Luxury and fashion companies to be hard hit by economic lockdown – McKinsey

Date:

Share post:

As consumers sober up, due to the ongoing lockdown, spend on non-food and non-health products are expected to take a hit. Fashion and luxury businesses will feel the impact more, according to giant consulting firm, McKinsey & Co.

A survey released by the consulting firm on Wednesday said sales at fashion retail stores will dip by as much as 40%. Hence employees in the sector may face “hardship and destitution”.

Weaker economic activities have seen businesses placing workers on temporary redundancy or full layoff consequently affecting family incomes and spending power across the globe.

Cancelled orders due to thin discretionary budget and store closure will hammer the $754 billion fashion and apparel market. McKinsey reported that 80% of the luxury and fashion companies surveyed will see financial hardship and bankruptcy within the next 18 months if the lockdown is extended excessively.

However, the consulting giant said retailing and fashion firms that survive will need quick intervention such as the proposed stimulus package by government, and a tweak to previous operating models, to survive possible recession.

Some of the survival strategies for players will include deep discounting. Low priced extensions will also soothe the market. Next is bold digital efforts to build value around virtual shops including home delivery, as social distancing is expected to be a norm for a long time.

Toyin Afilaka
Toyin Afilaka
Toyin Afilaka writes with simplicity and insight. He aims to enrich the Nigerian small business landscape. Through Hustle24 he connects entrepreneurs with information about new policies, enterprise solutions and opportunities that will aid their 'hustle'. He has written extensively for CobraReview, a product review portal, and served as a lead project manager for MarketingMix where he consulted as PR consultant for MTN Project Fame and Business Next Titan etc.

LEAVE A REPLY

Please enter your comment!
Please enter your name here
Captcha verification failed!
CAPTCHA user score failed. Please contact us!

Related articles

4 strategies from Bezos that would change your business

Success sometimes can grow to become a craft that leaves behind trails for others to follow. Jeff Bezos...

How to cultivate a purposeful culture

Sarah Turner, the founder and chief executive officer of an eponymous agency, provides interesting insights into how to...

20 Types Of Content To Help You Attract Prospects And Win Customers – Renae Gregoire

If you know deep inside that you need to be doing more to connect regularly with your audience...

High prospect for real estate investment in Nigeria – Bartholomew Egbochie, CEO, ATCO Homes

Lagos, Oct 4, 2023 - The Nigeria real estate sector provides ample investment opportunities. According Bartholomew Egbochie, the...