Around 300,000 may lose jobs in fashion industry amid coronavirus
Following the economic slowdown due to the coronavirus epidemic, around 300,000 people working in the fashion industry in Poland may lose their jobs, according to a report by the PwC consulting firm and the Association of Polish Trade and Services Employers.
According to analysts the state budget is also set to lose income. Estimates show that revenues to the state budget from taxes provided by the fashion industry stand at between PLN 13.3 billion and 16.0 billion (EUR 2.9 - 3.5 bln) a year.
The report states that the current situation will have a negative impact not only on the fashion industry, but also on clothing manufacturers, shopping centre owners, banks, IT suppliers, the advertising and media market, the payment market, security, cleaning services and, to some extent, also on companies operating in the logistics sector.
According to PwC experts, around 150,000 commercial employees may not receive full remuneration in May, and if the downtime lasts longer, as a result of the reduced activity of the fashion sector, demand for logistics services is also expected to decrease in May. This may cause redundancies in the transport and storage sectors.
The report also states that in the most optimistic scenario, assuming that the downtime will end in mid-April, the industry will have to engage external capital to the tune of PLN 10.9 billion (EUR 2.4 bln) in order to function properly, despite PLN 400 million (EUR 87.9 mln) in aid granted by the government.
In the most negative scenario, when the downtime will last until mid-May and will be reintroduced in October and November 2020, as well as in March and April 2021, the fashion industry will need an additional PLN 32 billion (EUR 7 bln), despite PLN 2.3 billion (EUR 505 mln) given in the government's anti-crisis shield.