Global apparel forecast to decline by $2970bn in 2020, says GlobalData
Apparel is projected to be the most heavily effected retail sector due to the COVID-19 crisis, as the global apparel market are estimated to decline by 15.2% this year which will be equivalent to $297bn. According to GlobalData, a leading data and analytics company.
Honor Strachan, Principal Analyst at GlobalData, says: “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.”
Though the recovery has already started to occur in several markets released from lockdown and social-distancing measures, it is changing hugely depending on consumer confidence, the country’s reliance on tourism, the state of economy and unemployment, and the level of “revenge buying” (sudden release of pent up demand from those willing and able to spend).
Strachan continues: “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. However, players in the likes of Hong Kong (which is 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 H2, across the 49 markets we cover we do not expect this to make up for the lost periods of trading in H1. The global apparel market is not expected to return or exceed its 2019 value, until at least 2022.