Corona crisis brings a boost to online retail and the fashion stores fear of existence

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The corona crisis has spurred online retailing – but fashion houses are starving. This is shown by the retail sales in June, which the Federal Statistical Office published on Friday. The online trade therefore recorded an increase of 30.7 percent compared to the previous year. In contrast, fashion and shoe stores and department stores made 16 percent less sales. The industry association HDE continues to worry about many dealers – and before a second wave of infections.

Overall, retail sales in June were 1.4 percent above the pre-crisis level, as the statistics office in Wiesbaden announced. Compared to June 2019, sales rose by 5.9 percent after adjustment for prices. Compared to May, they fell by 1.6 percent. The significant increase in online business is “unusual even in this very dynamic industry” and is significantly influenced by the corona pandemic, the statisticians explained.

Furniture stores, as well as the trade in household appliances and building supplies, reportedly generated 14.6 percent more sales than in June 2019. The trade in food, beverages and tobacco was also able to enjoy the same effect – the increase was 2.3 percent. Supermarkets made 3.1 percent more sales. Smaller grocery stores, on the other hand, posted 4.0 percent less sales.

“The situation is improving, but remains critical for many retailers,” explained the German Trade Association (HDE) and also referred to its current survey of 500 retailers. According to this, two thirds of the companies that sell something other than groceries achieved at least 75 percent of the sales of the comparative week in June 2019. According to HDE, more customers are slowly coming back into the shops.

For 27 percent of retailers, the situation is “still very serious,” and many fear for its existence, explained HDE general manager Stefan Genth. There is “no reason to give the all-clear”. According to Genth, two thirds of the non-food retailers expect sales to decline again in the second half of the year. Most retail companies will also not be able to make up for the sales losses that have accumulated in recent months.

From the point of view of the trade association, it is all the more important that the shops are allowed to continue opening. “For many retailers, if there were renewed restrictions or even a second phase of the lockdown, there would be no chance of escaping bankruptcy,” warned HDE President Josef Sanktjohanser.

In view of the increasing number of corona infections in recent days, he urged more discipline to comply with hygiene and distance rules. “It makes me very uneasy that many apparently no longer take the rules so precisely,” said Sanktjohanser.

Despite government countermeasures and suspended insolvency applications, numerous retail companies are no longer able to come out of the corona crisis on their own – through no fault of their own or because of existing financial problems. The most prominent example is Galeria Karstadt Kaufhof: According to information from the Verdi trade union, around 50 branches of the protective bankruptcy bankruptcy are now threatened with closure in the department store chain.

The Esprit textile group has also applied for a protective shield procedure for several German subsidiaries and plans to close around 50 stores by the end of November 2020. According to the credit agency Creditreform, AppelrathCüpper and Hallhuber are also on the list of bankruptcy fashion retailers. The ailing fashion chain Tom Tailor recently negotiated with its donors about a new financial structure in order to survive the crisis.

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