The bill that the coronavirus pandemic will present to the Fashion and Luxury sector in the coming months risks being very salty. According to calculations by the Boston Consulting Group reported by Economy Courier, the figure could be around 100 billion euros against total revenues that in 2019 reached 350 billion.
The report created by BCG together with Bernstein is based on a series of interviews carried out with the sector's managing directors and CFOs. Well, according to what was declared by the insiders, sales will drop by 30%. A huge and ever-growing percentage. In fact, just a few weeks ago, estimates spoke of losses of 30-40 billion, with sales down by 10%.
In the meantime, the pandemic has continued its expansion, reaching all the main European countries, but above all the United States, which today "boasts" the highest number of infected people globally. A spread that has further worsened expectations, including those on a possible recovery. “Although there is still an important part of CEOs and CFOs who believe that what they lost will be recovered by 2021 (but it has decreased from 61 to 43%), a good part of those interviewed now move the return to pre-crisis levels by 2022”, writes the Economy Courier reporting the data contained in the report of the Boston Consulting Group.
Very heavy even the possible impact on Ebitda, with the gross operating margin of fashion and luxury companies that could contract between 30 billion euros (CFO and CEO expectation) and 58 billion euros (BCG estimate).
In the event that the predictions are confirmed, the repercussions on companies' liquidity could be substantial. In figures we are talking about losses of up to 70-72 billion euros. Finally, according to Boston Consulting, it is probable that the unsold will reach peaks never seen before: we are talking about 105 million unsold pieces.
In this gloomy context, however, there is a glimpse of light represented by the'e-commerce that could help international fashion houses both to contain the estimated losses and to push the recovery accelerator once the pandemic has stopped and the restrictions have been lifted.
