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

2020 IMPACT

Loss of inbound foreign visitors slashes profits for designer apparel and footwear

The travel restrictions placed on international visitors by the Singapore Government in order to contain the outbreak of COVID-19 severely impacted demand for designer apparel and footwear (ready-to-wear) in 2020 with the category recording double-digit retail volume and current value declines. This particularly impacted fashion houses which rely heavily on Chinese spending, given that China accounted for close to 35% of luxury purchases globally in 2019.

Physical store closures shift domestic consumption towards e-commerce

With fashion houses turning their attention towards local consumption, brands have been ramping up their digitalisation strategies in an attempt to maintain domestic spending, as well as to move stock which has built up during the physical closure of boutiques. An example of this strategy was noted by Bvlgari (Louis Vuitton Singapore Pte Ltd), which successfully launched a new payment method, CosmoPay, on its e-commerce site.

Brands launch “home leisure” apparel and footwear collections as staying indoors becomes the new normal

The onset of the home seclusion trend and staying indoors as a result of social distancing and lockdown restrictions have reduced consumers’ need to go out, and subsequently the purchase of occasion-based apparel and footwear offered by the likes of leading brands such as Chanel, Hermès, Gucci and Moncler. In its place, loungewear has become the default outfit for many consumers during the pandemic, offering a comfortable yet stylish alternative.

RECOVERY AND OPPORTUNITIES

Players to rethink the balance between physical and digital retail

The COVID-19 pandemic has effectively acted as a catalyst to accelerate the traditionally slow adoption of digitalisation amongst some luxury players. With various engagement strategies emerging during the pandemic, it is evident that brands are further adopting digitalisation as a way to reach consumers, a trend already noted by leaders such as Hermès towards the end of the review period.

Luxury fashion houses turn towards “slow fashion” and sustainability practices

With a notable reduction in discretionary spending, luxury fashion houses inevitably face issues of excess inventory. This has encouraged luxury fashion houses to fast-track the already ongoing conversations of responsible and sustainable luxury practices.

Potential signs of “revenge buying” to emerge post pandemic

Post-pandemic, it is likely that the recovery of consumer confidence and economic outlook will fuel discretionary spending for luxury items. Affluent consumers are likely to show signs of “revenge buying” after being forced to reduce their spending during the pandemic, and hence be more willing to splurge on big-ticket items such as designer apparel and footwear.