The current halt has been unnervingly frustrating. A straight lockdown of almost four months and an unwavering air of uncertainty still hasn’t answered most of our woes. A global trillion-dollar industry that once remained the centre of social galas has been now pushed under the bars of confinement. Luxury Fashion has been a beautiful, alluring industry – from design aesthetics, old money to aspirational extravagance. However, the current time has generously showered us with some bombs of truth that includes a dosage of dissipating smoke and broken mirrors.
But, is the pandemic the only reason for the downfall of certain designers and brands? Quite recently (and very shockingly), ace designer Diane Von Furstenberg had been making plans to close 18 of her 19 remaining directly operated U.S. stores. The brand had been already losing money for years. The pandemic has left many businesses exposed, with a run towards the need to change from a brick and mortar model immediately. Some, hidden under the glam, have been on the verge of collapse for a very long time.
Closed Shutters
Fashion Critic, Robin Givhan in her article for The Washington Post writes, “For shoppers, fashion was an all-encompassing pop culture phenomenon — but a phenomenon is not necessarily good business. Bricks-and-mortar retailers opened outlet after outlet, e-commerce expanded its reach, all the while discounting merchandise that customers refused to buy until it was discounted even more because mostly everyone had learned to shop by the mantra: Never pay full price.”
Amidst the price war, the industry is still debating the ‘need to fix and make its supply chain transparent’, sustainable steps in all parts of the manufacturing process and how they can be more sensitive to public emotions – but, for how long have we been stuck in these conversations? To add to it, the recent war of racial injustice makes it a lot more important for design houses to understand the medium of real communication and needs to right itself.
The fashion industry right now is much more than just the game of aesthetics and glam, as it was in the 1990s. During the 2008 recession, when the economy was hurtling down, Saks Fifth Avenue took the lead in frantically discounting merchandise, and other stores followed. Well, currently, luxury powerhouses like Chanel, Louis Vuitton and Gucci have raised prices to combat the pandemic and aid its lower sales impact. On the other hand, British label Mulberry went on to lower its prices to entice consumers to buy. Decreasing prices always remains the first, prompt strategy. But, does that damage brand values? Luxury is trying to save where they can, which brings us to extensive job losses too. Recently, Burberry revealed that it plans to make 500 job cuts after its comparable retail sales fell by 45% in the three months to June 27th. Similarly, Harrods has announced that 14% of its workforce will be made redundant, and Harvey Nichols has also warned of job cuts.
Highlighting grave episodes of bankruptcy in the wake of the pandemic, Ascena – the conglomerate behind Ann Taylor – filed for bankruptcy and said it will close at least 877 of its 2800 stores after declining sales and ballooning debt. J. Crew was the first big US apparel retailer to file for bankruptcy protection after struggling with declining sales and a huge debt of US$1.65 billion. In another shocking episode, New York-based luxury label Sies Marjan closed its doors due to the significant financial impact from the pandemic. According to a statement by the brand, founder Sander Lak said, “What we have worked on has been a dream come true. Thank you to everyone who has given their time and talent to Sies Marjan over the years." Following the announcement, the brand’s Instagram page has since been deleted too. In an article by The Washington Post, Designer Prabal Gurung said that he had been putting money and effort into things he thought he needed, such as a big marketing budget, only to now think it was all unnecessary.
How to be saved?
All of us have had enough tough times. With online sale and e-commerce being the only fruitful means, the future still doesn’t look sweet. Kering reported an interim revenue decrease of 29 per cent to €5.4 billion and a profit dip of 58 per cent while LVMH reported a 68 per cent earnings decline. Kering’s star performer, Gucci, wasn’t immune: sales at the group’s biggest brand fell 45 per cent. Prada Group swung to a €180 million loss in the six months ending 30 June 2020 from profits of €155 million in the same period last year. But who and how can one bring positivity to the sales and marketing values?
It wouldn’t be wrong to say that we are witnessing a major millennial global revolution. As Alvin Toffler in his book ‘Future Shock’ writes, “Not merely an individual but an entire society, an entire generation — including its weakest, least intelligent, and most irrational members—suddenly transported into this new world. The result is mass disorientation, future shock on a grand scale. Change is avalanching upon our heads and most people are grotesquely unprepared to cope with it.”
However, brands remain positive in their outlook that consumer spending would pick up pace in most countries as stores reopen. Retail has taken a remarkable hit and design houses who have worked on solutions quickly seem to be in a better spot. Brands which had been relying on an old business model got nowhere to hide. The reselling culture was driven by the streetwear model of product drops, which is now widely adopted by luxury brands, like Telfar.
Yoox Net-a-Porter Group (YNAP) and Armani have announced a new strategic development that will redesign and develop a digital and integrated shopping experience for customers. It will integrate Armani’s digital stores with their physical boutiques and leverage YNAP’s global logistics network to create more flexibility and connection between Armani’s customers and products, both online and offline.
Going Digital
Talking about online, technology, combined with some ‘real’ connection with the community, can eventually save the prominent constituents of the industry. An example is Burberry’s first ‘social retail’ store in China.
Fashion shows are now directly sent to us in our emails or Instagram, ending the ‘front-row’ policy. Now, you can be in your PJs with Cheetos and witness Valentino’s digital magic from your bed itself. But, in that process, are we killing the various people involved – event curators, guards, stylists, photographers? Luc Deperrois, a florist talks to NYTimes, “For us, couture week is very intense. We could be doing the flowers in Mademoiselle Chanel’s apartment in the morning, then for the Lutetia hotel, then a dinner for a brand. Or Chanel calls and says they want 100 bouquets of flowers delivered to clients who are coming to their show in the next 24 hours. Now it’s all mostly stopped, though. There are some orders — enough to keep our staff, but not for anyone extra. I am hoping that because so much of fashion is on Instagram now, there will be a need for flowers to animate the sets and the looks, to bring some humanity to the digital world. And that in September, life will begin again.”
For independent companies that are dangerously sailing without a global footprint, the struggle to survive can be especially lonely and terrifying.
“The problems facing the industry are most often caused by short-term fixes instead of long-term strategies, the belief in quantity over quality and, of course, ego and inertia.” writes Robin Givhan. The pandemic has bought both the most powerful and ‘not-so’ powerful ones to build each other up through funds, online sale and friendly interactions. If one has to find the silver lining, it’s that the remaining fashion system could be reset, a reboot that can keep everyone at the heart of it together. Well, only time will show us how and when the restructure happens!
