Fashion has been the most hard hit category by Covid-19 pandemic. Compulsory store closures, work from home schedules followed by low footfall at opened stores, negatively impacted sales at almost every brick and mortar fashion retailer. According to Reuters, the Office for National Statistics report showed that clothing sales declined 19 percent in November, their biggest drop since April’s lockdown and almost a third lower than a year earlier.
However, interestingly, this was not the case with online fashion retailers. In fact, they witnessed a sudden surge in demand for casual as well as fitness clothing during the pandemic, with people across the world opting for work from home routine. UK online fashion sales increased 363 percent throughout the month of November, as England was put through Lockdown 2. Orders during Black Friday week, also termed Cyber Week – from November 25 to December 2, 2020 rose 159 percent week-on-week, according to new data from True Fit, a personalisation platform for apparel and footwear.
A look back at the business articles during the year 2020 shows that while physical retailers like Fast Retailing, Under Armour, Adidas, Macy’s, Skechers, Nordstrom withdrew their guidance for the year 2020, online fashion retailers like Zalando, Boohoo, Asos, among others showed upbeat outlook for the year ahead. FashionUnited takes a look at these hits and misses of 2020.
Online fashion players make the most of surge in demandShowroomprivé raises Ebitda outlook for 2020
European online retailer Showroomprivé, following an excellent year-end performance in line with the trend observed over the past two quarters, has raised its 2020 Ebitda target to be over 30 million euros from close to 20 million euros as previously announced.The Hut Group ups guidance following strong autumn sales
Following the strong results, the company has now doubled its Q4 guidance to an expected 40-45 percent increase year-over-year. Full-year 2020 revenue is now expected to be between 1.57 billion pounds to 1.6 billion pounds.Zalando posts strong Q3 growth, raises forecast
As a result of its strong financial performance, Zalando raised its outlook for the 2020 financial year on October 8, 2020. The company now expects GMV to grow 25-27 percent, revenues to grow 20-22 percent and an adjusted EBIT of 375-425 million euros. In its outlook published on July 15, 2020, Zalando previously assumed GMV growth of 20-25 percent, revenue growth of 15-20 percent and adjusted EBIT of 250-300 million euros for the full year.Global Fashion Group raises full year outlook after strong Q3
Global Fashion Group S.A. (GFG) has updated its outlook for the current financial year as a result of strong trading in Q3. The company said in a statement that it now expects to be profitable with respect to adjusted EBITDA and achieve constant currency net merchandise value (NMV) growth of around 23 percent, delivering 1.9 billion euros NMV and 1.3 billion euros of revenue.Boohoo raises full year outlook after strong H1 revenue and profit growth
The company added that group revenue growth for the year to February 28, 2021 is expected to be 28 percent to 32 percent, up from approximately 25 percent as previously guided, with adjusted EBITDA margin for the year at around 10 percent, increased from the 9.5 percent to 10 percent as previously guided. The company’s medium term guidance for 25 percent sales growth per annum and a 10 percent adjusted EBITDA margin remains unchanged.Asos raises full year revenue and profit outlook on strong demand
Asos plc expects sales and profit growth for the full year to be ahead of market expectations. The company anticipates revenue rise between 17 percent and 19 percent with PBT in the region of 130 million pounds-150 million pounds. The company said in a statement that improvement in expectations is supported by stronger than anticipated underlying demand and the continuation of the beneficial returns profile.
Physical retailers had to withdraw outlook after getting hit by Covid-19Frasers Group scraps guidance following fresh UK restrictions
Frasers Group has withdrawn its guidance after new Covid-19 restrictions announced for London and the South East over the weekend meant the closure of “virtually all” of its stores in those areas. The group said Monday it has withdrawn its guidance of a 20-30 percent increase in underlying EBITDA during FY21.Ross Stores remains cautious on outlook
Commenting on the company’s performance, Barbara Rentler, the company’s Chief Executive Officer, said in a statement: “As we enter the fourth quarter, our month-to-date comparable store sales in November are down mid-single-digits. In addition, there remains a high level of uncertainty related to the worsening health crisis and we are concerned with how the upsurge of this pandemic might impact consumer demand during what we expect to be a highly competitive holiday shopping season.”Adidas posts fall in Q3 revenue and profit, reveals cautious outlook
In Q4, the company said, uncertainties around the further development of the coronavirus pandemic as well as the global macroeconomic environment remain high. Overall, the company’s top line is predicted to develop similarly in Q4 as it did in Q3, implying a low to mid-single-digit currency-neutral revenue decline.Shoe Zone expects to report loss for FY20
In a trading update for the 52-week period, Shoe Zone Plc said trading conditions in the second half of the financial year were challenging. The company said in a statement that store trading since reopening in June has been broadly 20 percent down year on year with digital trading broadly 100 percent up year on year. Shoe Zone generated revenues for the period of approximately 122.6 million pounds compared to 161.9 million pounds in 2019. As a result of the closure of its retail estate from March 23, 2020 to June 15, 2020 owing to the Covid-19 pandemic, Shoe Zone expects to report a loss before tax in the range of 10 million pounds to 12 million pounds.
CEO Bjorn Gulden described the second quarter as “the most difficult” he has ever faced. “The quarter started with a 55 percent decline in sales in April, May improved, but was still heavily down with -38 percent. The real improvement came in June which was down ‘only’ 6 percent. Flexibility with our wholesale partners, promotional activities in our own retail stores and a larger focus on e-commerce have been the short-term strategy.”
Gulden also said Puma would not be offering a full-year outlook due to the continued uncertainty surrounding Covid-19.Fast Retailing lowers full year outlook, sees around 50 percent profit decline
Lowering its outlook, Fast Retailing group predicts full-year consolidated revenue for the year ending August 31, 2020 will total 1.9900 trillion yen, down 13.1 percent and operating profit will total 130 billion yen, down 49.5 percent, while operating profit attributable to owners of the parent is expected to be 85 billion yen, down 47.7 percent.Macy's suspends Q2 dividend, withdraws outlook
Macy’s, Inc. is withdrawing its 2020 sales and earnings guidance issued on February 5, 2020 and has temporarily closed all stores as of March 18, 2020, through March 31, 2020. The company expected net sales for fiscal 2020 to range between 23.6 billion to 23.9 billion dollars, comparable sales on owned plus licensed basis to range between negative 2.5 percent to negative 1.5 percent and comparable sales on owned basis to be approximately 40 basis points better than owned plus licensed and adjusted diluted earnings per share in the range of 2.45 dollars to 2.65 dollars.