effective immediately, and we are hearing worrying reports of other high street retailers taking a similar approach.
This is already one of the most challenging years in living memory for fashion retail. The way through is not to make knee-jerk decisions and pass the pain on to suppliers, but to work together: do whatever is needed to protect yourself, your staff and your customers; control your costs; and communicate closely with your suppliers, landlords and factories to ensure they can do the same.
We hope you stay safe, and please let us know how you’re coping with the crisis by emailing email@example.com.
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*This article was updated on 20 March