In recent days, some of the biggest pillars of fashion are facing the consequences of the pandemic and the lockdown, recording sudden business interruptions, shop closings and a reevaluation of business models, clearly no longer in line with current times.
This is the case of the famous designer and entrepreneur Diane von Furstenberg, who recently declared the closure of her London boutique located on Bruton Street and with the definite closure of the entire British branch, which made the bankruptcy official.
Like DVF, other brands are also suffering the same fate, what indeed continues to worry is the constant drop in sales of many brands, among which Ralph Lauren stands out, who recorded a drop in the fourth quarter of -15.4%, an ending that was tougher than expected. The quarter indeed ended with a net loss of $ 249 million.
Douglas also witnessed a -40.2% drop in sales in March 2020, with an increase in e-commerce, which with its 27.2% increase managed to at least partially make up for the losses caused by the outbreak of the pandemic.
The economic drop is felt from the United States to Europe; in France many brands have asked the courts for help through consortium procedures. This is the case of André, Naf Naf but also of the famous Camaïeu, who turned to the court after witnessing a refusal of a loan guaranteed by the government (PGE) to support commercial activities. Currently, like many other brands that face the same situation, Camaïeu is looking for buyers to enter controlled administration, a measure that would allow a moment of breath.
Like Douglas, also Burberry, the British giant, recorded a loss of 27% on the fourth quarter and has already taken countermeasures to save money.
In the meantime, many signatures continue to focus on e-commerce to make liquidity circulate. This is the case of the denim brand True Religion, already cornered by the competition (Levi Strauss and Madewell). New York-based brand John Varvatos has already taken steps to safeguard the long-term goals of the business by selling the company to its affiliate Lion Capital LLP.
The famous shoe and accessories brand Aldo Group has opted for a strategy similar to the French one, seeking support from creditors in Canada, signing the Companies’ Creditors Arrangement Act. It is preparing to do the same in the United States and Switzerland, while looking at the future and hoping for long-term growth.
Such drastic measures need not to be necessarily read as defeat across the board. Indeed, there are many hopes that this period of crisis will shake a rusty and firm fashion system from the depths of old ideals that are no longer practicable in today’s world. Creativity can find its momentum from periods of profound instability like this one and from here, it can achieve a reinvention extended both to style and to the economic model.