BTE, BDSE and BLE advocate differentiated exit strategies
The current shutdown in stationary textile, shoe and leather goods retailers is unlikely to be relaxed until the end of April at the earliest, but possibly not until May. This means that the entire fashion industry lacks a sales period of probably six to eight weeks, at least as far as stationary business is concerned.
Various suggestions have been circulating in the textile and fashion industry for around two weeks to postpone the spring/summer season by around six weeks. For example, deliveries of autumn goods would have to be made later, so that there is more time for summer goods to be sold in retail. However, the trade associations for textiles (BTE), shoes (BDSE) and leather goods (BLE) are convinced that the temporary reintroduction of a legally required (late) sale, which is often called for in this context, is not politically feasible. Appeals to the industry to hold back on price promotions are also likely to overstretch solidarity among retail companies and brand suppliers who sell directly, especially since many companies want or need to obtain liquidity after the shutdown is over.
However, every textile, shoe and leather goods retailer should carefully weigh up the priorities between liquidity and profitability, the associations advise. When considering their exit strategy, many market participants are currently coming to the conclusion that a differentiated approach is expedient. Detailed decisions would also have to be made dependent on when the shops are allowed to reopen. BTE, BDSE and BLE therefore advocate the following:
● Stretch and extend the spring/summer (S/S) sales season. This also includes pushing back the goods receipt dates for autumn/winter (H/W) in coordination with the suppliers.
● This means that the previously planned marketing measures for H/W must also be adjusted in time.
● Use the red pencil for S/S in a very targeted and differentiated manner. Anyone who sells vouchers for shopping after reopening has ensured later customer frequency and probably less pressure to have to offer larger discounts.
● Especially in the case of contracts with return options, check carefully which goods are currently still for sale and which are not. Only return non-current goods in a timely manner, but quickly put up-to-date goods on sale. In any case, talk to the suppliers about “washing goods”.
● If necessary, store less fashionable S/S items and put them back on sale at a later date (2021). This must certainly be done more carefully in the area of women's fashion than in men's clothing.
The key to a sensible seasonal procedure also lies with the suppliers and their support of their trading partners. However, the business models and delivery rhythms of the brand providers are very different and therefore require a differentiated view. According to a current analysis and theses paper by the BTE partner hachmeister+partner, the biggest problem in this context is that goods from the early delivery dates are no longer seasonally current and therefore hardly sellable. These goods should be exchanged for current goods or marketed adequately.
With the reopening, the textile, shoe and leather goods trade will need the latest goods that are competitive with the offers from online retailers and vertical chain stores. Each retailer needs individual guidelines for each supplier/business model (e.g. vertical monthly suppliers, ready-to-wear suppliers, classic pre-order suppliers, suppliers with competent NOS/seasonal NOS offers), which, however, are developed and implemented by the fashion houses, shoe shops and leather goods retailers themselves would have to. During these supplier discussions, the key question must be clarified as to how the damage caused by the authorities can be kept within limits through partnership.
