Huge global decline in profits
According to the McKinsey Global Fashion Index, fashion companies’ profits declined by approximately 90 percent in 2020, after a four percent rise in 2019. Even in a scenario where the virus is contained relatively quickly in 2021, it is not expected that the industry will return to 2019 levels of activity until the second half of 2022. Recessions in many countries may mean people spend less on clothes in the short to medium term.
Overall decline in clothing sales in the UK
The pandemic changed the pattern of clothing sales in the UK, with less being bought in stores and more online. While this pattern was evident in many retail sectors this year, clothing was the only sector where the increase in online sales did not compensate for the reduction in in-store sales. This resulted in an overall decline of 14 percent in the value of clothing sales for October 2020 compared to pre-pandemic February 2020.
Covid causing job losses
Predictions by the economic consultancy Oxford Economics estimate there will be 240,000 direct job losses in the UK fashion industry as a result of the Covid-19 pandemic. This rises to 350,000 if job losses in the supply chain and related to consumer spending are also included.
As customers do more of their shopping online, jobs in warehouses are increasing as jobs in stores decrease. This could have an impact on who is employed in the retail sector; the Work Foundation think tank concluded that women would be particularly at risk from job losses in the retail sector if the current trend of jobs shifting from stores to warehouses continues.
Conditions for garment workers
The pandemic amplified public awareness of social injustice in the supply chain. As shops were ordered to close, many fashion retailers cancelled orders and deferred payments. This impacted garment workers around the world. Analysis by workers’ rights groups estimated that garment factories and suppliers lost at least $16.2 billion in revenue between April and June in 2020 because brands cancelled orders. Many workers lost their jobs or had their hours significantly cut as a result.
Before the pandemic, several media investigations in the UK revealed garment factory workers being paid less than the minimum wage and working in unsafe conditions. These investigations centred on the factories in the city of Leicester. The allegations received renewed attention when garment factories were blamed for continuing high rates of coronavirus in the city during the summer of 2020. In July, it was reported that the Home Secretary had asked the National Crime Agency to investigate modern slavery allegations in the city’s clothing factories.
There is pressure for fashion brands to increase their corporate responsibility. Initiatives such as #PayUp and the Clean Clothes Campaign encourage fashion brands to improve treatment of workers in their supply chains. In a survey conducted in August 2020, 66 percent of consumers said they would stop or significantly reduce shopping at a brand if they found it was not treating its employees or suppliers’ employees fairly. However, evidence is mixed as to how these factors impact consumer behaviour. Brands that have been exposed as having workers in “unacceptable” conditions in their supply chains have still seen sales growth.
The production, consumption and disposal of clothes has a large environmental impact. The fashion industry is responsible for approximately ten percent of global carbon emissions and 20 percent of waste water.
Consumption of new clothing is estimated to be higher in the UK than any other European country. UK citizens buy an average of 26.7kg of clothing a year per capita. This compares to 16.7kg in Germany, 16kg in Denmark, 14.5kg in Italy, 14kg in the Netherlands and 12.6kg in Sweden.
Only a small proportion of textiles are recycled in the UK. Every year approximately one million tonnes of textiles are discarded in the UK. While some of these are resold in charity shops, around 300,000 tonnes of clothing still ends up in household bins. Approximately 20 percent of this goes to landfill and 80 percent is incinerated.
There are many challenges to recycling clothes. Garments typically include many different materials, such as cotton, elastane and metal for zips and fasteners, which are hard to separate. In addition, most processes to turn the material from clothes back into cloth are costly and result in lower quality fabric. However, experimental technologies for separating natural from synthetic fibres, such as by feeding them to fungi, are being explored.
The easiest way to reduce the environmental impact of clothes is to produce fewer of them. Some research indicates that younger shoppers are not only buying fewer clothes, but are more often renting and reselling clothes as a result of the pandemic. Within the industry, many brands are reducing the amount and variety of clothes they sell, streamlining collections with the aim of reducing waste. However, whether the pandemic will have a lasting impact on shoppers and the fashion industry remains to be seen.
Cover image by Rojan Maguyon from Pexels.