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3 February 2024

Vienna Insight: Closures in fashion retail continue

The fashion retail business in the mid-price segment has been under pressure since the emergence of international fast fashion retailers decades ago. In recent years, the Corona pandemic, inflation, increased energy prices and wages have made it even more difficult for brick-and-mortar stores to compete with international fashion retailers such as H&M, Zara or Mango and online retail platforms such as Amazon, where retailers undercut each other on price, or fashion providers such as Shein with its network of manufacturers and strategy of trend forecasting with the rapid production of trendy items that are sold at a low price.

The bankruptcy or closure of small fashion retailers and independent designer stores - often one-person companies with sporadic contract employees - usually does not generate major media interest. They disappear without a media fuss. In the case of Grandits or Jones, the mainstream media reported. This week, the bankruptcy of the Viennese menswear retailer Grandits prompted several articles in the media, including the public broadcaster ORF, to recapitulate the closures or bankruptcies of other long-established Austrian retailers, such as the shoe store chains Salamander and Delka, or fashion retailers such as Gerry Weber, Northland or Jones. The latter filed for bankruptcy in 2023, having already become insolvent in 2019. In an article in the Kurier, CEO Gabor Rose pointed to the changed consumer behavior and announced the relaunch of the online shop, also with new fashion looks, by January 2024.

Example sources for articles about Grandits and Jones are ORF and Kurier:

Image: created the picture with AI showing a couple of a man and a woman on a shopping boulevard in Vienna in the afternoon. People are walking along the tree-lined street with shoppers, some of them looking into shop windows. The couple check their smartphones. The image was created using Microsoft Bing, Image Creator from Designer, powered by DALL-E 3 on February 3, 2024.

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