US ratings agency, Fitch Ratings expects apparel sales to improve in 2021 though overall sales are expected to remain below 2019 level. Stronger survivors in the apparel sector will also benefit from accelerating competitive shrinkage and limiting new store openings, says Fitch Ratings. Retail sales in the first quarter got a boost from increased vaccinations, government stimuli and discretionary budget savings by reducing service spending.

Revenues of top retailers Walmart, Target and Home Depot increased 15 to 40 per cent in the first quarter compared to 2019 levels. Fitch expects these retailers to maintain recent increase in market share, given a strong omni-channel model. These retailers could increase their revenue by 3-4 per cent at CAGR from 2019 levels to 2022, slightly higher than Fitch’s pre-pandemic expectations. Target could see a sustainable rise in discretionary categories such as apparel and home, and consumers tried Target’s private label assortment as a means of travel integration in 2020.

Fitch predicts multi-year investments by Kohl’s, Nordstrom and Macy’s could help stabilize or accelerate market share. Focus areas include omni-channel capabilities, store remodeling, investments in various channels, active wear and beauty categories. These retailers will benefit from the accelerated cash-constrained professional apparel players and department store closures and restructuring activities in 2020.