Dress is less

With comfort becoming the shopping essential during lockdown, it has had a significant impact on fashion retailers.

While athleisure and streetwear has boomed because of increased homeworking, formalwear has understandably suffered. We look at who has benefitted the most and why, as well as who has lost out.

Winners
Athleisure and streetwear have been in such high demand in recent months that some retailers have been struggling to keep up with demand. ASOS and JD Sports, for example, have both reported stock shortages.

During the first few weeks of lockdown, running, cycling, and walking clothing were in particular demand, as consumers enjoyed the warm weather and headed outdoors.  Edited found that demand for sportswear in England soared in 2020 and sales rose by 17% YoY to August. As the colder weather drew in, demand for warmer clothing such as hoodies and fleeces grew.

The online sportswear brand Gymshark, which recently achieved unicorn status, increased revenues in the year to July 2020 to £258m. Likewise, JD Sports reported a sharp rise in online sales over the past six months. The group Chief executive chairman, Peter Cowgill, identified that the company's athleisure wear was "right in the zone" for people stuck at home.

Consumers are increasingly seeking simple, comfortable clothing options. And more agile online brands, such as ASOS, have been able to pivot product range in H2 to reflect shoppers' new 2020 lifestyles. ASOS reported rising sales across their casualwear and beauty range, as well as a 50% increase in sportwear sales.

Losers
With more people working remotely and fewer social events, formalwear sales have fallen dramatically in the past six months. Next, Marks & Spencer and Debenhams were reported to be acquiring warehouse space to hibernate their formalwear stock.

In their recent annual report, Next stated that men's and women's formal and occasionwear remained weak. Similarly, TM Lewin, which specialised in men's shirts, has suffered from the rise of home working, and decline in formal social events. In June, they went into administration and closed all 65 UK stores.

M&S, with a large legacy store portfolio, has been severely affected by the decline in footfall, especially in big city locations. As a result, they are forecast to post a half year loss for the first time in their history when they announce their results this week. On a more positive note, Covid has forced the business to accelerate its turnaround plans.

It is clear that retailers who are able to adapt their ranges more quickly, such as the fast fashion brands, are more able to respond to short term changes in demand. It's also clear that those dependent on longer lead times and unable to adapt as quickly appear increasingly at odds with today's volatile markets.

Mixed results
Overall, there has been a K-shaped recovery in the retail sector. More nimble online brands, especially those with a strong activewear and casual clothing ranges, have enjoyed a boom in demand. When restrictions do eventually ease (Spring 2021?), people will want to go out and retailers with the right occasionwear and workwear will be the ones who benefit. Agility and creativity have never been more important in retailing.

Jamie Parker