One clothes shop in four in Antwerp is in danger of going bankrupt, according to figures from the business consultancy Graydon, reports Gazet Van Antwerpen.
Needless to say, the Covid-19 crisis has made the situation worse. Before the pandemic, Graydon said, about 9% of shoe shops were flirting with failure. That figure is now 45%.
For clothes shops, in a city renowned for its fashion since the 1980s, the figure has gone up from 11% pre-pandemic to 42% now.
The shops in question have, like the rest of the retail trade, received subsidies from the government, for example when non-essential shops were forced to close in the first lockdown and the one about to come to an end.
But that has not helped much. At the moment such shops can receive customers by appointment, but only one at a time. But it’s common knowledge that customers – let’s say female customers – for clothes and shoes like to shop in pairs at least. If that’s not possible, people will postpone their purchases until it is.
That was the result, too, during the spring sales, when restrictions were in place, and when retail businesses suffered disappointing results.
“But government support only helped prevent bigger losses,” said Eric Van den Broele, Graydon’s research and development director. “Without the government support, 73% of shoe stores and 72% of clothing stores would now be in financial trouble.”
Graydon reckons one in four clothing and shoe retailers are now close to the brink, judging only by those who were financially healthy at the start of the pandemic.
“Their financial reserves are exhausted,” said Van den Broele. “So extra money is immediately needed to save those stores. But that cannot be taken for granted. Many entrepreneurs have already invested a lot of private money in their company during this crisis and are now eating through their carefully saved pension fund.”
For ModeUnie, which represents the retail sector, the news from Graydon comes as no surprise.
“These are impressive figures, but unfortunately that is reality,” said director Isolde Delanghe. “We fear that at least 20% of fashion stores will actually go bankrupt, and it could be even more. And many stores that can still go ahead are in danger of having to let go of staff,” she said.
“Today, 47% of the staff in the fashion sector are still on temporary unemployment. It will be difficult for many entrepreneurs to recruit after the crisis because the money has simply run out.”