Dusseldorf The fashion industry is raising the alarm. “We now urgently need liquidity, otherwise the existence of the German fashion trade and the fashion industry is massively threatened”, medium-sized companies demand in a joint statement. Signatories to the call include fashion brands from Falke to Marc Cain and Marc O’Polo to S.Oliver.
“We don’t have any sales due to the closed shops. But at the same time, we now have to pay for the goods for the coming autumn-winter season, ”says Daniel Terberger, CEO of fashion service provider Katag AG from Bielefeld, describing the dilemma. The companies are demanding from politicians a liquidity fund of 850 million euros.
The industry representatives are convinced that this could secure the liquidity of the top 30 textile industrial companies in Germany, which represent 60 percent of sales in German specialist retailers, for the next six months. They want to be able to grant their retailers payment terms of up to 180 days. “It’s not about a grant,” explains Dieter Holzer, CEO of Marc O’Polo. “We want to repay most of the money from the fund after it expires.”
Katag boss Terberger sees the fund as “helping people to help themselves”. The industry assumes ten percent of the liability risk. According to the initiators, the management of the desired liquidity fund should take over an independent auditing firm.
The federal government had promised support for small and medium-sized companies through loans from the Kreditanstalt für Wiederaufbau (KfW). However, from the point of view of the fashion industry, this help may come too late or may not reach it.
Online trading cannot compensate for the loss of sales
The initiators of the call from the fashion industry fear that the structures of the city centers could collapse as a result of the corona crisis. “Not everyone is aware of the important role that medium-sized fashion retailers play in city centers,” said Dieter Holzer. “If many medium-sized retailers fail in the corona crisis, the loss of attractiveness in the city centers is great.”
Criticism that financially stricken fashion companies are now calling for state aid does not apply to Terberger and Holzer. “It’s not about supporting weak companies, but healthy medium-sized companies,” Terberger made clear.
He assumes that fashion retailers will be able to gradually reopen their stores in Germany over the next four to six weeks. “However, if that should take three to four months, we have completely different problems,” said Terberger. Because the online trade cannot compensate for the loss of sales in the thousands of stationary shops.
This was how it was in the fashion trade after the first week of closure Google– Searches for fashion online shops did not increase, as the German fashion institute in Cologne states. Instead, the search queries dropped Zalando by 29 percent, by Bonprix by 37 and by About you by 27 percent.
The fashion industry sees the liquidity fund as a first important step in solving the corona problems of the fashion industry. “In a second step, we then have to form a roundtable of the fashion trade and industry,” announced Terberger. There should be further measures in consultation with the politicians, such as additional Sunday opening hours, to compensate for the drastic dip in sales due to Corona.
In Germany, experts estimate that a total of around two million jobs at 5000 companies depend on the fashion industry.
More: Online trading is not a sure-fire success even in the corona crisis.