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Today, the fashion industry is at the brink of what has been termed as ‘retail apocalypse’. The closure of several brick and motor retail stores which started around 2010 soon escalated into a downward spiraling effect. Several big brands including some heritage brands filed for bankruptcy and guess what, the wide spread of coronavirus which began in the late 2019 did not help the situation either, if anything the scenario today is much worse resulting in brands now struggling to hold strong due to building economic crisis, huge financial debts eventually resulting in some of them closing stores and also filing for bankruptcy.
And although bankruptcy does not mean the end of business for the company, we all remember how brands such as GM, Delta Air Lines, American Airlines made a good come back after filing for the Chapter 11 of the US Bankruptcy Code, don’t we?
But when it comes to fashion industry we will have to wait and watch how major brands like Forever 21, Aeropostale, Neimen Marcus, J.
Crew, J C Penney, Diesel, Gymboree survive? While bankruptcy can result in the liquidation or sale of a company, it does present an opportunity to restructure while continuing to operate, suspend or reconfigure debt payment, and bounce back, so to speak.Only time will tell.
But the question arises, Why is the fashion industry facing this ‘existential crisis’? What triggered such a downfall? Did we see it coming? What changes in the apparel business dynamics could have prevented this from happening?
Hello and Welcome to my channel.
This is Poorva here aka Rainbows n Cupcakes. In this episode I am going to talk about the evolution of the fashion industry, the current situation in the apparel business, COVID-19 and what the future looks like.
To understand more about the future we first need to rewind and explore the history of business of fashion. The fashion industry was born as early as the eighteenth century in Europe. Traversing into the 19th century, fashion grew exponentially and soon was divided into haute couture and ready to wear. Fast forward to the 20th century, each decade offered a new trend right from feathered hats, to the roaring 20’s jazz era, to puff sleeves, to poodle skirts, to bell bottoms. The advancement in the fashion industry over the years meant an improvement in the quality of living along with the ability to express oneself. Mid 20th century saw fashion become progressively more casual across all genders and ages. Newly developed materials such as acrylics, polyesters, and shiny PVC found their way into everyday apparel and designers became more and more experimental with themes and styles. New synthetic fabrics meant that fashionable styles could now be bought at any price point. These materials were so pervasive that the seventies soon became known as the “Polyester Decade’. In fact, In the 1970’s, Vogue declared, “There are no rules in the fashion game now.” referring to overproduction flooding the fashion market with inexpensive clothing made of synthetic materials. Also since fashion was more varied and experimental.
20th century saw the birth of fashion shows which laid the pillars for the now hugely popular and paparazzied fashion weeks. 20th century also saw the birth of what we know today as the phenomenon of ‘fast fashion’. In the early 1990s when Zara opened its store in New York, New York Times used the words ‘fast-fashion’ to describe Zara’s incredibly fast production model that could bring clothing from design to stores within two weeks’ time. Soon, more retailers like H&M, Gap, Forever 21, Top Shop began producing clothing in record time, which also aligned with the beginning of online fashion shopping. In the past, retailers were used to launching new styles four times a year to match the traditional seasons, however fast fashion retailers started pushing out new ‘seasons’ every seven days creating 52 style seasons a year. 52 I repeat!
And so the phenomenon of fast-fashion was off and running, with thousands of styles being produced and millions of tons of textile waste being discarded each year. Fast-fashion created the throwaway culture that exists even today, with many people viewing their clothing as discardable.
21st century had a rocky start with the subprime mortgage meltdown of 2008, leading to a market crash and the Great Recession. During this economic crisis, consumers of fashion underwent what was termed as “values correction” by retail consultant Candace Corletta. The luxury sector suffered along with the rest of the economy, less because affluent consumers lacked the money to buy and more because it was considered bad taste to shop while others were losing their homes. Shopping almost seemed like an embarrassing activity to indulge in. But times changed quickly, and only a few years later, plenty of people who had stopped shopping went back to consuming luxury goods, even though the middle class greatly suffered. New millionaires were now minting money all across the globe and stock prices of multinational corps such as LVMH and Kering began to soar again.
Today, Retailers and brands are pushing more new products to consumers across multiple channels and different geographic regions in the hope of striking a sale. The fashion industry produces approximately 100 billion pieces of clothing per year but dig deep and one can find that there is just too much assortment with lack of creativity. This has also resulted in huge amounts of textile waste. An average American now generates more than 80 pounds of textile waste each year.
The Coronavirus has clearly spinned the fashion world around. Amid this pandemic the purchasing power of fashion consumers has significantly reduced. Fashion brands are announcing massive revenue drops almost by double digits. The industry is facing a reckoning as sales plummet, and consumers rethink their priorities in a post-Covid-19 world.
The Council of Fashion Designers of America and the British Fashion Council have publicly called for a “slower pace” and called out excessive production and deliveries. Instead, they suggest producing less product that is more creative and of higher quality. They also called for a shift in cadence, so deliveries align more closely to when consumers need them.
Anna Wintour the Vogue editor-in-chief is of the opinion that the pandemic has really caused the industry to pause, and rethink what fashion stands for, what it means, what it should be. Wintour also believes that coming out of the pandemic, consumers are expected to focus more on shopping at brands and designers that they feel reflect their own values and those that are more sustainability-minded.
Experts align with this belief that coming out of the pandemic, we could see substantial shifts in how consumers shop and this could be potentially an end to the ‘extreme consumerism’ era as people become more considerate in their purchases.
Brands like Gucci have already outlined plans to shift towards two seasons per year, the second luxury brand after Saint Laurent, owned by luxury conglomerate Kering, to hint at wider changes to how they will be marketing and selling fashion. The move by Gucci, often a leader in the sector, could result in other brands following suit.
But we must remember that although It is true that in times of crisis consumers re-prioritise their needs. It is equally true that once a crisis passes, they often return to previous patterns. Fashion consumption is largely driven by the fundamental need to project social standing. People routinely consume fashion as a treat when they feel good, and as a pick me up when they feel bad. All of this has been the case for decades, so why would it change after this pandemic?Also since it particularly did not change after the great recession of 2008?
Going forward consumers need to account for their purchases.
Consumers also need to do their research and never hesitate to ask brands and retailers questions on their production practices, sustainability policies.
Brands on the other hand need to take more responsibility upon themselves to follow best practices producing less product that is more creative and follow a shift in cadence, so deliveries align more closely to when consumers need them.
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