Designer Apparel and Footwear (Ready-To-Wear) in Germany

2020 IMPACT

The lack of international tourists leads to declining sales in 2020

Prior to the outbreak of COVID-19, designer apparel and footwear (ready-to-wear) is an area that has been performing steadily in Germany, recording a value growth of 3% in 2019. A large proportion of demand for the category comes from domestic consumers, although sales from inbound tourists have increased.

Store closures and consumers ongoing cautious behaviour in public, results in declining foot traffic

Store closures during the two periods of lockdown in March-late April, and then again from December, resulted in a huge loss of revenues from consumers making in-store purchases. Even when stores were open, social distancing measures and ongoing COVID-19 restrictions led to foot traffic remaining limited.

E-commerce grows as consumers feel comfortable buying apparel and footwear online

For most brands, supply-chain impacts have been manageable, ensuring stores have their products available. Local productions in Germany played a major role, and at that level, disruptions were very limited and sporadic.

RECOVERY AND OPPORTUNITIES

Recovery aligns to domestic consumers confidence to return to physical stores

Recovery is not expected to be swift across the early forecast period, especially with heightened levels of COVID-19 seen in Q4 of 2020. As such, sales are expected to rise during a time when consumers will feel confident to shop in public once more.

Mergers and acquisitions are expected, as smaller players struggle to recover

The outcome of the COVID-19 pandemic is expected to lead to smaller brands in Germany becoming bankrupt, unable to have the financial backing to survive the low levels of sales in 2020, and the uncertain future. This is especially the case in designer apparel and footwear (ready-to-wear), a highly fragmented landscape with many smaller businesses.

Both retailers and brands focus on improving their e-commerce offerings

E-commerce will be increasingly important for all players in the industry across the forecast period. With levels of e-commerce set to rise, brands will respond by creating more engaging online platforms, improving navigation and focus on creative ways to showcase ranges through e-commerce.