Among the many traditions getting canceled by the pandemic is the annual parental headache of back-to-school clothes shopping. That’s bad news for many retailers.
Brands like The Gap, American Eagle, Abercrombie & Fitch, Urban Outfitters and Children’s Place rely heavily on fall back-to-school shopping revenue and sales and are set to lose big this fall as many schools across America remain closed, according to a new Bank of America analysis.
If most schools are shut, the bank’s research group anticipates Americans will spend less on clothes this fall and more on technology and supplies for homeschooling.
“Kids will likely dress more casually for virtual learning than they would to attend class in-person,” Bank of America wrote in its “Specialty Retail and Department Stores” report published last week. “Because of these factors, we expect the key back to school shopping period of late July through early September to be very soft.”
The loss of back-to-school sales is just the latest blow to struggling clothing retailers. Several, including Brooks Brothers, Men’s Wearhouse, Joseph A. Bank, J.Crew, JCPenney, Neiman Marcus and Lord and Taylor, have filed for bankruptcy since the US economic shutdowns began in March.
Bank of America said American Eagle, Abercrombie, Children’s Place, Urban Outfitters, Gap and its Old Navy subsidiary are in a vulnerable position do to their “heavy reliance” on back-to-school season sales, which it likened to most stores dependence on winter holiday season performances.
Industry analyst Christopher Walton, co-founder and co-CEO of Red Arch Retail, said all specialty apparel retailers with real estate inside malls are facing the same risks as other brands that have filed for Chapter 11.
Walton said he expects mass merchants like Target, Walmart and Amazon will absorb larger portions of retail apparel sales this fall.
“Consumers are consolidating trips out of safety concerns and they all serve as a one stop shop for people’s complete needs,” Walton told CNN Business. “Amazon will secure a greater share of the market because people will just buy what they need on demand if distance learning dominates. Those in the middle … and those especially stuck inside of malls, will struggle.”
A spokesperson from Abercrombie said it is in a “quiet period” and “cannot comment on recent trends,” adding that the company continues “to stay close to our customers and their new reality, and speaking to them on platforms that are relevant to them.”
American Eagle, The Gap, Old Navy, Children’s Place and Urban Outfitters did not respond to requests for comment.