Jim, an American living in Trelleborg in southern Sweden, has been running a clothing and footwear agency for nearly 20 years with his wife, primarily selling to small retailers and other brands.
He says that the nature of his business means any negative effects will likely not be clear until later on. But there are already signs of change, with some brands already deciding to discontinue selling, orders cancelled, and some collections scrapped altogether due to lockdowns across Europe which hit the manufacturing industry.
“Coronavirus has hit retail, especially apparel and footwear. We generally sell six months in advance so we're not seeing the effects yet, but if our retailers are suffering, we sell less to them. We are seeing a decline in order-taking,” he says. “It's a tactile business. Retail store owners want to see and touch the clothes.”
“I think there will be a huge long-term impact. From what I've read, apparel sales have averaged around a 30 to 35 percent decline and for footwear it's nearly 50 percent. Retail was already having a hard time. There will be a consolidation, smaller businesses are going bankrupt like MQ and Brothers, and when a lot of businesses shift towards internet sales, that's harder for the small guys because it's tough to convert sales to online.”
Jim has benefited from some government support, including reductions in social security and pension fees, which he says was a very simple process.
But there is not a lot of support targeted at small businesses, he says.
“I also sell to Norway and Denmark and it seems Denmark especially has more extensive programmes – maybe also because Sweden never closed down when the rest of Europe did, so where Denmark shut down, their politicians were quick to come up with aid to bridge that gap and have rebounded well. In Sweden we've had the illusion that people are free to shop, but they've chosen not to, at least not in apparel shops.”
A long-term impact on international travel could also harm Jim' business, since he usually spends time at fairs and fashion conventions across Europe, gaining new customers, but is unsure if these will be as popular this winter.
“I always try to 'do it on my own' so I've not really been looking for government help. But support needs to be long-term and set up for the future, because maybe our branch won't recover fast.”
For Jim, the shift in business primarily means moving from sales to smaller retailers to selling to larger retailers or brands, where one large retailer might replace ten indie stores.
“I'm an eternal optimist but I can't say I'm positive things will go back to how they were. Things aren't even how they were ten years ago – everyone is skimping and finding ways to save.”
To anyone who wants to support the retail industry, his advice is to buy local when you can.
“The world doesn't feel so local anymore, and it's hard to know which stores are 'local', but buy from small independent stores where you can. They've had it tough anyway battling against the chains who can buy things at considerably lower prices, and now they're struggling a lot.”