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

2020 IMPACT

Retail shutdown as a result of COVID-19 hits designer apparel and footwear hard

The most immediate impact on sales of designer apparel and footwear (ready-to-wear) in 2020 has been the shutdown of all non-essential retail between March and May. Retailers of these products are typically based in urban shopping centres in Romania, and all of these outlets were shuttered.

Consumer uncertainty hits sales hard, with aspirational consumers holding off purchases

Romania is set to see a severe economic contraction as a result of the pandemic in 2020, although its solid macroeconomic performance prior to 2020 leaves it better positioned than most to rebuild in 2021. Nonetheless, sales of designer apparel and footwear (ready-to-wear) are set to see the rise in unemployment rate and a drop in disposable income hit values.

Reduced need for use in 2020 should see sales rebound in 2021

A less direct effect of the pandemic is the shutdown of much of the country’s social life, either with the shuttering of foodservice and entertainment venues, or the ban on social gatherings such as weddings or baptisms that remains in place at the end of 2020. This has reduced the number of occasions when consumers might look to buy a new outfit; in lockdown, there has simply been less need to shop for designer apparel and footwear (ready-to-wear).

RECOVERY AND OPPORTUNITIES

Recession-proof consumers driving top end of market

It is worth noting that designer childrenswear is forecast to see the strongest growth in current value terms over the forecast period, albeit from a lower base than men's designer apparel, or women's designer apparel, the largest part of the category. This suggests that the top end of the market is set to see the strongest growth in demand going forward.

Underdeveloped e-commerce an opportunity to strengthen millennial ties

The shutdown of physical stores between March and May, their staggered reopening and the inconvenience of wearing a mask and social distancing while shopping took a toll on sales of designer apparel and footwear (ready-to-wear) in Romania in 2020. As a result, many consumers started to shop online, and e-commerce has seen its share of distribution in value terms more than double over the year.

Brand control can help fight back against counterfeiting

Designer apparel and footwear is especially susceptible to counterfeiting. Romania has historically been plagued by widely available counterfeits, which are not only sold at open-air markets and kiosks, but also in more formal retail outlets including shopping centres.