Light after the lockdown: What the future of fashion and luxury will look like
The COVID-19 pandemic has ushered in a reckoning for the S$3.8 trillion fashion and luxury industries. What will emerge?
Not since 1939 have the worlds of fashion and luxury so completely ground to a halt. Stores are closed, orders cancelled, factories shut or repurposed to make PPE. The summer fashion shows have been called off, and it looks increasingly unlikely the September fashion weeks will go ahead – brands such as Saint Laurent and Tory Burch have already cancelled their shows.
No question, the COVID-19 pandemic has ushered in a reckoning for the £2.2 trillion (S$3.8 trillion) fashion and luxury industries – much of it around sustainability (and fashion’s lack thereof). What will emerge? Could a more responsible sector – one less damaging to the environment, that goes further to ensure the welfare of its workforce – materialise in its wake?
Environmentalists are certainly hoping so. The fashion industry has been making far too much for far too long. Clothing production has become so cost-effective at scale that brands would rather over-manufacture by 30 to 40 per cent than risk running out of stock. Much of that excess ends up incinerated or in landfills – Burberry famously burnt £28.6m in bags, clothes and perfume in 2017 to prevent them from being stolen or sold for too little (a practice it has since halted).
Since Europe went into lockdown, designers and executives from Giorgio Armani to Vetements’ Guram Gvasalia have been calling for change. They want their peers to produce less and less often. They want customers to buy more at full-price, and are petitioning retailers to realign the sales calendar so that summer sandals and dresses are discounted at the end of the season, in late September, rather than June. (Right now, flush with excess inventory, they are holding sales earlier than ever.) They are asking for an end to retail contracts where designers are given no order deposits and no security, and which leave designers financially liable for what stores can’t sell at full price.
Many of these demands are wishful thinking. Independent designers will not secure better terms with retailers, who will be more beholden to creditors and big brands – and less able to make risky bets on lesser-known names – than before. Nor will suppliers obtain better terms with designers – with so few orders coming in, brands will be asking for discounts, and they will get them. Garment workers will in turn find it even more difficult to secure a living wage.
Changes under way prior to the pandemic will accelerate. The big luxury brands, backed by even bigger conglomerates – namely LVMH and Kering – will rebound first and capture even more market share. The few globally recognised names that maintained their independence in the wake of the 2008 crisis – Prada, Ferragamo, Burberry, Tod’s – may take a look at their balance sheets and reconsider. Department stores will continue to consolidate and disappear – not just in North America, but perhaps also in Europe, which is more dependent on tourists.
Chinese shoppers, who were already shopping more at home following VAT cuts and a crackdown on daigou (personal shoppers who import luxury goods into China without paying duties), will be more likely to buy an Hermes bag in Shanghai than Paris or Hong Kong. Brands will close stores in capital cities and tourist destinations as a result.
It won’t be all doom and gloom. Fashion’s impact on the environment – the amount of carbon it produces, the millions of litres of dye that pollute the world’s waterways, its contributions to soil erosion and biodiversity loss – will drop sharply this year. Labels will produce fewer, smaller collections over the next few quarters, even years. Having seen the risks of a global supply chain, American brands will reinvest in local manufacturing, furnishing new jobs and skills.
Seasonal trends will continue to disappear as designers focus more on classic items that can be worn year-round – and stay on store shelves longer. The shift to more restrained, timeless pieces will ultimately give way to exuberance and excess – just as wartime fabric rationing paved the way for Dior’s New Look in 1947, and the 2008 financial crisis set the stage for Alessandro Michele’s Gucci debut in 2015.
Fashion shows will get a much-needed overhaul. Already, the volume of resources poured into 10-minute shows – sometimes involving two full days of travel to see a single collection in Rio or Marrakesh – felt outrageous amid a climate crisis. They are also boring to watch online. Instead, brands will experiment with digital presentations and live interactions with designers. Storytelling around brands and collections will improve as a result. It already has.
Fashion weeks will be smaller. Many designers won’t be able to afford to host them. Nor will magazines have the budgets to send editors to attend them. Deep-pocketed brands will fill seats with more influencers, exerting yet more control over third-party coverage. Unable to host showroom appointments, brands will invest in better showroom software, leaving buyers with less reason to travel in the long-term. This will be good for the industry’s carbon footprint.
Shopping habits will change. With less disposable income, consumers will be more conscious of what they buy, treating luxury items as investment pieces that will serve them for years – or at least hold their resale value. The shift in spending from high-end handbags to health – skincare, supplements, boutique fitness classes – already on the rise pre-pandemic, will continue. Online shopping will become more of a habit. Similar to the 2008 recession, there will be more support for buying second-hand and directly from small businesses who manufacture responsibly. Others will turn to fast fashion for cheap thrills.
Ostentatious purchases will be out – athleisure, which was losing its appeal, will be back in. To quote GQ, we are living in the age of sweatpants and are never going back.
By Lauren Indvik © 2020 The Financial Times