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Retailers across the globe are reopening stores but continued rise in COVID-19 cases is dampening the spirits of consumers who now prefer to shop only for essentials through online sales channels.
Brazil upgrades malls even as digital sales surge
In Brazil, 10 per cent of malls reopened in April, reported Bloomsberg. The country’s largest mall operator BR Malls reopened four out of its 29 Brazilian stores by May 22. They also imported 104 cameras with infrared sensors to measure the body temperature of shoppers while Natura & Co tested drive-through and curbside pick-up in 30 shopping malls within Brazil.
The retailer also added beauty consultations via WhatsApp with all its brands which led to a 30 per cent surge in digital sales between mid-March and the end of April, revealed Brazilian e-commerce association ABComm.
Italy offering retail bonds to boost sales
One of the hardest hit by the Coronavirus, Italy began to reopen stores on May 18. However, as the country could reopen only one third of its stores, it is now offering inflation-linked retail bonds to investors as a way to jumpstart its suffering economy. However, e-commerce activities in the country increased by 81 per cent from February to April-end, reveals McKinsey.
Australia benefits from new apps
The May report of Australian Bureau of Statistics reveals that retail sales in the Australia fell by almost 17.9 per cent in April after 8.5 per cent spike in March. However, retailers benefitted using installment payment services. Fashion retailer the Cotton On Group was able to increase sales with its new app, iOS.
Sweden enhances e-commerce activities 
Instead of shutting their stores, retailers in Sweden simply emphasized on maintaining social distancing in stores and improving e-commerce activities. This led to a 39 per cent year-on-year decline in apparel sales in March in the country.
Global brands in some of the biggest malls in the country have temporarily closed stores based on recommendations from other countries. These malls are seeing lack of visitors as more shoppers are moving online.
Retail sales in South Korea increase by 3.9 per cent
South Korea’s retail market was hit especially hard by a lack of international visitors due to the outbreak in China. However, now there are signs of bounce-back as in April 2020, retail sales amongst the country’s 26 largest retailers grew by 3.9 per cent year-on-year, notes, the country’s Ministry of Trade, Industry and Energy. Korea is also witnessing a switch in its shopping patterns from offline to online with online sales in the country increasing by almost 80 per cent.
Discrepancies in rules harming German retailers
A survey of more than 600 non-food retailers, conducted in mid-May by Handelsverband Deutschland, a German retail trade association, found that about a third of the retailers in the country are doing only 50 per cent of the sales that they were doing last year. This is mainly due to the different rules set by each of the 16 German states for their consumers.
High COVID-19 cases leads to dramatic fall in UK retail
As a result of over 270,000 confirmed cases and over 38,000 deaths, retail sales in the UK have fallen dramatically. The Office of National Statistics reported that the total number of goods sold in the country dropped over 18 per cent in April. On the other hand, e-commerce sales increased by over 30 per cent. Big retailers like Tesco and Sainsbury led this e-commerce growth. Their sales increased by double-digit percents last month.
A survey titled “Sedex Insights Report: Covid-19 Impacts on Businesses’ reveals revenues of Bangladeshi export oriented apparel and footwear manufacturers declined 77 per cent due to the COVID-19 pandemic impact. The survey conducted on 3,300 buyers and suppliers across 118 countries showed the garment and footwear sectors have been worst affected by the pandemic. Of the total surveyed, 469 suppliers from garment and footwear industries are from China, India, Bangladesh, and Turkey. According to the findings, 68 per cent member countries reported a significant decline in their revenue while only 38 to 55 per cent on average reported its customers are being supportive during the pandemic.
Only 10 per cent respondents have seen an increase in or steady revenue, the survey added. Almost, 43 per cent respondents viewed disruption to supply chains and inability to get input of raw materials as the biggest challenged they faced. Reasons for this included delay in raw material delivery, suppliers stopping production, and higher prices of raw materials or transport. On the other hand, 20 per cent respondents have had orders cancelled by customers and 4 per cent experienced delayed payment terms, it showed.
The combination of squeezed production times and poor purchasing practices puts significant additional pressure on suppliers and workers, increasing the likelihood of poor working conditions, it added.
The Chinese government proposes to increase the new annual tax-free shopping limit to RMB1t00,000 ($14,000) per person in Hainan, China’s southernmost province. This will help the country to ensure its citizens shop only from its prestigious local brands. The new limit is more than three times the current RMB 30,000 ($4,200), and forms part of a much broader 60-point plan for the construction of a free trade port on the island.
Some of the other aspects of the free port plan relevant to duty-free retailing include its intention to grow tourist numbers by making Hainan an international aviation hub; liberalizing air rights including fifth and seven freedoms; and the construction of a cruise tourism pilot zone.
Hainan’s offshore duty-free policy was launched in April 2011. The allowances are available to domestic and foreign visitors including residents of Hainan province who are at least 16 years old and who board flights, trains, or ships to leave the island province.
Government statistics show that Hainan generated duty-free sales of almost $8 billion since 2011. Duty-free products that can be bought cover all the key luxury categories including jewelry, watches, perfume, cosmetics, sunglasses, fashion and accessories, as well as sports goods and confectionery.
The main offshore duty free enterprises in Hainan are China Duty Free Group’s extensive Haitang Bay Shopping Complex in Sanya, and Haikou Meilan International Airport’s duty free stores. Earlier this year, two smaller duty-free shops were added to the mix: Haikou Riyue Plaza and another in Qionghai Bo’ao.
As the LVMH’s deal with Tiffany & Co seems uncertain, board members of LVMH Moët Hennessy LouisVuitton have urged the two companies to reconsider the deal. Members are concerned about the impact of Coronavirus pandemic and the growing social unrest over the death of George Floyd at the hands of Minneapolis police.
The outpouring of anger over racial injustice in America has prompted widespread demonstrations in the country scuttling attempts to get the economy moving again. In addition, LVMH board members have voiced concerns about Tiffany’s ability to cover all its debt covenants at the end of the transaction, which was expected to be concluded mid-year.
As no firm decision could be made at the meeting, attendees urged the board to reconsider the deal. Combining the financial firepower of the world’s largest luxury group with the iconic American house, the deal was heralded as a master stroke by Tiffany, which could use the might of LVMH to both power its jewelry business and also gain a much larger presence in the US.
Accord on Fire and Building Safety in Bangladesh has handed over all its operations to the RMG Sustainability Council (RSC). However, Accord signatories will continue to fulfill their obligations under the existing Transition Accord agreement through the work of the RSC.
RSC is a newly established not-for-profit company in Bangladesh created and governed by global apparel companies, trade unions, and manufacturers. The RSC was officially registered in Bangladesh on May 20, 2020 to be a permanent safety monitoring and compliance body in the RMG sector in Bangladesh.
The council will continue with factory inspections, remediation monitoring, safety training, and a safety & health complaints mechanism at the RMG factories supplying to Accord signatory companies. These programs will be implemented in accordance with the protocols and procedures developed by the Accord, which have also been inherited by the RSC.
The RSC will appoint a Chief Safety Officer (CSO) to lead the inspections work. The CSO’s performance of technical duties will be free of interference from the RSC governing body. The independence of the existing safety & health complaints mechanism that is available to workers in factories supplying to Accord signatory companies shall also be safeguarded under the RSC.
Bobby Arora, Director, Status Quo
“We wait for customers to come into our stores. At this moment it is important for every offline retailer to reach out to their customers and tell them about the new products they have started selling. They need to tempt and bring their customers to buy their product and when they buy they will obviously come in and buy more products. Sometimes even though we do not want to buy online but the continuous rotation of ads tempt us to buy the product but this doesn’t happen offline. In today’s situation retailers will have to adopt this approach of showing customers the products they need as it could be they are delaying the purchase of these products.”
Masks have become more of a necessity than a fashion accessory in COVID-19 era. “It has become very important to wear masks before stepping out of homes, people are stocking around six to eight types of masks to match their outfits,” observed Bobby Arora, Director, Status Quo at #3 webinar organized by DFU Publications-DFU LIVE on May 30 on the topic: ‘New Categories Dikhao, Sales Badhao’ (Emerging New Categories for Apparel Retailers, Post-Covid). Arora said, “Today, no one can step out of their homes without wearing a mask though they are not very comfortable. However, as long as current restrictions prevail, everyone will have to wear them.”
Currently, there is a huge shortage of surgical masks in India. “It’s important to secure these masks for our health workers and people involved in treating COVID-19 patients. These masks are not reusable and need to be disposed off after each use. On the other hand, cloth masks are washable hence reusable,” Arora explained.
Better communication to facilitate sales
According to Arora, as masks have high demand, it is important for retailers to keep customers updated on their stocks and sales. “Retailers need to inform their customers about the category of masks they are selling,” he said. Noting there are very few customers for masks in the market, Arora said, “There is a tendency amongst consumers to delay mask purchase. E-commerce companies keep complete track of consumers’ choice of masks and their preferred price points. However, offline companies fail to achieve this. They wait for customers to come to their stores whereas they need to reach out and enlighten consumers about their new products and how they can be bought online.”
Arora pointed out though some consumers do not prefer to buy products online, they are tempted by the continuous advertisement of a product on social media channels. “However, this is not the case with offline retailers who need to emphasize the importance to their customers,” he added. Though masks may not bring in significant revenues for retailers, they are a value-driven and inexpensive product to stock. “Masks enable retailers to reach out to their customers in their times of need. In turn, this will increase customer loyalty towards them not just for masks but also other products,” Arora summed up.
Daniel Morris, co-founder of The Morris Fyfe Agency in Brick Lane, east London, has launched an online petition calling for business rates grants and holidays for retail companies to be extended to include wholesale agents and distributors. London-based Double H Agency, Love Brands, Jonny Drama, Just A Group, FOF Fashion Marketing and Brand Machine Group, as well as Manchester-based agency Red Alert, are among the signatories so far but Daniel plans to extend the campaign to cover all affected sectors.
Currently sales agents and distributors, who are typically self-employed or directors drawing dividends, do not qualify for the sort of help from central government or local government that is available to the many retailers they supply.
The petition states: “The business rates relief for retail companies should be extended to include wholesale agents and distributors whose businesses have been equally affected by the shutdown. Our business, like many others, is 100% reliant on retail. Since the outbreak, our customers have been mostly furloughed and no one is visiting wholesale showrooms. Our office is obviously closed and all of our customers have closed their doors.”
Daniel adds: “In short, we fully support the government business rates 12 month holiday for retailers and only ask to be treated the same, as we are part of the same supply chain and therefore paying the price in terms of reduced income from retailer cancellations, discounts and delays. We believe that the government doesn’t really understand and recognise the role we play in getting goods to market and how we are recompensed – at least that is the only justification we can think of, for not being included in the COVID19 government support. My petition is saying that we are directly related to retail and should be considered in the same bracket. With buyers furloughed, offices shut and those people working doing so from home, those of us with retail showrooms are experiencing a similar impact to retailers. In fact, you could claim it’s worse, as we don’t sell through websites. We can’t just walk away from our showrooms, so they are staying full of samples with no visitors. We’re not eligible for the 12-month rates holiday, or the £25,000 grant for ratepayers in the retail, hospitality, tourism and leisure sectors, because we’re not classed as retail, and I can’t get the small business grant funding of £10,000 because my rateable value is above £15,000. The only logical next step has been to launch the government petition.”
The European Union is mobilizing over €334 million for the fight against COVID-19 and its consequences in Bangladesh. This alongwith a €20 million German grant will help the Government of Bangladesh to provide cash assistance to workers in the export-oriented industries adversely affected by the economic fallout of the pandemic, and contribute to boost the resilience of the national social protection system.
This amount is part of the EU’s ongoing development cooperation programs in Bangladesh. The Union is already addressing many areas crucial in the COVID-response and the recovery of the economy. The €334 million allocated to help Bangladesh fight the pandemic is on top of the ongoing programmes, the European Union said in a rectn press release.
In addition, the French Development Agency – Agence Française de Développement – (AFD) will support the Bangladesh Government with €150 million to improve the country’s social protection measures.
The €113 million grant will suffice for three months of wages to about 1 million workers laid off by readymade garment (RMG) factories in Bangladesh. Under the grant, a worker will get Tk3,000 a month for June, July, and August.
The French government recently announced that it will postpone its summer sales by three weeks in order to give independent retailers time to shift spring inventory at full price and restore their cash flow.
The sales will now begin on July 15 and last four weeks. The discount period had originally been scheduled to run from June 24 to July 21.
The Fédération Nationale de l’habillement, which represents independent French retailers, welcomed the announcement.
The government was trying to find buyers for ready-to-wear chains that have filed for bankruptcy as a result of the coronavirus crisis, including Camaïeu, which employs close to 4,000 people, and La Halle, where 2,200 jobs are at risk. It now expects the French economy to contract by 11 percent in 2020, versus an earlier forecast of an 8 percent drop.
Daniel Grieder recently quit as the CEO OF Tommy Hilfiger Global and PVH Europe.
Grieder joined Tommy Hilfiger’s European management team 23 years ago, and has been in charge of the label’s business in Europe since 2006. He notably masterminded the ANandevelopment and successful deployment of Tommy Hilfiger’s ‘see now, buy now’ strategy.
To succeed Grieder, PVH Corp has appointed Martijn Hagman, an executive with over 12-years of experience in various senior management posts within the group. Hagman, born in the Netherlands and formerly with auditing and consultancy firm Ernst&Young, is currently the COO of Tommy Hilfiger Global and PVH Europe, and the CFO of Tommy Hilfiger Global.
