A further three-week extension of the Covid-19 lockdown across the UK is expected to push down UK fashion spend by a further GBP1.4bn (US$1.75bn), according to GlobalData.

UK clothing and footwear spend is now forecast at GBP39.7bn (US$49.6bn) for 2020, a decline of 26.1% on 2019. This is a further GBP1.4bn drop on GlobalData’s prior forecasts on 6 April 2020. As the government has extended the UK lockdown for at least three more weeks, we expect that offline clothing and footwear sales in 2020 will further contract, falling 33.6% on the year, as the demand for fashion is increasingly decimated.

With other European countries, such as Austria and Italy, gradually loosening their restrictions and keeping most non-essential stores closed, we expect fashion stores in the UK to remain shuttered for a number of weeks once the lockdown is eventually lifted, and not begin reopening until June. Though Italy has prioritised opening childrenswear stores, the UK suffers from a lack of specialists, especially after the recent demise of Mothercare, and with the grocers making up almost a quarter of UK childrenswear market in 2019, we expect that spend will remain concentrated among these players and the online channel. 

While we predict that fashion stores will start to gradually reopen in June, footfall is expected to remain low as consumers will be cautious about visiting crowded areas, and prioritise catching up with family and friends that they have been unable to see during lockdown. Consumers will also prefer to spend time outside enjoying the summer weather rather than browsing retail stores, and will focus spend on experiences over fashion items. We expect several retail casualties within the fashion sector in the coming weeks, with Debenhams, Oasis and Warehouse already entering administration, and Arcadia said to be considering more store closures. Therefore, more empty spaces are anticipated on the high street, limiting physical fashion spend further.

In contrast to offline clothing and footwear sales, we now expect online sales to fare better, only declining by 7.9% in 2020 (rather than our original forecast of 10.8%). However this will not be enough to offset the loss in spend from physical stores.

After Next closed its website on 26 March, followed by the likes of TK Maxx and M&Co, we expected many more would also choose to halt their online operations. However, few retailers actually emulated this move as they fought to capture some retail spend. Next reopened its website on 14 April, though at limited capacity due to enhanced safety measures, which has put pressure on other players with closed online operations to follow suit. Quiz, Fenwick and River Island have all resumed selling online again, and TK Maxx has made its website available for browsing only, though it should aim to restart warehouse operations as soon as possible so that it can take orders, as it has strong potential to drive sales of activewear during the lockdown.

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In its interim FY2019/20 results, ASOS reported that global sales for the three weeks up to the beginning of April declined by c.20-25% – though part of this period would have been prior to the UK lockdown, and the retailer also ran several 20% off promotions during these weeks, which would have driven spend. However, these results provide hope that online retailers can be successful in encouraging clothing and footwear purchases throughout the Covid-19 crisis, especially among younger shoppers seeking Instagram-friendly loungewear and wishing to participate in some retail therapy.