The Profound and Lasting Impact of Pandemic on Fashion Industry

This report provides a comprehensive analysis of the impact of the COVID-19 pandemic on the fashion industry. It begins with an introduction outlining the scope and objectives, followed by a detailed examination using PESTEL analysis to assess the political, economic, social, technological, legal, and environmental factors influencing the industry during the pandemic. The report then applies Porter's Diamond Model to compare the success of fashion businesses in different locations and industries. Further, it analyzes the competitive landscape through Porter's Five Forces, evaluating buyer power, supplier power, competitive rivalry, the threat of new entrants, and the threat of substitution. The report concludes with a summary of the key findings, highlighting the pandemic's profound and multifaceted effects on the fashion industry, including supply chain disruptions, shifts in consumer behavior, the rise of online retail, and the increasing importance of sustainable practices.

Impact of pandemic in Fashion
Industry

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PESTEL analysis:........................................................................................................................3
Porter's Diamond Model:.............................................................................................................5
Porter's five forces on fashion industries in pandemic................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Impact of pandemic are the economical and social disruption which is caused by it on the
lives of millions of people. The impact of pandemic has been great of all kind of business
organizations including fashion industry. This project will explain the impact caused by
pandemic on fashion related organizations related to their external factors with the help of Pestle
analysis. With the help of porter's five forces this project will examine how has the pandemic
affected the competitive aspects of businesses. In this project Porter's diamond will be used for
comparing how the success of fashion industries changed in different places or industry during
the pandemic.
MAIN BODY
PESTEL analysis:
Covid-19 pandemic has affected the fashion industry to a greater extends than anyone
could think about it. Clothing and fashion retail industry has always been a major business for
UK. The rising death rates, starvation, unemployment, lock-downs and many more such issues
are the results of this pandemic. PESTEL analysis will look through all the factors affecting
industry during a pandemic.
Political factors: Fashion industry in UK has a global reputation. Government has the
power to make the company buy fabrics fro their own countries in cases where taxation on
imports is high. There are groups like PETA who are boycotting against many major brands like
Fendi, Dior and even Benetton groups for using fur from animals but there are some brands like
Gucci who went fur free (Schrøder, Kongsgaard and Berthelsen, 2017). Fashion industries have
asked for financial support from the government because of the recent lock-downs. Half the
industry is going into unsustainable future.
Brexit uncertainty which is UK withdrawing itself from European Union has caused a lot
of concerns. UK imports cloths and shoes from Europe in heavy quantity, if trade relation of UK
with Europe disappear industry will have to pay more for the same quantity and this will result in
price hikes for such items. Even Political figures plays an important role as they influence on the
industry with they wear. Clothing can go beyond being just fashion to expressing political
statements.

Economic factors: The industry is still recovering from the recession and has hit by
pandemic. There is poor market performance, company does not have money to buy raw
materials and consumers does not have money to invest in cloths. There are several
manufacturing issues which include less availability of fabric, and order cancellation. But few
brand who have stores fabric imported from other countries into their safe house are having
benefits from Pandemic. Factories sand outlets being shut down resulting in job losses of many
workers, malls are shut down and so the outlets of the companies leading to bankruptcy for many
companies like JCPenney, brands like Zara has closed many stores and Giant Canada Goose has
laid off many workers (David, 2019). Because of this lock-downs and work from home
conditions, has made people from stop buying formal clothing which is a major lose for few
brands whereas company like lululemon sales are increasing because of more demands for
sweatpants and home gear. Chanel and Louis Vuitton has raised their prices, they believe in you
only live once, buy that bag.
Social factors: Outbreak of this pandemic, created a panic situations among people.
People are unable to go for work and due to this companies are opting for remote work. Brands
endorsed by famous people and celebrities become a hit in UK, Many musicians have mentioned
several expensive brand names in their lyrics which attracts the fans towards that brand. Mask
wear have been a new fashion statement after this pandemic, they have even appeared on
catwalks in haute couture industry.
Technological: This pandemic has made the use of technology very important and trendy
among people. Online shopping has been a hit in today's world. Internet has triggered the ability
of anyone to own their own shop. This pandemic has resulted into so many people starting their
own little online shops and boutiques (Larchenko, 2020). It can be difficult to set up a fashion
brand name in a country like UK but e-commerce sites are giving anyone an open opportunities
to sell their products online. Digital store-fronts have become a new normal. Biggest impact of
pandemic is on physical stores because people are fearful to enter large space hence, brands are
pivoting towards digital sales to remain profitable. Not just online shopping but brands are
opting for showcasing their products via online presentations. British fashion council is
developing a digital fashion week platform for designers.
Legal factors: Fashion industries set in UK must follow country's rules and regulation for
that particular industry to stay legit. This includes following the tax restrictions, export laws, and

inflation costs of the country (Gjoni, 2020). The companies must follow the labour and workers
right. Due to strict laws, many brands have withdrew their set-ups to save costs but customers are
hating this process.
Environmental factors: Fashion Industry is a little responsible for greenhouse
emissions, it consumes more energy than aviation and shipping industries. UK shoppers buys
cloths they never wear and purchase is more than any other country in Europe. Sustainable
Fashion is more in demand than ever before, customers are well through on the damage done by
fast fashion on the environment. A designer like Olivia Oblanc is aiming and designing cloths
that are both ethical and economically suitable (Yusop, 2018). Slow fashion is one way to
nurture and protect environment.
Porter's Diamond Model:
This model is used to analyse the competitive environment and showing the strength of
one business over another. There are four factors:
Factor conditions: It mainly refers to resources which are available or not within the
nation. For companies like Zara, have availability of natural resources in the country they are
setting up like in UK, presence of water channels, they have low labour costs and reasonable
labour productivity. Lacking point can be poor infrastructure facilities.
Demand conditions: Home market demand conditions of products and services are rising.
Some companies in the industry can be prices sensitive to customers, this magnifies rivalry but it
might also limit upgrading (Vlados, 2019). Because of the pandemic there are limited store visits
with increasing fashion content.
Related or supporting industries: One company's success can be related to another one's.
Presence of allies in industry can help brands to helpful for growth and expansion for the
companies. Presence of rival industries can be helpful as it allows companies to push themself to
be better than others but also has disadvantages such as limited supply of local machinery.
Firm strategy: Competitiveness of firms depends on the strategy and structure of the
company. Many companies are rivalry oriented towards price. Global competition has allowed
companies liken Zara to understand cultures of different places and predict trends.

Porter's five forces on fashion industries in pandemic
This model is the approach used for determination of competition in a given market. The
Covid 19 pandemic has made its impact over the fashion industry which has heavily affected the
competition in this specific market (Chowdhury and et.al., 2020). Porter's five forces draws out
five factors for evaluating the competition in this industry. These five forces are as follows,
Buyer Power :
According to this force it is the power that the buyer has in order to decrease the prices
they pay for a certain product. In fashion industry buyers usually have relatively high force. Due
to the pandemic the fashion industry was mostly limited to their online transactions because of
the customers hardly had a direct bargaining power. Despite having no bargaining power the
customer had to power of selecting their brands on the online market (Sen and et.al., 2020). This
increased the competition in the fashion industry company such as Zara, The company had to
provide high discounts for decreasing the prices of their fashion products. The pandemic was the
reason for loss of jobs for many people due to which the buying power of some customers
reduced as well. This company used multiple techniques for reducing the prices of its product. In
introduced systems which allowed its customers order products at home providing full safety
from the Covid 19 virus. Customers started buying clothes in large quantity as they were
available in fairly cheap prices.
Supplier Power :
The suppliers for most of the fashion industries are from third world countries. Due to the
pandemic these countries where effected the most. Thus, it can be said that the power of
suppliers which was already low decreased even more because of the pandemic. The control of
the suppliers is very little in fashion industry. Suppliers of these organizations are always at the
risk of getting swapped out because these companies have multiple sources of their products.
Primark a well renowned fashion retailer in UK had to suffer a lot during this pandemic as the
customers buying power had decreased (Halliday, 2021). This decreased the sale of this
company because of which the suppliers of fashion industries stopped getting orders from the
company. As the company already had left over stock which it could not finish.
Competitive Rivalry :
The fashion industry is known for its intense competition in UK. This is because there are
a lot of retailer in this industry which sell almost similar products. Due to the pandemic many

rivals in fashion industry companies suffered huge amount of losses. Even in these extreme
conditions the competition was still very tough among the rivals of these industries. Different
methods where adopted by companies for leading the fashion market in the times of pandemic.
Companies started using online shopping websites for building there business more and more.
Many companies started providing high discounts on bulk purchase of clothes (Brydges and
Pugh, 2021) This helped them in multiple way. Companies where able to clear their stock and
also decrease their losses. Some examples of the companies which reduced their price during the
pandemic for increasing their sales are Tesco, Primark and also Zara. Many of the other
companies where also following the similar strategies for survival in the pandemic.
Threat of New Entrants :
The market conditions for the fashion companies where very poor during the pandemic.
All the existing companies in this market where suffering from losses. This was a very difficult
period for a new company to start its businesses there for all the fashion industry companies
where helped a little due to Covid 19 pandemic. This was obvious as the economy was going
through a recession period. Although, after the impact of the pandemic was slowed down a little
the market conditions got little better some companies did develop during this period. Most
important factor for these companies should have been the introduction of something new.
Without introducing something new the competition would be far superior for any company to
last. Some companies where seen producing masks which was very essential in the pandemic.
This gave competitions to some companies for example Tesco.
Threat of Substitution :
Luckily the competition of fashion industries has to face almost no substitutes of clothes.
This force is very negligible in the fashion industries. For the companies in this market the threat
of the real threat of substitution comes directly from the competitors. Therefore, the pandemic
was not actually able to influence any substitution for clothes in the fashion market, because of
pandemic a new product of mask was introduced in this market(Higgs and Kocik, 2020).

CONCLUSION
With the help of this project the impacts the Covid 19 has had on the fashion industries is
concluded. This project talks about how the internal factors are affected of fashion companies
due to the pandemic. In this project the factors influencing the competition in this market has
been discussed and how it was influenced by the pandemic. The affects of the pandemic
influenced the success of fashion industries in different places is discussed with the help of
Porter's diamond model.

REFERENCES
Books and Journals
Brydges, T. and Pugh, R., 2021. Coming into fashion: Expanding the entrepreneurial ecosystem
concept to the creative industries through a Toronto case study. The Canadian
Geographer/Le Géographe canadien.
Chowdhury, and et.al., 2020. A case study on strategies to deal with the impacts of COVID-19
pandemic in the food and beverage industry. Operations Management Research, pp.1-
13.
D’Adamo, I. and Lupi, G., 2021. Sustainability and resilience after COVID-19: A circular
premium in the fashion industry.
David, J., 2019. PESTEL analysis of the UK. Retrieved October. 30. p.2019.
Gjoni, A., 2020. The Impact of Covid-19 on the Creations of Fashion Designers.
Higgs, H.I. and Kocik, A.M., 2020. How can stakeholders pressure firms to create value through
innovation and CSR?: A study on CSR-driven innovations in the clothing industry.
Kusá, M.U.A., IMPACT OF PANDEMIC ON CONSUMER BEHAVIOUR IN THE FIELD OF
SUSTAINABLE FASHION.
Larchenko, V.V., 2020. A fashionable mask: branded value proposition during the coronavirus
pandemic.
Schrøder, M.K., Kongsgaard, I.R. and Berthelsen, R.G., 2017. Towards a Circular Fashion
Industry.
Sen, S., and et.al., 2020. The Unprecedented Pandemic'COVID-19'Effect on the Bangladesh
Apparel Workers by Shivering the Apparel Supply Chain. Available at SSRN
3598542.
Vlados, C., 2019. Porter’s diamond approaches and the competitiveness web. International
Journal of Business Administration. 10(5). pp.33-52.
Yusop, Z.B.M., 2018. PESTEL analysis. COMRAP 2018. p.34.
Online
Halliday, S., 2021.Primark hurt by Covid in latest year but results show business strength.
[Online]. Available through: <https://ww.fashionnetwork.com/news/Primark-hurt-
by-covid-in-latest-year-but-results-show-business-strength,1256596.html>