Fashion verdict: Zara and Bershka are closed around the world

More than a thousand stores of such famous brands as Zara, Bershka, Massimo Dutti will be closed around the world. The company Inditex, which owns these brands, announced the restructuring. The reason for the drop in sales and losses during a pandemic. In a difficult situation and complains about the Russian fashion industry and retail.

the Fashion business this year will fail, experts say. Problems in the industry appeared long ago, but the pandemic and its restrictions will be for many the last straw. The first victim in Russia have already appeared. In late April, the media reported the closing of the shops of men’s and women’s clothing Fashion House. The company operated 25 stores, mostly in the capital.

“of Course, such a crisis had never been. Even in the most difficult times still the consumption was stable, the budgets of the procurement was done,” said George Lenders, the managing Director of Fashion Hab Russia, President of the International Association buyers.

Now clothing sales collapsed almost completely. In April, according to Rosstat, at 82 percent compared to March. Shoes – 70 percent.

And another record: high startnest goods. There were no buyers — products remained in the warehouses. Stock garments, according to Rosstat, enough for a year and a half for 574 days. By the way, for buyers in the short term it may even benefit.

“Many mass-market brands, just network, will demonstrate an advantageous offer. It will not be huge discounts at 70-90%, but best offer will: 30-60 percent,” — said Anush Gasparyan, chief financial officer Fashin Consulting Group.

After the closure of shopping centres, retailers in Russia lost their main distribution channel. Despite the rapid growth of online trading, in the whole country on the Internet accounted for only 12 per cent of total sales. Moreover, small regional companies are unable to quickly readjust to new model of trade.

Even so, the international fast fashion giant like H&M, announced the total drop in sales of 57 percent, and that given the availability of our own online store. There is turnover, of course, increased by a third. But the losses from the closure of offline points of this growth to cover could not. Looks like the picture said and presented another major network, which is widely represented in Russia.

“Our loss for the 2 months amounted to 2 million rubles,” — said Ksenia Ryasova, President of Finn Flare.

Fashion retailers are faced with a low demand. Moreover, this trend was noticed in Russia in 2019 — while sales of clothes and shoes for the first time in several years fell by 3-4 percent. Under the influence of the pandemic, this trend has only strengthened.

“the Market was very saturated — products, volumes, and this has led to what is now the volume of production, which are on the market, is not digested. Consumer activity has fallen dramatically”, — said Georgy Lenders.

Many had expected after the opening of shopping malls and stores, people rush for shopping. But the data for the first week of June suggest otherwise. Expenditures of Russians on clothes and shoes still in the red. Buyers do not rush to the shopping malls.

While experts say in General about the strengthening of new trends in conscious consumption, reducing purchases. And increasingly in the industry began to talk about the imminent decline of the era of fast fashion.