MEXICO CITY — Brazil’s fashion retailers are forecasting a 50 percent sales decline, if not more, this year as the coronavirus pandemic forces them to shutter stores.
“We are expecting 50 percent across the board,” said Luis Lima, chief financial officer at luxury beachwear brand Lenny Niemeyer, adding that lockdowns in top cities including São Paulo and Rio have forced thousands of stores to shutter.
Lima’s comments came as analysts are expecting similar losses for top retailers such as Lojas Renner, Riachuelo and Magazine Luiza, all of which are rushing to boost e-commerce offerings to offset plunging brick-and-mortar traffic.
Andrea Milanez, who handles public relations for São Paulo Fashion Week, said physical fashion retail is dead. “All of Brazil is closed and the only stuff that’s selling is online,” she said. “Everyone is doing sales but even then, no one is buying. People are worried about what is happening.”
Brazil is quickly becoming a hotspot for the deadly respiratory disease, with deaths topping 3,500 out of 53,000 cases over the past weekend.
While President Jair Bolsonaro has played down the ailment, calling it “a little worse than a flu” and demanding regions lift lockdowns, they are expected to continue, at least until May 10 in São Paulo. The restrictions have changed life in the nation’s largest city and fashion capital.
“There is a huge reduction in traffic, the sky is blue and we can hear the birds on the street,” said Milanez, who lives in the city’s once-bustling Via Augusta quarter.
Asked what legacy the virus, if any, will leave for Latin America’s largest retail sector, Niemeyer said one thing’s for sure — online sales will accelerate.
“People won’t buy like they used to,” she said. “They will probably change their view of fashion and how they buy it. We will probably see a lot more online buying.”
Already, Niemeyer has seen e-commerce sales surge, Lima said.