In recent years there has been a rise in many global issues, such as COVID-19, the war in Ukraine, and inflation. All of these issues are seen to impact the fashion industry, making suppliers and brands face challenges. Within this blog, you will be able to learn about these challenges and how these global problems have disrupted the fashion industry.
COVID-19
During the pandemic, many retailers had to close their stores leading to their staff losing their jobs or being furloughed. While their doors were closed, many local/independent retailers were losing needed profits to stay afloat. By relying on in-store purchases they lost profit to other stores that had a strong social media presence and an online store. After the lockdowns lifted, many of the retailers had to close permanently, leaving gaps in our local high streets.
As well as this, due to the decrease in discretionary income, many people started to sell and buy their clothes on places like Vinted and Depop, in turn, this led to a reduction in sales made on well-known online brands.
The Ukraine War
Although you might not think it, the Ukraine war did affect the fashion industry massively. The Russian fashion industry has had dramatic changes due to major domestic brands like H&M, Zara, Nike, and M&S suspending their operations in the country. According to research, in March 2022, over 400 global companies suspended their operations in Russia, because of the war.
Another negative impact the Ukraine war has had was the increase in oil prices. The research found Russia to be the third largest producer of crude oil globally, with the UK, US, and some EU countries being their customers, the price rise meant a limit in purchases. Therefore, this means it won’t be easy to import and export textile materials and products.
Inflation
From recent studies by KPMG, in 2022, global inflation has variated between “4.5% to 7.7%”. However, due to other global issues, like the previously mentioned Ukraine war, it has increased the prices further. From this people are less likely to have the additional income to spend on clothes, as they are seen to be luxury items. From this brands and companies that focus on maintaining their customer base but take some loss in their profit margin are seen to be the likely long-term gainers of the inflation war.
Other additional factors like the previously mentioned crude oil increase in price will affect some retailers getting products from overseas manufacturers/warehouses. As well as many customers not getting their orders on time due to the postal strikes and delivery services not being able to afford petrol.
Therefore, global issues may have more of an impact on the fashion industry than you may have thought before reading this blog.
If you’d like to learn more about the fashion industry, visit our blog page where you can find so many interesting and different blogs to read.
