Fashion sector struggles to adjust to life under coronavirus
Some stores in Europe begin to reopen with safety protocols, but textile sector expects to lose 37% of annual turnover due to health crisis
With Catalan firms in Europe, such as Mango and Desigual, beginning to reopen stores with protocols to ensure the safety of customers and workers, in Catalonia and Spain in general, there are no clear plans for getting the fashion sector back on its feet.
For the moment, fashion companies are looking into disinfecting stores, restricting the numbers of customers allowed inside at any one time, asking them to wear gloves, and limiting changing rooms to a single person.
And while the closure continues, the sector is reinventing itself, trying to alleviate losses with producing medical supplies, or promotions and discounts. Nevertheless, the textile industry confederation (Texfor) estimates a 37% loss in annual turnover due to Covid-19.
The impact of the crisis on the textile sector will be "very significant," says Texfor secretary general Marta Castells. According to data from a survey of its members, more than half of the companies in the textile sector predict a drop in turnover of at least 30%.
As for how the coronavirus pandemic is affecting staff, some 60% of companies in the fashion and textile sector have already submitted an official request to temporarily lay off employees until the health crisis is over.
"There's a negative impact, a significant slowdown in sales, which can only be recovered through online channels," says the CEO of Bobo Choses, Joaquim Esperalba. The Mataró firm expects a 15% drop in annual turnover, after making 11 million euros in 2019.
Beyond this year, the crisis could play a relevant role in transforming the sector. For the designer of the Barcelona haute couture firm Ze García, José María García, fashion will focus on local production, experience, and sustainability.
"There are more sustainable collections and more interest in consuming clothes of this style," adds Guillermo Corominas, director of institutional relations at Mango, which in 2019 produced 18 million articles of this type.
Meanwhile, Mango's online sales amounted to 24% of total revenue last year, and e-commerce could be a beneficiary of the crisis, although not everyone agrees: "The future of online exists," says designer José María García, but he sees it as a “complement.”
Reopening stores in Europe
In the meantime, Mango is preparing to reopen its stores in Germany, Austria, and the Netherlands, although it will restrict entry and only allow one customer inside for every 10 or 20 square meters of space.
It will also provide customers with gloves and disinfectant gel and make employees work in masks. Only half of the changing rooms will be open and garments that have been tried on will remain in “quarantine” for 48 hours before going back on the shelves.
Desigual will also control the capacity of its stores and will only allow one person at a time to use the changing rooms. Garments will be disinfected after being tried on, and the opening hours will be cut down from 12 noon to 6 pm.
The transformation of the sector
The sector has also been reinvented by coronavirus with some firms making medical supplies. “We've shown things would have been more complicated without the contribution of the textile industry, which until now was not seen as essential,” says Castells.
Mango is one such company. “We have transformed our sample creation process for regular garments into a large-scale medical gown production system,” says Corominas. The company will make 13,000 disposable polyethylene medical gowns.
Manresa designer Míriam Ponsa has also suspended fashion catwalks to make hospital masks and gowns. The company works with fabric made for medical use and sews the products in various workshops in the Bages county.
Bobo Choses will start producing a batch of a thousand masks for children next week and will modulate production based on demand. The aim is to encourage children's "excitement" and "creativity," despite the "gravity of the moment," says Esperalba.
Demands on the Spanish government
Faced with the crisis, the textile confederation does not think the Spanish government's aid measures are enough to address the liquidity problems of companies, despite approving an extension of the deadline for paying taxes for small and medium-sized businesses.
However, the impact of those measures on the textile industry is "minimal," as the regulations are aimed at companies with a turnover of less than 600,000 euros, a figure that is usually exceeded in the case of industries.
"We are asking for an increase in the amount of turnover because most companies are being left out," claims Castells, who also proposes extending the deadline for submitting the settlement of accounts beyond May 20.
At the same time, the textile industry is demanding that the process of granting credits be speeded up, and more flexibility to labor measures and aspects related to temporary lay-offs, as well as providing direct aid to companies through subsidies.
Half of hairdressers under threat of closure
At the same time, the hairdressing sector is also fearful about the future, after a new study estimates that the coronavirus crisis could lead to the disappearance of some 1,900 hairdressers in Catalonia, or 46% of such businesses in the country.
The survey by the Alliance of Hairdressing Entrepreneurs of Spain and the Catalan Federation of Hairdressers and Beauty (FEDCAT) also says that 60% of respondents in Catalonia expect a loss of turnover of more than half.
Meanwhile, 68% of hairdressing companies have applied to temporarily lay off employees, some 88% of those surveyed say they will halt the investments they had planned for this year, and 76% say they will need funding to reopen their doors.
As for home services, almost one in four hairdressers has received applications, but less than 1% have provided such services, as this service is only to be provided in cases of need to vulnerable and unprotected people, and not for reasons of beautification.
The sector says the measures from the Spanish government are "absolutely essential," as, without them, 85% of hairdressers would have disappeared. Yet, it also calls for more flexibility regarding temporary lay-offs so that staff can return to work gradually.