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From Italy to Inditex: Europe "isolated" by the coronavirus

By Jaime Martinez

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Business

Madrid - That the United States, at the hands of President Donald Trump, has decided to cancel all flights between the country and Europe for the next 30 days only serves to illustrate the isolation to which Europe is heading. Attempts to cushion the coronavirus "pandemic" that is beginning to devastate a large part of the continent will require the implementation of unprecedented containment measures. At the same time, multinationals and fashion companies alike are resorting to remote working tools (teleworking) as much as possible in a final attempt not to completely cease operations.

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Italy, currently the second most affected country in the world with more than 12,000 infected people, announced yesterday the closure of all businesses and the shutdown of all "non-essential" economic activity as an extreme measure to contain the disease. Supermarkets and pharmacies are exempted and will be able to continue their activities. "It is not necessary to go to the supermarket," announced Italian Prime Minister Giuseppe Conte in a televised message. "Italy is proving to be a great community, united and responsible," the Italian politician said. "Right now everyone is looking at us, first of all because of the number of infections, but also because we are taking rigorous measures. Tomorrow they will not only look at us but they will admire us and take us as an example of a country that, with responsibility, has managed to overcome this pandemic".

The "self-imposed" quarantines in Italy

With many familiar faces advocating through their social networks that people should stay at home and not contribute to further expansion of the disease, the strict measures in Italy were announced after chains like Benetton already decided to start closing their stores. At the birthplace of major multinationals in the textile industry, especially in the luxury sector, the epidemic that is shaking Italy has led to many well-known names and companies to donate large sums of money to help fight the effects of the coronavirus.

Among them is Italian designer Giorgio Armani who held his collection presentation behind closed doors during the last edition of Milan Fashion Week, and who has donated 1.25 million euros to fight the outbreak. The money will go to Italian hospitals and other organizations focused on fighting the coronavirus. Digital entrepreneur Chiara Ferragni is the driving force behind a campaign that has managed to raise more than 3.6 million euros to be donated to the hospital in Milan. Other companies and fashion firms such as Bvlgari, Dolce&Gabbana, Versace, LVMH, and Kering have announced donations of 1.08 million dollars to the Red Cross Foundation of Hubei, the epicenter of the disease, and another 2 million euros in its fight against the coronavirus.

Closing of showrooms, communication and business agencies

In Spain, where there has been a considerable increase in official cases of the infection since 8 March, officials are struggling with coordinating the containment of the outbreak. At the same time Spanish fashion multinationals, such as Inditex, Mango, and Tendam, have been updating their production strategies and seeking solutions to deal with the paralysis of their manufacturing facilities in China.

Those first measures were already taken when the disease was still far away and the idea of a possible shortage of supplies was more worrying than a total shutdown. This is an extreme situation for which the many companies in the sector are already beginning to organise themselves, and particularly complex for small and medium-sized companies that do not have remote working systems already in place. Or that, due to their own type of company, make it impossible for them to work from home.

Thus, at the same time that the Community of Madrid, one of the main national focal points, decreed the closure of nurseries, schools and universities, it announced the closure of the main museums in the capital, such as the Prado, Reina Sofía and Thyssen museums, starting today, Thursday. All this while considering the possibility of "closing" the region completely, and specialized companies in the sector, such as showrooms, communication agencies and companies, reduce their economic activity to a minimum and prioritize remote work. With companies like department store El Corte Inglés and Inditex putting into operation their respective contingency plans against the coronavirus.

From the "crisis committee" of El Corte Inglés to Inditex's telework

Among the latest news, sources close to the group of department stores, consulted by Spanish online news outlet El Confidencial, said yesterday March 11 that the CEO of the company, Victor del Pozo, had already requested the creation of a crisis committee from which to address the situation of "general panic" and a prolonged drop in turnover. This situation would have already begun to be experienced by the company at its centre in Castellana - the group's main hub - where it would be registering a drop in turnover of up to 18.9 percent.

On the other hand, Inditex, one of the largest fashion companies in the world is promoting telework for all employees at its headquarters in Arteixo. The company is also limiting business trips and has imposed more time between canteen shifts. Other measures include cancelling the bus service for employees and closing the gym. These measures will be implemented for 15 days after which the period can be extended depending on the situation. The company maintains that these measures will not interfere with the normal functioning of the group nor with the presentation of its fiscal results, expected next week.

From Germany to Denmark: the measures in the other EU countries

Apart from Italy and Spain, other countries in the European Union have already put in place multiple measures to try to control the spread of the covid-19 virus within their borders. In Germany, for example Chancellor Angela Merkel announced that between 60 and 70 percent of the country's population could end up infected with the new coronavirus, ruling out the possibility of Germany becoming an isolated country like Italy, and betting on a tactic that would avoid overloading the public health services.

Meanwhile, other countries, such as Austria, Denmark, the Czech Republic and Poland, have also decreed the closure of schools and universities at various levels. With Austria ruling out primary schools and the Czech Republic ruling out day-care centres, as a measure to avoid the burden of childcare falling on grandparents, the demographic group most at risk. At the other side of the continent, in Denmark, a country with no deaths and 516 people infected, but with a population of around 5.6 million, Prime Minister Mette Frederiksen also announced yesterday the closure of all classrooms, bars and clubs in the country, and is sending home, starting Friday, all "non-essential" officials.

Read the latest updates on how the coronavirus effects the international fashion industry >> here

This article was previously published on FashionUnited Spain

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