COVID-19 impact on clothing and footwear market in Poland
The government-ordered closure of stores in shopping malls punched a big hole in the revenues of the largest clothing and footwear retailers in Poland. The surge in e-commerce could not compensate for that. And sales will not recover to their pre-epidemic levels before the end of 2020, as the economic crisis begins to bite.
More data about the current situation of the Polish fashion market you will find in the PMR report:
Clothing and footwear market will be hit harder by COVID-19
The clothing and footwear market will be hit harder by the crisis triggered by the COVID-19 epidemic than any other segment of Polish retail. According to our forecasts, it will shrink in value by at least 7.1% in 2020, making this one of the worst years ever for the sector. By way of comparison, in 2015-2019 the market grew by an average of 4.7% a year.
Predictably, the COVID-19 lockdown imposed in mid-March had a huge negative impact on the revenues of leading clothing chains, depressing their first quarter performance and reducing their April sales to a fraction of year-ago levels, as e-commerce became their main sales channel.
Thus, for example, first-quarter Polish sales at CCC, the leader of the footwear market in Poland, slumped by 33% year-on-year, to PLN 274.5m (€60m). At the same time, its e-commerce revenues increased by 39% in March, and the share of online in total revenue shot up from 28% to 43%.
LPP, the largest Polish clothing retailer, saw a 35% year-on-year slump in total sales in the first quarter of its fiscal year (February-April 2020), to PLN 1.19bn (€260m), according to preliminary estimates. At the same time, its e-commerce sales increased by 129%, to PLN 398m (€87m). LPP also said that in April – when almost all of its brick-and-mortal stores were closed – e-commerce sales surged by 270% y-o-y.
Wojas, a major domestic footwear retailer, said that consolidated sales revenues in April were just PLN 8.78m (€1.92m), down by 64% y-o-y. For January-April 2020, consolidated sales revenues were down 18%.
And VRG, the fashion and jewellery group that owns Vistula, Wolczanka, Deni Cler and Bytom, said that due to the lockdown, and despite a good start to the year, first-quarter sales revenues at its clothing business declined by 11% y-o-y, to just under PLN 117.3 m (€25.6m).
Consumers did not rush back into stores after lockdown’s end
Stores in shopping malls were allowed to reopen on 4 May. But retailers are reporting that customer traffic and sales are significantly lower compared to before the coronavirus outbreak, or to last year.
Thus, for example, Intersport Polska said that in the first week after reopening, i.e. 4-9 May, traffic at comparable stores was down 45% year-on-year and sales were down 46%. On the other hand, the strong growth in e-commerce continued, with sales up 107%.
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Senior Retail Analyst