Apparel and Footwear Specialist Retailers in Argentina

2020 IMPACT

Widespread store closures force apparel and footwear specialists to limit outlets and be creative

During the pandemic, many apparel and footwear specialist stores had to remain closed for many months without an opening date in sight. Indeed, many had to close their doors permanently, and those chains with several outlets were forced to retain only within those with the highest turnover.

Growing focus on e-commerce channel to attract consumers

In a context where sales in apparel and footwear via traditional channels are contracting, internet sales continue growing well above inflation. E-commerce grew considerably during the pandemic as stores remained closed, although this did not fully mitigate the sales lost from store closures.

Sales in apparel and footwear remain highly fragmented in 2020

Although apparel and footwear has important brands with a large number of outlets and presence in all the main malls within Argentina, it is a fragmented category, with most maintaining just one or two outlets. Although lead players Zara and Grimoldi retained the highest retail value share in 2020, this share was still marginal and declined a little from the previous year.

RECOVERY AND OPPORTUNITIES

E-commerce will continue to appeal to risk-averse and price-conscious consumers in the coming years

Apparel and footwear categories will continue to have a strong online presence in Argentina over the forecast period. Through e-commerce, consumers can find interesting discounts and lower prices than in offline stores, and more consumers will turn to this channel in search of better deals in the coming years as household budgets remain constrained by the ongoing recession in Argentina, which has been compounded by the COVID-19 pandemic.

Despite a gloomy outlook, opportunities for growth remain through second-hand sales.

Post-COVID-19, it is expected that many outlets will close as their brands will be unable to maintain operational costs after such large losses in 2020. Even as stores begin to open, as long as there are restrictions on trying on clothes, apparel and footwear will struggle and volume sales will take time to recover.

Extensive promotional activity unlikely to reverse declining sales

Argentinian consumers are already used to taking advantage of extensive promotions in apparel and footwear. With consumption declining strongly recently, promotions will increase further, with almost daily offers throughout the large malls and commercial streets of Argentina.