New York CNN Business  — 

The retail industry has been decimated by the coronavirus pandemic, and much of the destruction has landed on luxury and fashion companies.

People have stopped shopping at stores, and many online shoppers are holding back on discretionary purchases. That has left luxury and fashion companies “exposed or rudderless,” and business will sink by as much as 30% this year, according to a new report released Wednesday from trade publication Business of Fashion and consulting firm McKinsey & Company.

According to the report, which surveyed 1,400 fashion professionals, luxury good makers and retailers will be hit the hardest: Sales are expected to decrease as much as 40%.

Fashion and luxury employees are facing “hardship and destitution.” Hundreds of thousands of retail workers have been furloughed, stores are closed and the disease has sent investors and consumers running scared.

The report warned 80% of the companies surveyed expect to encounter financial hardship this year, and it forecast a significant number of bankruptcies within 18 months if stores remain closed. Retailers across the globe have temporarily closed because local governments shuttered non-essential businesses to stop the spread of Covid-19.

Store closures would likely have a “domino effect” on the rest of the industry, because canceled orders could eliminate millions of jobs in the garment-making industry. Countries including Bangladesh, India and Cambodia could be hit especially hard, the report said.

Business of Fashion CEO Imran Amed is calling on companies to work together to fix the fashion industry once the pandemic eases.

“No company will get through the pandemic alone, and fashion players need to share data, strategies and insights on how to navigate the storm,” Amed said in the report.

For those retailers and fashion companies that survive, the report said they will have to make “bold and rapid interventions” to stabilize themselves in a possible recession.

Survey respondents also expect shoppers to gravitate even more toward discounts and low-priced retailers. Brands’ digital efforts should also be made an “urgent priority” following the growth of social distancing.

Luxury and fashion companies also expect fewer retailers to exist in the future.

“The crisis will shake out the weak, embolden the strong and accelerate the decline of companies that were already struggling before the pandemic,” the report said, warning of consolidation and mergers. Sears, JCPenney, Neiman Marcus and J. Crew were some of the most distressed companies prior to the outbreak, according to analysts.

But not all hope is lost. Both H&M and Nike (NKE) have recently said that sales are starting to increase again in Asia following closures of its stores in the region. Nike (NKE) CEO John Donahoe said in its most recent earnings call that it now has a “playbook” to use in other countries being affected by the virus.