2020 has been quite a surprising and genuinely tough year so far. It started with a steady January sales period and a relatively calm February. Taken by surprise, in mid-February Italy heard about the first serious Coronavirus cases occur in Milan. Later the virus spread and the infection cases were rising in numbers day after day until the beginning of March, when the government eventually announced the lockdown of the country. By Franz Josef Hoeller.
Most stores closed their doors by March 10 and were shut until May 18. This was also the case for bars, restaurants, hotels, barbershops and other industries where staff have a lot of physical contact with customers. This situation caused a fair amount of problems to retailers, distributors, agents and brands.
The end of the snow pre-book season was interrupted and many agents could not see their customers in person as they had to stay home. As confirmed by the sales representatives from all Italian regions, the shop closure resulted in lower pre-book numbers compared to the industry estimates for the year. Generally, sales done by e-mail or Skype do not drive the customer to order the product in the same way. A purchase often requires the buyer to see the technical product in person.
The ski areas closed early and had to organise travel home for many tourists earlier than expected. The confinement has resulted in an even bigger problem for summer tourism as we are still not sure if international tourists will be allowed to travel to Italy this summer. Italy heavily relies on the tourism business and the absence of such national income can drastically reduce the country’s budget and the ability to help our citizens cope with difficulties. Along with the food and beverages industry and the hotel industry, boardsport retailers see the big percentage of their turnover from sales to tourists.
The government is currently helping companies with cheap bank credit and other benefits. For example, every business with a valid VAT number received 600 Eur for inability to work in March 2020. Rent can be partly, around 60%, deducted from future tax payments. Admittedly, it does not completely cover the losses and often is not enough to save businesses from closure. Many shop owners are already facing and try to fight against bankruptcy. Stores have been out of cash with invoices still coming at the end of each month, whilst the entire spring stock is still unsold.
The lucky ones, who had set up a good online store before the Covid-19 crisis began, are, for sure, the winners. Online figures do show good growth, as nearly every Italian online store confirms. Unfortunately, this is only a small achievement for many shops, as most of the smaller independent stores get most of their turnover from their physical store.
Skate hardgoods, however, suffered less and were stable with great increases in sales online, which means that many kids still went out to skate in front of their houses or in their backyards to kill time.
What will the future bring, how many customers will come shopping after the lockdown, how will discounts affect our market? These and many more questions are in the retailers’ heads right now and nobody knows how the situation will unfold. What is clear though, is that many retailers, agents and distributors always wished, and now can hope, that the industry is going to slow down.
Lukas from Sub Skateshop and Sublime streetwear stores puts it like this: “Going more for quality than quantity, having longer seasons, postponing sales periods and being able to sell summer goods during the summer (July – August) and winter goods during winter (December – January) would be my wishlist for the upcoming seasons and years.”
Stay healthy and hopefully, cheerful Italians will see you again very soon, since we really want to give everyone a big lovely hug.