How is the fashion industry coping with the coronavirus crisis?

How is the fashion industry coping with the coronavirus crisis?

How is the fashion industry coping with the coronavirus crisis?

Faced with the progression of the Covid-19 epidemic, the fashion industry is facing unprecedented challenges and must find solutions to limit breakage. Closure of stores and factories, online sales questioned and orders on stand-by… the health crisis is blocking the sector at all levels.

On March 16, like other countries, France in turn entered confinement to deal with the Covid-19 pandemic. These radical and unprecedented measures show the attempt of the various governments to stem this health crisis, the rapid development of which has globalized and unprecedented consequences.

The fashion industry, of which two key countries – China and Italy – have been greatly impacted by the coronavirus, is being hit hard by this situation, as supply and demand are suffering simultaneously. Producers, retailers, brands... no one escapes it. And while the fashion week release period is usually crucial for their turnover, several brands and groups are already reporting a significant drop in activity – such as, for example, the English brand Burberry, or Zara.

It is therefore an entire industry that is now in slow motion, pushing brands to find solutions to limit the consequences of a crisis whose duration is still unknown. Panorama of the challenges it faces.

The Chinese Challenge

The general lockdown in China quickly led to blockages in the production chain and orders, putting the fashion industry at the forefront. China is far from being just "the factory of the world", a role to which it has been reduced for too long: the country is in fact one of the biggest consumers of luxury globally - a study by the firm of Bain & Company advice from 2019 says Chinese customers drove 90% of industry growth that year, and 35% of luxury goods purchases were made by them. The shutdown due to the closure of retailers and shops on Chinese territory, coupled with that of production sites, explains the simultaneous slowdown in supplies in Europe and the drop in demand on the markets.

The gradual restart of activity in China at the end of March therefore appears to be a hope for the industry, as explained by Shangguan Zhe, artistic director of the Sankuanz brand, based in the city of Xiamen: “It is true that the textile factory with which we work in Italy is blocked, but the restart in the Chinese market is reviving our activities with the reopening of the points of sale.”

Necessary concessions

But if China is gradually emerging from its torpor, Europe is barely entering it. Italy, a major supplier of luxury textiles and leather, has gradually closed all its production sites, followed by European stores and retailers. Online sales services are conditioned by the sanitary working conditions of their employees. And if the aid announced by the State limits the temptations of dismissal in companies, the latter are not impacted in the same way according to their size.

Ester Manas, a Franco-Belgian creative duo, explains to us that he is saved by his small size. “We are lucky to be only two, so the crisis is only delaying the moment when the brand was going to take on a real scale, going from 4 to 20 points of sale.” Thus, the consequence for these brands is first of all that of canceled post-fashion weeks orders. Same observation for the young Alphonse Maitrepierre: “My showroom schedule during fashion week was particularly empty, with last minute cancellations.”

On the retailer side, the closures have a direct impact on purchases. Julia (first name changed), a jewelry buyer in a department store, explains that she has to make concessions: “I try to buy what we call “permanents” as a priority, pieces that do not depend on the seasons and that the we buy throughout the year. For “new products”, I make half-orders, so as not to let our suppliers down, while avoiding putting a strain on our budget.”

Department stores will no doubt face a considerable loss of turnover – according to Les Echos, a month of closure of Galeries Lafayette or Printemps would amount to a loss of 83 million euros for these companies.

A redesigned communication

Faced with these losses, brands and press agencies are rethinking their digital communication strategy in order to limit these financial consequences. Despite the cancellation of shootings, the brands are using the media in reserve: Balenciaga, for example, is making the video of its last show available in advertising on Youtube, dubbing the parade as the ultimate communication weapon for 3.0 brands.

On the press agency side, there is also time for adaptation. At Ritual Projects, the offices are closed: “The impossibility of working with physical clothing, the basis of our activity, is an opportunity for us to rethink our relations with the press and to further editorialize our subject (... ) This crisis also ends up confirming the essential character of the online press”, says its director Robin Meason.

Faced with this unprecedented shutdown, fashion can only try to limit the “panic effects”, as explained by Dominique Jacomet, former director of the French Fashion Institute (IFM), while preparing both badly a return to normal… the date of which is still unknown. “Unfortunately, recovery depends on the length of the crisis.” Let's hope that it will be a moment of awareness of the limits of our economic systems.