According to the assessment of the credit insurer Atradius, the textile trade in Germany is facing another difficult year. “Around half of the German textile retail trade is at risk of running into financial difficulties in 2022,” predicted Atradius risk expert Michael Karrenberg in a market analysis published on Thursday.
Even before the corona pandemic, stationary retail was struggling with falling sales due to the shift to online trading. The corona pandemic has accelerated this trend. In addition, the situation of the retail trade has been exacerbated by pandemic-related closures, supply bottlenecks and the desertification of many inner cities. “Anyone who didn’t have a well-functioning online trade or a strong and loyal customer base had to accept painful losses,” said Karrenberg.
According to the assessment of the credit insurer, there is no real recovery in sight for retail trade. The number of companies whose risk ratings had to be downgraded by Atradius had already increased significantly in the past year. Large fashion labels and clothing chains were also affected.
According to Atradius, the only exceptions to the downward trend are those chain stores and chains whose customers continue to shop in-store due to the low price level and cannot switch to the Internet, for example because they do not have a credit card.
In Atradius’ view, bricks-and-mortar clothing retailers must quickly adapt to the accelerated development towards online trading in order to remain viable. “One can assume that customer frequency in the city centers will not return to a pre-corona level,” said Karrenberg. “Only those who are strong online and can address customers with new stationary concepts will stay in business.” (dpa)