At the start of 2020 – before words like coronavirus and lockdown were part of our everyday vocabulary – Kenyan businesswoman Wandia Gichuru projected her clothing business Vivo would achieve at least 40% annual revenue growth over the previous year.
Now she doubts if the company will even match 2019’s numbers.
“The challenge is keeping the business alive and my people employed. We have 175 staff. Our liabilities haven’t come down nearly as much as our revenues: the malls still require a significant portion of our rent and the government still expects us to pay tax,” says Gichuru, adding that the company might have to permanently shut some stores.
Established in 2011, Vivo is a manufacturer and retailer of women’s clothing with 14 shops throughout Kenya. The company also owns the ShopZetu e-commerce platform through which it sells its own brand together with a handful of third-party labels.
With 737 confirmed Covid-19 cases and 40 deaths (at the time of publication), Kenya has so far avoided a hard lockdown. It has a dusk-to-dawn (7pm–5am) countrywide curfew, closed all schools and enforced a ban on social gatherings and international flights.
In mid-March, Gichuru closed all of Vivo’s physical outlets, primarily to protect staff who felt unsafe using public transport. She was also unsure whether the virus could spread through people trying on the garments. “We just had a lot of questions and not many answers, so we closed for a couple of weeks.”
Towards the middle of April, Vivo reopened its outlets once it felt confident it could protect its customers and after the government introduced rules to make public transport safer. “We discourage people from trying on the items but if they do and don’t buy it, we won’t put it back on the shelf for at least a day. From what we read, the virus won’t last more than 12 hours on clothing,” Gichuru notes.
To make up for depressed clothing sales, Vivo started producing reusable cloth facemasks at the beginning of April. To date, it has made about 200,000 units, which are sold through its stores, pop-up kiosks at malls and online. The company has also received large orders from security companies, banks and farming estates for their workers. The masks accounted for about 65% of Vivo’s revenue in April.
While its physical outlets were closed, Vivo’s online platform ShopZetu saw a sharp spike in sales with orders soaring from about 20 to 150 per day. However, now that the shops are open again, e-commerce daily sales have gone down to about 40 orders.
According to Gichuru, Covid-19 has prompted many Kenyans to try e-commerce for the first time and even traders at open-air markets are taking online orders and delivering.
Gichuru is currently investing time and resources into Vivo’s e-commerce platform as she believes many people will grow accustomed to online shopping because of Covid-19. “I don’t think stores are going to go away but the more you can offer across channels, the stronger you will be.”
Supply chain disruptions
Covid-19 has also impacted Vivo’s supply chain. While most of its clothes are manufactured locally, fabrics are imported. “The coronavirus affected us in early February when a container of fabric we had already paid for was stuck in China because all the factories were closed. For a business our size, having our cash tied up and our supply chain interrupted is hugely disruptive,” says Gichuru.
Vivo currently has an order of fabric waiting at a factory in Mauritius thanks to that country’s lockdown. “They are ready but can’t send it until after a proper inspection; unfortunately, those inspection companies haven’t yet reopened,” Gichuru explains.
Immediate rebound unlikely
Even when the economy fully reopens, Gichuru doesn’t expect sales to bounce back to pre-Covid levels right away. She anticipates people will remain nervous about their health and financial security. Those who have lost their jobs or on partial pay are likely to curb their spending. “I could be wrong but I would rather plan for the worst and be pleasantly surprised. What we have seen is that people are not necessarily focused on buying clothing.”
Gichuru believes a potential positive from this crisis might be that Kenya imports less clothing, which will be a boost to local manufacturers such as Vivo. The Kenyan government recently put a temporary ban on the importation of second-hand clothes in an attempt to stop the spread of the virus. It might take time, too, before those who buy their clothes abroad will be able to travel again. She adds there is a chance some international fashion retailers might divest from the Kenyan market due to supply chain complications in a post-Covid world.
“I’m one of those people who plans for the worst but hopes for the best.”
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