Dead Season. What will turn Covid-19 quarantine for shoe retail
01.06.2020 5565

Dead Season. What will turn Covid-19 quarantine for shoe retail

Shoe retail resumes operations in Moscow and the regions, calculates losses, evaluates prospects. Two and a half months of downtime were a serious test for retailers.

Moscow shoe retail is preparing to resume trade. The companies are trying to provide all the conditions for the full-fledged operation of stores and have stockpiled masks and gloves for their dear customers, which are ready to issue if necessary for free. Everyone is in a hurry to resume trading right from the moment the ban was lifted, on June 1, but many are aleatherg themselves whether they can survive, how long they will last, and how many of the existing stores will have to be closed in the coming months.

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The period of self-isolation due to the spread of coronavirus in Russia was announced on March 28 and has been going on for two months already, but retailers note that the flow of customers in their stores began to decline as early as March 15 - because of the frightening information about Covid-19, people already tried to avoid visiting public places, shopping centers. So in fact, the downtime for traditional retail lasted 2,5 months.

Shoe retailers missed the spring season. During the quarantine period, shoes could be purchased exclusively online. Placing Wildberries, Lamoda, AliExpress on the marketplaces for many brands made it possible to keep in touch with their customers. However, the demand for shoes in any case significantly subsided. “It was possible to buy shoes from the Unichel factory during the ban on sales in traditional retail in the brand’s online store, as well as on the Lamoda and Wildberries marketplaces. Everywhere we saw a slight increase during the isolation period, but it cannot be called a breakthrough, ”says Alexey Denisenko, director of development of the Unichel shoe factory. - Shoes are still a specific product, they need to be tried on. In addition, during the crisis, in general, consumer sentiment changed: people began to save. ”

Shop "Unichel" Shop "Unichel"

On the site of the largest Wildberries marketplace in Russia in the footwear category, there was a significant increase in sales of rather specific models - slippers, slippers, galoshes, so-called shoes for summer cottages, during the period of self-isolation, Russian consumers also continued to buy sneakers (sales grew by 60%).

Some of the retailers managed to quickly rebuild and direct the flow of customers to their own online store. For example, for the Econika brand, sales of seasonal goods in its own online store in April-May 2020 increased by more than 4 times compared to the same period in 2019.

In the retail network MBT Shoes (8 stores in Moscow and 4 in the regions), they note that their online store was able to provide only 15% of the previous turnover. “In general, compared to April last year, the company's turnover dipped by 85%,” says Svyatoslav Grishmanovsky, CEO of MBT Shoes. According to him, in April sales were not very active, because this month people were as isolated as possible, there was no point in buying expensive high-quality shoes, since there was nowhere to go in it. And May was more active, as in some regions relaxations for movement began.

Some retailers during the period of self-isolation of the population even noted - zero sales. “Sales of our own online store did not grow, on the contrary, we did not have the opportunity to trade, since the goods displayed on the online platform are the same goods as in our retail stores, which we had no access to,” says Vera Victoria Vito network marketing director (6 stores in Moscow and 3 in the regions) Larisa Vovdenko. At the same time, rental and salary expenses have not gone away.

Business hit

According to the Russian Union of Leatherworkers and Shoemakers, about three quarters of the retail trade in consumer goods is carried out in Russia by small businesses. Shoe retail is mainly small enterprises, where the staff is almost a family. Maintaining a team, fulfilling obligations to the team for many owners of retail enterprises was a paramount task. Of course, many counted on state assistance, for example, on the opportunity to get soft loans that would cover these costs, to compensate for the minimum wage for each employee ... And unfortunately, many did not receive any help.

“We didn’t dismiss our employees, everyone received a salary in accordance with the staffing table for the entire permanent part, we did not pay the variable in the form of percent of sales,” Larisa Vovdenko says. - Of course, we counted on at least some compensation from the state for downtime in a pandemic. But alas, ah. Even the promised minimum wage could not be received by employees, since one of the conditions for payment of such is the absence of tax arrears as of March 1, 2020. Our organization regularly pays all taxes, we pay millions. But we were fined one of the taxes in the amount of 15000 rubles. As a result, we did not receive a subsidy from the state. ”

MBT Shoes Store MBT Shoes Store

Svyatoslav Grishmanovsky calls aid from the state a fiction: “Thank you for keeping taxes on payments,” he says. - Like the majority in this sector, we did not have stocks and savings. They fed the staff, tenants, paid utility bills, communications, point guard services and more from the brook of proceeds from the online store, thanks to the most loyal customers. ” He regrets that during the quarantine the company had to part with two sellers: “They tried to keep the rest of the team. The salary was paid on time, of course, "cut everything" by agreement. We spent all the money that came from online sales. ”

With the majority of commercial property lessors, the company managed to find a compromise on discounts; in general, no one canceled the lease for months of inactivity. In order not to lose stores, MBT Shoes had to refuse to rent an office, because the property owner did not go to a meeting in negotiations on a reduction in the rental rate. “We paid at full rate and left in the midst of a pandemic, otherwise we would have paid fines, since the law on relations between the Lessee and the Lessor at that time was not yet considered in the Duma,” says the head of MBT Shoes. - We did not come under any programs for salary or loans, I think like many because the state appointed a “Jesuit” selective OKVED. Perhaps somehow in the future we will be able to prove our case. The tax office clearly sees all our registered cash desks with the transfer of checks and payment of the trade fee from all stores. The bank did not provide any credit, even reduced the overdraft. As I understand it, we will have to pay the state fee for the months of inactivity. ”

Among shoe retailers, retail companies, which were included in the list of backbone enterprises, were in a more favorable position. So, according to Alexei Denisenko, due to the status of a backbone enterprise, Unichel was able to use the credit line for employees' salaries. In addition to Unichel, the list of backbone enterprises included shoe manufacturers Paris Commune, Egorievsk-Obuv, Obuv Rossii, Faraday and shoe traders Kari, Zenden Group of Companies, Sportmaster, Detsky Mir, "TSUM Trading House", online retailers LaModa and Wildberries. The status of a backbone retail company also allowed the lifting of the ban on retail trade. For example, Kari stores in some regional shopping centers continued to operate during the quarantine period. Detsky Mir Group has temporarily suspended 62 of its 729 stores in Russia.

After quarantine

Vera Victoria Vito Store Vera Victoria Vito Store

Starting June 1, when shoe retail finally resumes operations in Moscow, store staff will meet their customers fully equipped, that is, in masks and gloves, as well as with the necessary supply of disinfectants. Despite the difficult business situation, retailers are ready to incur additional costs to ensure security measures put forward by Rospotrebnadzor.

“At the request of Rospotrebnadzor, the supply of masks and disinfectants should be in each store for 5 days, and some shopping centers require a whole month,” says Larisa Vovdenko. - In view of the fact that it seems that such restrictions will be extended, we decided to purchase reusable fabric masks, in addition to disposable ones, which are much easier to breathe, and after washing with soap or powder they can be used again. Of course, we will withstand the requirement to replace masks every three hours.

The directors are also obliged to monitor the condition of the staff, measure the temperature and prevent employees from working with the slightest suspicion of infection.

We think for now how to make the markup, because the movement in the store is not going according to plan, and communication is mainly not at the cash register, but in the trading floor. But instructions are given on maintaining social distance, we will try to comply. ”

Salon of shoes "Econika" Salon of shoes "Econika"

Nikolai Moskovkin, commercial director of the Econika chain, said that Econika stores were already open in 14 regions of the Russian Federation, and now, from June 1, all Moscow stores of the brand will open. “We adhere to the strategy of opening stores as soon as possible, ensuring the necessary safety requirements, both for the client and for our employees,” he says.

Econika notes that those regional salons that were the first to resume work show a positive trend - “customers are missing live communication.” But is it worth to expect high consumer traffic in Moscow in the first weeks of June, is still in question. Indeed, Moscow residents continue to have limited mobility and are officially allowed to make only two trips per week.

“It seems to me that freestanding shopping will now be more difficult to lure people. First of all, they will go to shopping centers, where there is more choice, ”Larisa Vovdenko says. Some of Vera Victoria Vito stores in Moscow are just open in the street retail format. She estimates the consequences of the pandemic for her business as catastrophic: “the goods were purchased but not sold, resources were depleted for salaries and rents. Despite the fact that it was possible to negotiate a lease on various sites for discounts from 50 to 100%, can we survive the big question. ”

MBT Shoes Store MBT Shoes Store

Svyatoslav Grishmanovsky believes that the first month after quarantine will be indicative of the viability of MBT Shoes retail outlets. “In those stores where people will not go, after permission to open in the first month, we will cut ourselves off. Write termination notices and ethically exit. What remains will remain. Consumers will decide. We are now “at the crossing” and we will summarize the losses when we cross the course, ”he summarizes. Marina Shumilina

Shoe retail resumes operations in Moscow and the regions, calculates losses, evaluates prospects. Two and a half months of downtime were a serious test for retailers.
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