At times, it’s hard to believe that just one month ago, as our Rosy Ajaka and the world of fashion gathered for Milan Fashion Week, few looked across the globe to Wuhan with any concept of the life-changing events that were about to unfold. Before the week wrapped up however, as talk of the coronavirus spreading through the city grew, designers were cancelling shows, and others were holding them behind closed doors. Will the world, and the world of fashion, ever be the same again?
The human effect is incalculable, and our thoughts go to those who have lost – and may still lose – loved ones.
The commercial effect across every sector is still building. Companies are in survival mode, as the global economy tanks and sales plummet. For many, the last week has been a mad scramble of phone calls and emails with retail partners and suppliers. Brands are struggling to get to grips with the rapidly evolving situation, with little insight into how long the current crisis will last, or how deep the economy’s downward spiral will go.
Throughout these days, it feels as if we are living within a movie.
Attendence at Milan was, ultimately, 50% down on what was expected. The following week’s show, in Paris, was even more catastrophic… 90% down. One by one, then en masse, retailers pulled their employees, and designers shut up shop, not sure what to do next.
Now, shops, factories and offices across Europe and North America have shuttered. The only certainty is that business as usual is impossible.
Since Paris, the downward economic spiral has been swift and shocking, as more and more countries have placed restrictions on the movement of people and trade. As of last week, Italy, France and Spain are among the countries only allowing vital shops to remain open, a category that does not include apparel or footwear. In the US, New York and California are among the states implementing similar measures.
Where shops are closed, there’s no income.
Farfetch is working with boutiques in Italy that sell through its online marketplace, ramping up efforts to drive sales volume and online traffic to these businesses and fast-tracking payments. But such efforts are a drop in the ocean. For now, e-commerce is no panacea, with many brands seeing a sharp drop in online orders over the last few weeks.
As brands adjust to a new normal, they are facing stark choices in the weeks and months ahead. The abrupt economic downturn currently underway is reminiscent of the financial crisis in 2008, which wiped out many independent labels.
Even fashion’s biggest retailers are suffering. Over the last week, fast fashion giant Inditex (think Zara, Bershka, Massimo Dutti, Pull&Bear, Stradivarius and others) said it would write down the value of its inventory by nearly €300 million. Burberry said it expects sales in its fiscal fourth quarter to be down around 30 percent compared to a year earlier.
Faced with such a dire outlook, fashion’s small and independent brands are in a particularly precarious position, stuck between retailers and suppliers, often with little to no cash to fall back on.
Right now, luxury goods are not a priority.
There are two ways to approach this: shut down and wait for the storm to pass, or be very proactive.
Despite the challenges, in conversations we’ve had over the last week, executives and creatives were upbeat about the opportunities the current crisis presents to step back and rethink ways of doing business.
The resounding view is that the fashion sector will use this opportunity as a blank canvas to have a new beginning, to rethink everything it does.
We, at Passions Arabia, believe that good things will ultimately come out of the current crisis.
In the meantime, stay safe, obey the rules, and get the latest World Health Organization COVID-19 information here