Fashion manufacturer and retailer Draps has lost millions due to coronavirus

The Olomouc manufacturer and retailer of women's fashion Draps quantified the losses caused by the long-term closure of stores ordered by the government last year and this year due to the coronavirus pandemic. The company lost sales from six of its stores in shopping centers overnight, as well as deliveries of women's fashion to wholesalers. "Our turnover dropped significantly last year and a similar trend was evident at the beginning of this year," - said Pavel Bokůvka, Draps' chief operating officer. The company survived the sales outage without reducing the network of stores and the number of employees.

Draps sells women's fashion through its own stores, e-shop and contract partners. "We lost our two main sales channels during the lockdown. It was a significant loss for us," said Bokůvka. The Draps company sews women's fashion in workshops in Olomouc. It had to keep its stores closed last spring, and the owners dealt with the same situation in the autumn and at the beginning of this year. Although the company recorded a significant increase in sales of fashion clothing through the e-shop during lockdowns, it failed to replace the robust shortfall in other sales. "Our losses last year are in the millions of crowns only in the case of closed stores," Bokůvka pointed out.

Even this year did not start well for domestic textile sellers due to the growing epidemic and other government regulations. "We lost the main part of the spring season. After closing them, we transferred some of the goods we had prepared in our stores to our e-shop and we managed to sell it at least this way," said Bokůvka. The company had to cope with a drop in deliveries to partners who also could not sell in their closed facilities. "We still have spring goods intended for business partners in stock. The question is whether they will take all the goods from us after the stores open. I rather assume that they will reduce orders," said Bokůvka. According to Bokůvka, other domestic sellers now also have large stocks of spring clothing, so more massive summer sales can be expected.

State compensation from the COVID-Rent program according to Bokůvka covered only a part of the costs of closed stores in shopping centers. Nevertheless, Draps has retained all its dozens of stores and employees. "Only last year at the end of May we closed a store in Brno, where the lease agreement ended, and due to the onset of the epidemic, it did not make sense for us to conclude a new agreement. We will open all six remaining stores next week," Bokůvka said.

According to him, it is not yet clear how the Czechs will react to the possibility of buying fashion again in brick-and-mortar stores. Whether they will start spending the savings they have made due to closed stores and reduced spending on consumer goods, or they will save for fear of worse times coming. Autumn orders for Draps clothing from wholesalers are already comparable to last year. "Actual sales will depend on whether there is another threat of closing stores in the fall," he added.

Source: CTK and Draps