Luxury retail
The fashion and luxury retailers must restrategise, recommends Boston Consulting Group (BCG), as both industries have felt the pinch of the COVID-19 pandemic acutely. As a result, they need to develop drastically different inventory and sales strategies to heal their businesses and emerge with a chance to thrive post-pandemic.
“That means adopting an agile strategy that we call the three-season management, in which current and future inventory is managed in a way that will boost stock monetisation and profitability across at least three retail seasons.”
According to BCG, the fashion and luxury retailers find themselves in their current difficult spot because almost all stores in this category were temporarily shuttered and many brands lack sufficiently robust or compelling online channels to reach and attract large numbers of shoppers to e-commerce. In addition, consumers have become increasingly budget-conscious.
Based on an analysis of numerous COVID-19 recovery scenarios, BCG estimates that fashion retail sales will be down as much as 35% in 2020 compared with last year. While luxury store owners will face sales deficits that could reach as high as 45%. Almost three-quarters of fashion and luxury companies could suffer from cash shortages.
As fashion and luxury retailers must restrategise. BCG explains, “The short-term responses to these challenges have been similar: most fashion and luxury companies we talked to are focused on cutting expenses by negotiating with landlords to postpone rent payments for five months or so, reducing the workforce, restructuring credit terms and applying for government support. In addition, among the few retailers that had well-functioning e-commerce channels, steep online discounting – 50% off on all products and free shipping – is a favoured option.”
“However, these steps are only band-aids to cover the immediate wounds; they will do little to ensure the long-term survival of the company. Which is why three-season management is so essential now.”
For all the latest retail news from the Middle East, follow us on Twitter and LinkedIn, like us on Facebook and subscribe to our YouTube page.
Watsons to open 20 new stores in the GCC
In 2020, global health & beauty retailer AS Watson Group signed its
April 29, 2024 | By Rupkatha BRevolutionising retail: How RetailGPT is shaping the future of shopping malls
Times Square Center: Building community through more than retail
/ 
What does it take to sustain profitable growth in the post-IPO phase?
Mahalle began its operations in 2022 as an “Authentic Turkish Grocery in
“Retail is a people’s business. When building a retail brand or the
From being one of the first retailers in Dubai to ban single-use
For starters, Rabbit is a growing e-commerce grocery platform in Egypt always
In 2024 grocery retail major Choithrams has achieved several milestones underscoring its
Industry pioneers are embracing a comprehensive strategy that integrates consumer insights, digital
The regional grocery retail market is evolving fast keeping pace with constantly
From ethical and local sourcing to adopting cutting-edge technologies to curb food
The regional grocery retail market is becoming more and more diverse, offering
/ 
Softlogic Holdings PLC, one of Sri Lanka’s largest conglomerates, has a diverse
During her SOLOx session at the IMAGES RetailME Awards 2024, Mrunal Khimji,
Saudi Arabia’s retail sector is rapidly transforming under Vision 2030. E-commerce, brick-and-mortar
This panel discussion at MRF 2024 explored the balance between digital-first brands
At the heart of retail lies the consumer, Deloitte pointed out while
The GCC retail industry is projected to grow at a compound annual
Following the successful launch of its flagship store in City Centre Deira,
In what comes as a significant announcement, Middle East based eyewear majors
Abu Dhabi based retail company LIWA Trading Enterprises, a subsidiary of Al
Aligned with the principles of ‘slow fashion’ UAE-based homegrown brand Ryokō Bags
From designing collections to creating campaigns, from analysing user preferences and purchase
Previous Article
