When independent label Kwaidan Editions made its debut in the Autumn/Winter 2017 season with its mix of Crayola-coloured fabrics and structured tailoring, it quickly attracted top stockists including The Broken Arm in Paris, KM20 in Moscow and online retailers like Ssense.
“As a small, independent brand without big marketing budgets, we always felt like selling to the top stores would be a way of getting our products and name out there,” says Hung La, who co-founded the label with Léa Dickely. “Most of our business is through wholesale channels.”
But the husband-and-wife duo, like many young brands, are now facing an industry in flux, where the biggest retailers, once their lifeline, are struggling to survive in the pandemic. Nordstrom has cancelled orders, put off paying its vendors and plans to close 16 stores, while the Neiman Marcus Group, which also operates Bergdorf Goodman and Mytheresa, filed for Chapter 11 bankruptcy protection on 7 May.
The sales of clothing and accessories in the US alone fell by more than half in March, a trend that is expected to have only worsened in April, according to the US Department of Commerce.
Kwaidan Editions Spring/Summer 2020 show
© Kwaidan Editions
Dickely says that from the fallout of Barneys’s collapse, there are still unpaid invoices in her brand’s books. They have lost several partners since the virus outbreak, although she declined to name them. “It’s an uncertain moment for emerging brands, and lots of retailers have reacted to the insecure future by cutting their budgets for new brands. We have definitely felt the effects of Covid-19.”
“Wholesale relationships are important to many young brands, which can still greatly benefit from the big-hitting power of those blue-chip retailers in ways that are often out of their reach due to budget,” says Jack Bedwani, founder and chief executive of The Projects, a brand consultancy that has worked with Barneys, Calvin Klein and Amazon. However, Covid-19 offers brands a unique opportunity for emerging labels to free themselves from “the overbearing pressure and sometimes unrealistic demands” that large retailers previously wielded through their buying power.
Labels like Charlotte Knowles and Gauge81 have taken a more ruthless approach on their number of partnerships. “A crisis of this magnitude puts companies and individuals to the test. Relationships are either solidified or weakened. I can definitely say the change we have felt with Net-a-Porter is a heightened sense of partnership,” says Gauge81 co-founder Monika Silva.
Having experienced reduced buys and cancellations, “we intend to be very selective in taking on new stores,” says Knowles.
Plan for reduced sales
Retail partners are now liabilities, according to Mark A. Cohen, director of retail studies at Columbia University’s Business School. “Emerging fashion brands that were looking for support from retailers should be very wary of seeking exposure and sales from those platforms, as an enormous number of them are now closed. Further, they are unable to forecast an opening date, unable to credibly predict when this pandemic will be truly over, and, most critically, in potentially critical shape financially.”
He advises that labels take more control and develop “a multichannel sales approach that utilises social media as well as their online presence, to bring their brand to life and create an engaged community of loyal fans and customers”.
Dickley and La are selling to retailers who are more likely to survive this crisis and cutting costs. “We are looking at ways to scale back and truly focus on storytelling and strong products,” says La. “We feel like it’s the right moment to stay true to yourself and the identity of our brand and not get caught up in the race.”
Chopova Lowena Autumn/Winter 2020
© Nicola Neri
Chopova Lowena, the brainchild of Emma Chopova and Laura Lowena known for its recognisable pleated skirts made from fabrics and craftspeople in Bulgaria, won over 33 stockists worldwide in its first two years. But since Covid-19, every retail partner that was supposed to take on the brand this season pulled out except Ssense. “Most of the good new ones we were going to get didn’t want to take any risks during corona times,” says Chopova.
The duo is shying away from traditional marketing like print ads and runway shows and is focusing on showing clothes privately or via photography in hardbound books and using street-style stars.
Brands should prioritise finding their voice over scaling the business, says Steve Dennis, a strategic retail advisor. This could come down to taking a reserved approach to hyped-up products and media moments, and being comfortable with saying no. “Today, it’s much more important to be special, and that means finding a core audience that truly loves what you do and is willing to spread the story of your brand.”
While seasonality dominates many ready-to-wear brands that build their buzz through collections, Eckhaus Latta has turned to less trend-driven inventory and is offering more popular styles like denim and jersey.
“This doesn’t seem like the time we should be asking people to take risks. We also wanted buyers to be familiar with the pieces,” says Zoe Latta, who co-founded the brand with Mike Eckhaus.
Alexandre Arsenault and Charlotte Knowles
© Carly Scott/Charlotte Knowles
Outerwear label The Mighty Company launched direct-to-consumer, choosing not to partner with any retailers for the first year and a half. When the Los Angeles-based brand felt it was the right time to broaden its reach, it launched on Shopbop, later taking on Net-a-Porter, Bergdorf Goodman, Saks, Harrods and Harvey Nichols. But much has changed during Covid-19.
“Most of our retailers are cutting a lot of their budgets for brands. Our business last year was 40 per cent DTC (direct-to-consumer) and 60 per cent wholesale, but that trajectory is already changing drastically,” says Hanover Savas, chief operating officer and partner.
Baja East founder and creative director Scott Studenberg says that he was “already deep in the process” of overhauling the Los Angeles-based brands website before Covid-19 hit. “While we still have strong retailers like Shopbop, Rent the Runway and 11 Honoré, we are shifting the bulk of our business to direct-to-consumer and investing heavily in digital marketing.” April sales were up 64 per cent versus March.
“Traditional retailers are not your friend; they are going to be under enormous stress when they emerge from this crisis and cannot be looked upon as a safe haven for new brands,” says Columbia University’s Cohen. “Emerging fashion brands need to forge a pathway to customers on their own. To go very fast, you first have to move very slowly. I think every emerging brand needs to express itself online first and foremost, and then, only with consistent success in hand, consider investments in physical retail.”
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