It is no mystery that the coronavirus pandemic threw airline, show, and food businesses off track, and in this case, fashion is no exception. Due to the pandemic, people are spending less on non-essential luxury items, disrupting the natural cycle of supply and demand in the industry. However, designers and fashion houses already spent money on producing and presenting their pieces for Autumn and Winter 2020, but given the circumstances should brands go on to produce their collection amidst all the chaos, or will fashion skip a season?
On the 27th of April, fashion giant, Saint Laurent made a move to rise out of the regular fashion schedule for the rest of 2020. To the average Joe, it might not be a big deal, but in the fashion industry, Saint Laurent is stepping out of the status quo. Moreover, this further sets off a lot of brands’ dilemma towards producing their autumn-winter collections. Since everyone is canceling orders right now, small brands, especially, worry about producing their autumn and winter collections as they might not meet the minimum order requirement with their factories. Meanwhile, brands that do not have any trouble placing orders, are facing production issues after factories that produce garments such as Italy and China face challenges to produce amidst strict lockdown orders.
The dilemma further unfolds as we recall that designers already spent money on presenting their fall and winter collections just to not be sold. This might cause many businesses to have cash flow issues since there will be no revenue if they decided to skip a season. On the flip side, if they chose to push through it and produce, they might be faced with a very likely probability of putting a hefty discount on the already existing unsold stock from previous seasons, reflecting the global financial crisis in 2008, on top of trying to sell their autumn-winter collection. Thus damaging their brand image and immensely cutting their revenues.
But what if the market turns around and comes back? Although China is reported “revenge shopping” with news such as Hermès doing $2.7 million in sales just on the 11th of April in their second-largest flagship in Guangzhou. The figures still don’t compare to what might have been. The Business of Fashion states that just one-third of Chinese consumers typically shop in China, with the rest preferring to shop abroad to benefit from price differences and the image that comes with buying European luxury goods in the country of origin. With travel bans still in place, this means that overseas sales will remain at zero, which concludes that Chinese sales would have to roughly double or triple to make up for lost revenue. And that is only in China. We still can not say the same for the rest of the world due to the differences in preferences.
The question remains, will brands skip the season or push through? All things considered, these are difficult times for every brand but perhaps some more so than others. Footwear and accessory brands, who tend to be less seasonal might not be hit as hard as clothing counterparts.
Once again, the pandemic is causing abrupt changes, testing businesses with no clear answer or correct solution. One thing is for sure, as the fashion industry is forced to adjust to a new normal, nothing will ever be quite the same again.