The local fashion trade is existentially threatened – Vorarlberg –

“Every third company faces bankruptcy!”

This statement comes from Theresia Fröwis, president of the commercial division of the Vorarlberg Chamber of Commerce. draws attention to the “existential situation in the fashion trade”.

“The crown crisis erodes equity,” explains Fröwis. “Short-term work only partially helps fashion trade in the crown crisis, because fixed costs in other areas continue.”

“Many fashion, footwear and sporting goods retailers have serious existential concerns because they are particularly affected by the crown crisis and the closure associated with it. Existing aid fund regulations are inadequate for our industry. We demand a solution that takes into account the special framework conditions in fashion retail, ”emphasizes division head Fröwis.

At Vorarlberg, we currently have around 600 companies in the fashion, footwear and sporting goods sector, which are represented by 800 branches and employ more than 3,000 people; in Austria there are about 62,000. “Many of these jobs are now at risk,” says Fröwis.

The department head explains: “Above all, the enormous costs of using goods are causing problems for the industry. Spring products must be paid for and most of them have already been delivered, but will soon be worth only a fraction of the originally calculated price. The desire to buy will remain low in the coming months. “

If there were no adequate compensation for the devalued warehouse, dramatic sales declines would doom many companies. Therefore, the industry demands adequate compensation for its depreciated warehouses.

Fröwis’ statements are confirmed by a current study by the Institute of Economic Economic Research: inventories are the largest asset position in fashion retail, at 33 percent, corresponding exactly to the average capital ratio in the industry. ” , says study author Peter Voithofer. He goes on to say: Calculate Now, in a scenario where a fashion retailer applies a short-term job and could sell parts of the warehouse in the coming weeks, almost all of the capital would still be used alone. In the spring / summer 2020 season, “you can expect a wave of bankruptcy in the clothing business right away,” reports study author Mag. Peter Voithofer.

In the present study, scenarios were calculated for a fashion retail company with an annual turnover of three million euros. In an optimistic scenario, this company loses two thirds of its assets, in a more realistic scenario, all of its assets. The study assumes a fashion retail company that will be profitable until February 2020.