2020 is cancelled for a lot of us, especially retail brands. With people staying indoors to reduce the infection of Covid-19, retail brands see a huge drop in their sales – some up to 50%!
As the pandemic continue to affect businesses, we’ve compiled a list of popular retail brands that are severely affected – some even filing for bankruptcy protection.
The popular footwear brand from Canada has filed for protection from creditors in the US and Canada to save its business. They are conducting a restructure so they can continue serving customers.
Their CEO said, “It is no secret that the retail industry has experienced rapid and significant change over the last several years. We were making strong progress with the transformation of our business to tackle these challenges; however, the impact of the COVID-19 pandemic has put too much pressure on our business and our cash flows. After conducting an exhaustive review of strategic alternatives, we were determined that filing is in ALDO’s best interest to preserve the Company for the long term and survive through this challenging period.”
However, Aldo Malaysia will remain open for business. No impact is seen from the current Aldo US & Canada circumstances on Aldo Malaysia stores, said Montreal Trading Sdn Bhd, which operates the Malaysian franchise.
During the second quarter, H&M reported a loss of RM1.4 billion as sales fell due to Covid-19. As a restructuring plan for the business, H&M announced that it will be shutting down 170 of its stores worldwide. The brand will be adapting and focusing on their online sales instead.
It seems Malaysian stores are so far unaffected and will still be operating.
In April, ESPRIT announced that it will be closing down all its Asian stores (except in China) by 30 June. The countries affected include Malaysia, Singapore, Hong Kong, Macau, and Taiwan. The brand saw a downward spiral of its sales, which got worse after the Covid-19 pandemic hit.
During the end of their first quarter, Esprit’s sales in Asia fell a whopping 52.2% and 25% globally. The struggling brand lately had to retrench 1,200 of its staff globally to stay afloat.
4. Victoria’s Secret
As the pandemic continues to affect sales, Victoria’s Secret announced that they will be closing down 250 of their stores in the US and Canada. The brand mentioned that it may see more stores closing over the next few months in an effort to restructure the company.
In the UK, the brand closed 25 of its stores and laid off 800 employees.
In 2019, Gap announced its plan to close 230 of its stores worldwide in the next 2 years. However, due to the Covid-19 pandemic, the brand seems to have hastened its store closures as it recorded a 43% drop in the first quarter.
Gap wrote in a statement, “We are committed to quickly, thoughtfully, and decisively address stores that are underperforming or don’t fit our vision for the future of Gap.”
The brand announced that it will be closing down 100 of its stores worldwide as sale plummeted – mainly due to extended closures of their stores due to the Covid-19 pandemic. To minimise losses, Guess retrenched most of its store staff, 150 of its corporate employees, and has cut the salaries of management significantly.
The Japanese lifestyle brand has filed for Chapter 11 bankruptcy protection in the US and has closed 18 of its stores in the US in March. The brand which is known for its minimalist home decor and clothing concept said it will be focusing on online sales instead.
“MUJI has felt the devastating effects of the Covid-19 pandemic on in-store retail, and as a result will take this opportunity to refocus our efforts in the United States on key regional markets and e-commerce,” MUJI’s CEO said.
8. La Senza
The popular intimate wear brand has been on the verge of bankruptcy in the recent months, having over RM38.4 million debt. La Senza has been closing its stores one by one across Canada and news reports mentioned that the brand’s future is at risk.
With the impact of Covid-19 felt throughout the retail sector, brands are trying their best to stay afloat and cut down on the losses. Businesses are making hard decisions as the pandemic has forced a lot of them to restructure. If we missed out any other brands on this list, let us know in the comments!
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