Will the modest survive? COVID-19 puts fashion industry to the test

“Keep trying until you succeed,” Ghizlan Guenez wrote on her Instagram in October. Six months later, the founder and CEO of The Modist stopped trying and shuttered the three-year old modest fashion e-commerce platform. “You take risks, sometimes disproportionate to the potential reward,” wrote Guenez at the time.

The Modist on Apr 3 said the “global crisis”, referring to the COVID-19 pandemic, left the “young business vulnerable with no option but to cease operating”. Whether or not it was wholly the impact of the pandemic—sharply falling consumer demand intensified by supply chain disruptions—that claimed the high-profile modest fashion business, the crisis inflicted by the spread of the coronavirus could be the start of a big downturn in the fashion industry.

In an April coronavirus update of its report The State of Fashion 2020, consulting firm McKinsey estimates 27-30% contraction year-on-year in revenues for the global fashion industry, although it does say the sector could regain positive growth of 2-4% in 2021. The firm also expects a large number of global fashion companies to go bankrupt in the next 12 to 18 months as over 50% of them were not even earning their cost of capital in 2018.