In its first webinar organised in early-April, IMD Business School discussed the impact of COVID-19 on the luxury industry. The discussion highlighted, the crisis is likely to accelerate changes that were already unfolding within the industry. The webinar focused on five inflection points that would lead to a break with past practices and confirmation to new ones. One of the inferences was that luxury firms that pinpoint these new trends early and shift their focus towards them will emerge stronger from the crisis.

Tighten supply chains, manage inventories

The crisis has left countries across the world vulnerable to the breakdown of global supply chains. Traditionally, luxury has relied on global supply chains. In fashion, luxury brands have off-shored to low-cost countries even if it violates its claims of heritage-based origins.

However, now this may change as people may prefer to buy locally-made products, particularly those in the luxury category. Westerners might demand drastic changes in the way their countries operate which may lead to new laws for reshoring important chunks of supply chains.

To deal with these changes effectively, luxury goods players would need to tighten their link with their place of origin and start keeping buffer inventories in each region or even country. They would also have to make new strategies to enable global luxury brands orchestrate portfolios of local luxury brands.

A more fragmented international environment that COVID 19 might also change the relationships between Western luxury and China. If important chunks of supply chain exit China the Chinese export sector would take a hit. This would weaken the demand for luxury products in the country and give rise to a new economic nationalism as China would prefer to buy from local luxury brands such as NIO, Mao Geping and Erdos. Western brands would then have to adopt a more local strategy and buy from local actors.

Another change that would come is the digitisation of fashion events which according to Achim Berg, Global Leader, Apparel, Fashion & Luxury group at McKinsey & Company may make bi-annual fashion shows a thing of the past. He believes, fewer buyers will be willing to fly to attend fashion shows in the post-pandemic era of economic privation. This will lead to a break in collection seasonality as was witnessed recently with Italian heritage brand Moncler Genius

Additionally, millennials may shift their attention to a more durable, less ephemeral take on luxury in the coming recession. The most recent brand to adopt this trend is the menswear brand Armani.

Focus on authenticity

Post COVID-19, Chinese luxury brands will realize that their growth is not guaranteed as the present generation might not be better off than the previous one. Therefore, these brands will have to focus on experiences, storytelling around purpose and values, heritage and authenticity to remain relevant to their newly discerning customers.

Many prominent brands are likely to recede as consumers will stay away from conspicuous consumption. This will bring the creativity of the brand to the fore. The displacement of logos would also weaken counterfeiters.

Berg feels, the crisis might lead to consumers suddenly embracing circular economies. Companies like Panoply may suddenly take off as people might have more time to go through their closets. Thus, circularity might become a new source of revenue and partnership opportunities.

Agility to improve resilience

In this highly uncertain environment it is important for brands to be agile. Embracing business agility by breaking with traditional organizing and leadership styles will help these brands to be more resilient. They would be able to manage more diversity so that when uncertainty strikes, they have more options to bounce back.

Business agility also helps fashion brands to shift their, resources, stocks and inventories more rapidly. It accelerates their decision making capacity and enhances customer centricity. Business agility also mobilises the collective energies employees hence post-COVID-19, we could expect a decisive shift towards business agility across luxury industries.

Vastra App run by Ahmedabad-based Charmeuse Technologies raised an undisclosed amount in an angel funding round led by angel investor Vivek Khare along with other members of early-stage investor collective LetsVenture. Vastra App will use the fresh capital for customer acquisition and product development. The platform aims to reach 5,000 businesses across India in the next two years.

Founded in 2018 by Vikas Rajpurohit, Vastra App provides business process management and decision-making solutions to apparel manufacturers by leveraging data and analytics. It uses data from sector participants such as manufacturers, production managers, workers, designers, sales persons and suppliers. Users can also transact digitally using the app.

The platform counts around 500 apparel manufacturers, mostly from Ahmedabad and Surat, as its clients. It claims to have recorded 1.5 million transactions so far, with manufacturers making payments worth ₹80 crore to workers on the platform. It also adds about 60 customers per month, according to the statement.

Bengaluru-based LetsVenture, which was started six years ago by Sanjay Jha and Shanti Mohan, claims to have enabled 200 start-ups to raise over $114 million from 6,500 investors, 120 micro-funds and 150 family offices on its platform. The company is also an alternative investment fund, which manages assets worth $19 million.

In addition to slowing sales and supply chain disruptions, backlogged inventory has been one of the biggest problems faced by apparel brands and retailers throughout the duration of the pandemic

In an attempt to weather the storm while helping out with the cause of protecting healthcare workers from COVID-19, brands like Blade + Blue is diversifying to making masks from its leftover fabrics. The company has also donated some of these masks to healthcare workers and first responders in addition to selling them to the general public.

Banana Republic and Old Navy are also donating and selling non-medical cloth face masks. The masks by Old Navy are also being made from the brand’s leftover fabric.

Earlier on in the pandemic, retailers like Joann Stores and Neiman Marcus started making masks for frontline medical personnel in light of a nationwide PPE shortage, even though at the time there were conflicting data as to the effectiveness of these cloth masks in particular situations.

Cotton Council International (CCI) will use Sustainable Apparel Coalition’s sustainability measurement suite of tools, the Higg Index, to drive environmental and social responsibility throughout its supply chain. In its relationship with the SAC, CCI will contribute both data and resources to support the Higg Index, which measures sustainability performance and drives supply chain transparency and decision-making to improve efficiency and sustainability impact. The Higg Index is an indicator-based suite of tools that enables suppliers, manufacturers, brands, and retailers to evaluate materials, products, facilities, and processes based on environmental performance, social labour practices, and product design choices.

As the latest member of SAC, CCI joins more than 250 global brands, retailers, and manufacturers, as well as government, non-profit environmental organizations, and academic institutions, which are collectively committed to improving supply chain sustainability in the apparel, footwear, and textile industry.

Edinburgh-based shopping app Mallzee has launched Lost Stock clothing boxes to tackle fast fashion's transparency problem. Mallzee fills the boxes with cancelled clothing orders from brands like Topshop, New Look, and Urban Outfitters, and the proceeds from sales supports garment workers fighting the coronavirus, while reducing new season clothing from ending up in landfill.

Major retailers like Arcadia Group, New Look, Debenhams, and Sports Direct are only a few brands that have cancelled over £1.6 million in clothing orders. Last-minute order cancellation by Western retailers — many from the United Kingdom — has left millions of garment workers unpaid, starving, and vulnerable to sickness from the coronavirus

Mallzee partnered with Bangladesh NGO Sajida Foundation to launch Lost Stock clothing boxes to ensure payment for garment workers and avoid new clothes going to landfill. The foundation promises that with each purchase of a £35 Lost Stock clothing box, proceeds go directly toward garment workers and their families to provide a food and hygiene package that supports a family for one week.

In the US, Mirae Asset Global Investment is pleading that Anbang Insurance Group breached the terms of its $5.8 billion hotel chain sale by shuttering properties. Mirae claims that closures in response to the outbreak are irrelevant. A unit of Anbang has sued to force the Korean investor to complete the transaction.

These lawsuits are being watched closely in India. Indian acquirers of a stake in Victoria’s Secret have sought legal advice as private equity firm Sycamore Partners has walked away from the beleaguered lingerie chain

Sycamore argued that the clause had been triggered because current owner L Brands Inc failed to pay rent and furloughed thousands of workers. The pandemic was no defense for L Brands violating terms of the agreement, the buyer said in its complaint in the Delaware Chancery Court.

Marquee Brands LLC, a leading global brand owner, marketing and media company plans to take back the BCBGMAXAZRIA and BCBGeneration licenses from Centric Brands, which has filed for bankruptcy under Chapter 11. Marquee Brands will continue operations of the wholesale and e-commerce business to ensure seamless continuity.

With this announcement Marquee Brands is accelerating its rapidly growing digital business. In launching Marquee-Direct, the company made the decision to bring all e-commerce in-house and to handle all site design and development, merchandising, content creation and customer engagement. This was made possible with Marquee’s long-term relationships with best-in-class logistics partners for delivery and customer service. In this ever-changing retail environment, these capabilities will be crucial to assisting the growth of Marquee’s other operating partners as well as allowing the company to scale by adding new brands to the platform.

Adding the BCBG Group to this platform, which includes Ben Sherman, Body Glove, Dakine, Bruno Magli, Motherhood Maternity and Pea in a Pod, will allow Marquee Brands to achieve a more sustainable scale while also achieving better operating leverage.

More than 150 global corporations, including Burberry, H&M, Zara owner Inditex, PVH Corp signed a United Nations-backed agreement urging governments to align their COVID-19 economic aid and recovery efforts with ambitious, science-based climate action in a bid to recover better.All 155 companies, which represent a combined market capitalization of more than $2.4 trillion, are calling for policies that will guard against future disruptions by promoting efforts to rein in global temperature increases within 1.5 degrees celsius above pre-industrial levels, and in line with achieving net-zero emissions well before 2050.

The statement arrives as world leaders are preparing not only trillions of dollars in stimulus packages to prop up their pandemic-battered economies but also their enhanced national climate plans under the 2015 Paris Agreement.

A study published by Oxford University earlier this month concluded that incorporating climate targets into policy and spending will reduce vulnerability to future shocks and disasters, create good jobs, cut down emissions and ensure clean air.

Casa Everz Gmbh, the owner of Germany-based healthy footwear brand Von Wellx, will shift its entire shoe production of over three million pairs annually from China to India with an initial investment of Rs 110 crore. The brand will set up a new manufacturing unit with a production capacity of over three million pairs in Uttar Pradesh through a collaboration with Latric Industries as part of an understanding with the state government.

Casa Everz Gmbh had two manufacturing units in China with an annual capacity of over 3 million pairs. Latric Industries already has a capacity of five lakh pairs for Casa Everz Gmbh specifically under which it produces Von Wellx Germany – five another 5 lakh pairs, he added.

Now, the brand will set up a new unit with a production capacity of over 3 million pairs. The investment in Phase 1 of the project will be about Rs 110 crore over two years.

The company chose India over other locations since it believes that India is going to be the next manufacturing powerhouse of the world if it is well supported by business conducive government policies.

Post COVID-19, the growth of wedding rental market in the US seems uncertain. Rent the Runway, the poster child for fashion rental, has already announced lay-offs, temporary pay cuts and furloughed staff in response to the pandemic. Because of the COVID-19 pandemic, the company’s sales have dropped significantly. It has also faced allegations of not properly protecting its warehouse employees from coronavirus. The brand has enacted a series of safety measures in its warehouses, as well as giving employees the option of choosing not to work, staying home and using paid benefits.

Rent the Runway is not the only rental company facing challenges as a result of the pandemic. Other platforms, including UK-based, peer-to-peer site Hurr Collective, have also seen a dramatic fall in the number of people renting. While some sites have encouraged people to continue renting items for all those Zoom meetings we’ve been having, it’s a difficult sell considering the price point.

While rental has been hit hard during international lockdowns, there are already positive signs that the sector is recovering. YCloset in China has seen the numbers of people renting increase since lockdown measures were eased at the end of March. Some rental companies may also look at shifting their current models following the pandemic. YCloset, which is backed by e-commerce giant Alibaba, added resale to its services in September 2019, for example.

Hurr Collective has already started encouraging people to list their garments online, considering so many of us are sorting through our closets right now.