The Covid 19 pandemic also shaped the fashion industry in 2021: developments that had already emerged in the previous year intensified – with often massive consequences. But the pandemic was by no means the only issue in the clothing industry.
Today we look back on some key events from January to June. The second half of the year then follows on Monday.
January: The lockdown divides the industry
The year begins in lockdown: shortly before Christmas, in view of the second wave of the Covid-19 pandemic, all stores in Germany whose product ranges are not classified as “everyday goods” had to close again – so fashion retailers were also affected. The restrictions were originally supposed to end in mid-January, but it took until spring before the affected stores were allowed to reopen.
The gap between brick-and-mortar retailers and online sellers widened. While the German e-commerce industry was able to celebrate a record Christmas business with sales growth of almost a quarter and for the first time targeting revenues of more than 100 billion euros for the new year, companies that were primarily dependent on their branch business slipped deeper the crisis.
Shortly after the turn of the year, the Adler Modemärkte chain, for example, had to file for bankruptcy – with reference to the drop in sales as a result of the renewed store closings. The Irish discounter Primark, which, in contrast to the competition, does without its own online business, put the expected loss of income due to the second lockdown in Europe at a total of 220 million British pounds.
In Great Britain in particular, the renewed restrictions on brick-and-mortar retail accelerated the shift in the balance of power: For example, e-commerce specialists secured traditional names that had finally fallen to their knees during the Corona crisis: Asos acquired well-known brands such as Topshop and Topman from the insolvent Arcadia group, the controversial fast fashion retailer Boohoo struck at the 243-year-old retailer Debenhams, whose renovation failed shortly before Christmas. Significantly, however, the company only took over the trademark rights and the online business. Debenhams department stores have closed and the UK shopping streets have once again lost one of their previous flagships.
February: The next billion-dollar takeover: L Catterton acquires Birkenstock
Sensational takeovers were by no means just because companies made cheap use of insolvent competitors. Corporations and investors want to dig deep into their pockets for strong, promising brands. Shortly after the turn of the year, LVMH completed the takeover of the traditional jeweler Tiffany & Co., which had already been agreed months ago – the French luxury goods giant had the prominent newcomer cost the equivalent of almost 13 billion euros.
The next billion-dollar deal followed in February: the investment house L Catterton – behind which the LVMH owner family Arnault stands – secured the majority in the German shoe manufacturer Birkenstock. In press reports there was talk of a purchase price of four billion euros, but official figures were not published.
For the sandal specialist, the change of ownership marked the start of a new phase of growth: the company has since announced that it will be investing around 100 million euros in expanding its German production facilities. The main location in Görlitz will benefit – and probably also the Western Pomerania town of Pasewalk, where Birkenstock wants to build a new plant for its plastic shoes.
Other big brands found new owners in the course of the year: the Diesel parent OTB acquired Jil Sander, the US company Authentic Brand Group (ABG) secured the outdoor label Eddie Bauer, took over the entire traditional brand segment from PVH and came to an agreement with Adidas on the purchase of the US subsidiary Reebok, which is to be completed at the beginning of next year.
Less spectacular, but forward-looking, were numerous deals with which large corporations incorporated technology start-ups and logistics companies. In view of the ever faster advancing digitization in the industry and the increasing uncertainties in the supply chains, wealthy companies are now striving to get the appropriate skills in-house.
March: The doors stay closed: Corona has the fashion trade under control
The corona crisis is taking the feared course: fashion stores are still closed in many European countries. In Germany, impatience is growing in the industry and in some cases also in politics: the disputes between supporters of relaxation and health politicians and experts are getting tougher, the weekly development of the incidence figures determines the debate.
The consequences of what is now the third wave of pandemics are reflected in the results after a temporary recovery last summer: The Swedish clothing company Hennes & Mauritz reported a loss of more than 100 million euros for the first quarter.
The long-ailing textile retailer Esprit, whose German subsidiaries had already made radical savings in the first year of the pandemic as part of a protective shield procedure, even publicly worried about the continued existence of the company in view of the recent drop in sales.
The vaccination campaign, which was picking up speed in the spring, provided hope for an end to the health crisis – which ultimately could not prevent the fourth wave of pandemics before the end of the year.
April: About You – billion in sales on the way to the stock market
The Hamburg online fashion retailer About You was one of the winners of the e-commerce boom, which was intensified by the crisis, and celebrated a symbolic result in April: In the 2020/21 financial year, sales exceeded the billion euro threshold for the first time. Compared to the previous year, revenues grew by 57 percent to 1.17 billion euros.
In view of the strong numbers, speculation intensified about a possible IPO of the newcomer founded in 2014 – after all, other German online retailers from the fashion industry such as Fashionette and Mytheresa had already taken this path in recent months. About You actually soon had concrete steps to follow: the company has been listed on the Frankfurt Stock Exchange since June, and the newcomer was included in the SDax index as early as September.
May: Victoria’s Secret emancipates itself
Another newcomer to the stock market was announced in May – although it was not an up-and-coming young company, but one that had to dare to make a fresh start after turbulent years: the US retail group L Brands had decided to spin-off its lingerie brand Victoria’s Secret to be listed on the stock exchange as an independent company.
L Brands said goodbye to the scene after the group of companies had already discontinued or sold numerous brands in recent years. Since only the extremely successful cosmetics chain Bath & Body Works remained in the portfolio after the spin-off from Victoria’s Secret, the company has been trading under this name since then.
For Victoria’s Secret, the move marked a break with the past not only economically: hardly any other brand had suffered such a massive loss of reputation within a few years. A few years ago the label, with its fashion shows that were followed around the world, stood for unparalleled glamor, but recently it had to accept harsh criticism of its one-dimensional, clichéd ideal of beauty and lost a lot of customers.
The necessary reforms were introduced at Victoria’s Secret under the umbrella of L Brands: costs were cut significantly by closing numerous branches, while the brand was working on a contemporary, inclusive image. As an independent company, the laundry provider can now continue on this course with full concentration.
June: The bearer of hope is here – Daniel Grieder takes over the executive chair from Hugo Boss
At the Metzingen fashion group Hugo Boss AG, the long wait for the new bearer of hope came to an end: Daniel Grieder finally took over the executive chair at the beginning of June after his appointment as CEO had been announced almost a year earlier. Shortly before taking office, the former head of the fashion brand Tommy Hilfiger announced his ambitious goal of at least doubling Hugo Boss’ sales over the next five years.
In order to realize the plan, Grieder relied on a large number of personnel changes. The new signature in the brand positioning also quickly became clear: the traditional company intends to increasingly address a younger, fashion-conscious target group with digital initiatives and collaborations. It remains to be seen to what extent the fresh cell treatment will actually be reflected in the business figures.