The COVID-19 pandemic is expected to have a severe impact on the apparel industry, leading to significant losses in brand value. A report from Brand Finance, a business valuation consultancy, suggests that clothing firms may experience a drop of up to 20% in brand value. This projection takes into account the effect of the crisis on enterprise value and underlines the potential challenges that apparel brands will face in the coming months.

According to Richard Haigh, managing director of Brand Finance, clothing companies are in for a challenging road ahead. With store and factory closures, disrupted supply chains, and customers facing economic uncertainty, these brands must prepare for a tough and turbulent journey.

However, it is worth noting that the extent of the damage will largely depend on how brands respond to these challenges. Companies that can adapt quickly to the changing landscape are likely to fare better than those that are inflexible and slow to react. Retailers with innovative e-commerce strategies are also expected to emerge stronger from this crisis.

Brand Finance’s assessment coincides with the release of its ranking of the most valuable apparel brands globally. Nike continues its reign as the world’s most valuable apparel brand for the sixth consecutive year, with a brand value of $34.8 billion. The company’s success can be attributed to its distribution strategy shift, which involved reducing the number of retailers selling its products to regain control of customer relationships.

Gucci follows closely behind as the second most valuable apparel brand, experiencing a growth in brand value of 20.2% to reach $17.6 billion. Adidas, Nike’s main competitor, ranks third with a brand value of $16.5 billion, showing a 1% decrease from the previous year. Louis Vuitton and Cartier complete the top five with brand values of $16.5 billion and $15 billion, respectively.

However, not all brands saw positive results. Zara, the Spanish retailer, experienced a 21% decline in brand value, slipping to the 6th position in the ranking with a value of $14.6 billion. H&M also suffered a 12.7% decrease in brand value, ranking 7th with $13.9 billion. Chanel made its first appearance in the ranking at number 8, with a brand value of $13.7 billion, followed by Uniqlo ($12.9 billion) and Hermes ($12 billion). Levi’s recorded the highest growth rate, with a 38% increase in brand value to reach $4.1 billion. Rolex, primarily known for its luxury watches but included in the apparel category, was named the world’s strongest apparel brand, with a value of $7.9 billion.

These rankings showcase the successes and challenges within the apparel industry. While some brands have managed to navigate the changing landscape and maintain their value, others have experienced setbacks. As the COVID-19 crisis continues to unfold, it is crucial for apparel companies to adapt and innovate in order to safeguard their brand value and emerge stronger in the post-pandemic era.

Useful links:

1. Brand Finance
2. Nike