With shows postponed or moving online, customer orders and manufacturing delayed and reliable sales channels disappearing, industry leaders are predicting that the fashion ecosystem will be unrecognizable once the coronavirus pandemic is over.
Ralph Lauren and Capri – owner of Versace, Michael Kors and Jimmy Choo – have both this month reported massive drops in sales in the most recent quarter. Ralph Lauren reported a 57 per cent drop in comparable sales and said it would be re-evaluating its brand portfolio, real estate and corporate structure. Meanwhile, revenues at Capri fell 66.5 per cent year on year.
Store closures and a lack of tourism are important driving factors for these declines. But many experts also note that the pandemic has forced a hard reset, leaving the fashion industry wondering what’s next.
In a feature for The New York Times, Irina Aleksander outlined how the rise of social media, the need for novelty and a sped-up fashion cycle created a perfect storm for the industry’s demise, even before the pandemic hit.
Once the pandemic engulfed the world, it began to expose the cracks in popular luxury brands. Diane von Furstenberg, for example, has laid off some 300 employees and closed all of its US stores except for one while restructuring the business.
The struggles of department stores have certainly not helped matters. As stores have closed, avenues for selling designers’ wares have been eliminated.
Barneys, formerly a popular destination for designer goods, liquidated in February. Neiman Marcus has filed for Chapter 11 bankruptcy with plans to close four department stores and 17 off-price locations. And Lord & Taylor could close all of its stores if it does not find a buyer in bankruptcy. Nordstrom also recently announced it would be closing all of its luxury Jeffrey boutiques.
