With the COVID -19 virus rapidly crawling into the skin of humanity worldwide, apparel brands and retail companies are likely to be severely impacted in the near term as government orders shut down malls, shops etc and initiates lock-down across states.
In this uncertainty, near-term growth may see sharp deceleration given higher concentration of stores in metro and Tier I/II cities and owing to lower footfalls. A report shared by ICICI securities states given higher operating leverage, near term margins may be impacted. Coupled with relatively higher valuation before COVID 19, stocks are likely to remain under pressure in the near term.
Aditya Birla Fashion & Retail (ABFRL) has shut its stores until March 31, 2020. The company has also stopped factory operations in Karnataka, Tamil Nadu and Odisha till March 31 in the line with local guidelines Most of stores of Future Lifestyle Fashions including Central, Brand Factory, aLL amogst other exclusive brand outlets are temporally shut down as per government advisory. Shoppers Stop has taken several steps to respond to the situation including wherever the company operates, it has closed all its retail stores until March 31, 2020.
Arvind Fashions had already moved to work from home policies for all its office employees, and has shut all its stores until March 31, 2020. The company will continue to assess the situation and consider restoration of store operations an appropriate time.