Fashion Redesigned Itself in Lockdown

(Bloomberg) -- Fashion executives have spent the lockdown figuring out how to sell their products online. They're learning lessons that may shape the retail trade even as America's shopping malls reopen.

That's just one of the abrupt changes forced on an industry highly attuned to shifting trends. Here's another: If customers are more likely to be buying clothes from home, they're more likely to wear them there too. In the absence of dress-up events, there's a surge in demand for comfort.

© Bloomberg Dressing Down

From food to furniture, businesses are mapping out what they expect to be the new patterns of demand — and repositioning their companies accordingly. Fashion has faced some of the worst upheaval of all.

In the pandemic's early stages, Americans all but stopped buying clothes. Sales plunged almost 90%, four times the drop in overall commerce. The demand shock threatened to bankrupt big-name retailers, and import-reliant companies had to grapple with supply disruptions too.

Here's how four corners of the stricken industry are making it work.

Wholesaler: 'Week by Week'

Richer Poorer, which sells "elevated basics" like tailored t-shirts and sweatpants, had just rebranded itself in January when the shocks started to arrive. The coronavirus knocked out two factories in China. Retail customers began to cancel orders. And then its headquarter city of San Juan Capistrano in California imposed a work-from-home regime.

"That was our first round of 'Oh, this is actually going to have big impacts for us,'" says co-founder Iva Pawling. "Not just for this season immediately, but through spring 2021."

In a normal March and April, most of what Pawling does — from designs and fittings to factory orders — would be geared to the season starting 12 months later. This year, "it's just been trying to survive week by week."

The company had planned a gradual pivot toward selling direct to consumers online. Instead it happened in a rush. Last year, wholesale accounted for 70% of revenue. This year, 90% has come from e-commerce.

Sales held up because pandemic-era demand was a good match for Pawling's offerings. "I have friends that run brands that don't sell the most comfortable clothing on earth, and they're not experiencing the same thing."

She quickly sold out of some items, and had to figure out how to speed up shipments from suppliers in Peru or Indonesia. She's in talks with a U.S. factory that could deliver quicker — though it'll also cost more. And with trade shows canceled, she's working on creative ways to showcase her collections online instead. Between March and July, "the entire business operations will completely have changed."

Designer: 'That's Forever'

Cynthia Rowley's cheery, playful aesthetic has been a staple of New York fashion for decades. Her boutiques closed during the pandemic, and department-store client Neiman Marcus Group filed for bankruptcy. But for a few years now, Rowley has been moving away from such venues anyway, toward her own e-commerce operation.

That's gathered pace in the pandemic — and so has the shift toward informal attire. There'll be fewer dresses for weddings or evening events. "It has to be things that are appropriate to the new normal," she says. "That's forever. People will have a more relaxed approach to what they wear."

Rowley says that will naturally lower prices. Also, "when you start talking about more accessible and more casual fabrics, that's when really good design has to come into play."

One thing that won't change is "that feeling that you get when you look at something that makes you really excited to put on," she says. "That's never going away."

Retail: 'Secular Shift'

Clothing stores all over the world are reopening, but Tapestry Inc. — which operates more than 1,500 of them — foresees a "secular shift" toward online shopping, according to Chief Executive Officer Jide Zeitlin. He'll likely pare back the company's network of Coach, Kate Spade and Stuart Weitzman outlets, with a higher threshold for renewing leases as they expire.

Tapestry's stores canceled $500 million of orders for handbags, jackets and dresses, saving cash to weather both the shutdown and what's likely to be a slow recovery. "This downturn is going to be more protracted than a quarter or two," Zeitlin says.

© Bloomberg Home Fashion

Meanwhile, online luxury retailer Farfetch has seen sales skyrocket — by 90% last quarter. Further changes may be on the way for the industry, says Chief Executive Jose Neves. "We'll see headwinds and tailwinds and side-winds."

The decimation of global tourism during the pandemic will hit luxury labels hard, Neves says. Visitors from China, for example, were a reliable source of sales in hubs like New York, London and Paris.

Neves says fashion is rooted in the wider culture, and will survive. His brick-and-mortar rivals may need a bit of reinventing — but "this was true before Covid."

Marketing: 'Discovery Magic'

Searching for a way to sum up consumption patterns in the pandemic, Jake Cohen invokes the "hierarchy of needs" theory of psychologist Abraham Maslow. "As soon as people were sent home, the first thing they did is buy three weeks of food," he says. "That's the bottom rung." Later on, "people are going to spend on things to reintroduce themselves into society" — like clothes.

Cohen is head of product marketing at Klaviyo, a Boston-based e-commerce marketing company. He says there's been a surge of interest in recent months, with the clothing business accounting for about 30% of his clients.

Traditionally, "the golden discovery magic was being in the department store," he says. "If you're a brand that got picked up by Bloomingdale's or Barneys or wherever, people walk through going for Chanel, but they see you, and all of a sudden you're a thing. People aren't in stores now, so how do they go find that new brand?"

Fashion is coming up with answers online, from customer quizzes to influencers on social media. Instagram is full of ads for face masks that match up with shirts or skirts. A swimsuit brand has its own blog and travel guide: "no one's traveling right now," but they're hoping to, so they might click the link. "Good storytelling, good branding and good content is going to attract people."

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Clothing and textile sector challenges during Covid-19: Part 1