Despite the unprecedented turbulence in the world’s retail markets the luxury conglomerates reported strong bounce back results this month. Both LVMH and Kering, two of the world’s largest luxury goods groups, reported extremely strong sales in the third quarter of 2020.
Left - Dior AW20 - Many luxury brands no longer have limits on how much people can buy
Considering many people aren’t even leaving the house, letting alone travelling, it was surprising to see that LVMH saw sales at its fashion and leather goods division rise 12 per cent to €5.9 billion. This was much higher than market expectations and saw standout performances from the Louis Vuitton and Dior houses. The LVMH results said Christian Dior “showed remarkable momentum.” while Louis Vuitton “continued to display exceptional momentum and creativity”.
Kering too reported better than expected results. Revenue in the third quarter totalled €3.72 billion, a fall of 4.3 per cent, but representing only a decline of 1.2 per cent in comparable terms. This represented a sharp rebound after second-quarter comparable sales had plunged by 43.7 per cent.
Kering’s main cash cow, Gucci, saw revenues rise sharply in the third quarter, compared with Q2, with revenue only down 12.1 per cent, whilst retail sales were down 4 per cent on a comparable basis. Gucci reported a 43.7 per cent rise in North America and a 10.6 per cent growth in Asia-Pacific. LVMH too saw strong spending and growth in Asia and the US.
What could be behind this huge recovery surge?
Luxury companies always had a good ‘problem' in the Chinese phenomenon of ‘Daigou’. Daigou or 'Surrogate Shopping' is a term used to describe the cross-border exporting in which an individual or a syndicated group of exporters outside China purchases commodities for customers in China. Often these are luxury goods from big-name designer houses. The main reason Diagou exists is because of the price differential in the Chinese market and buying abroad is often far cheaper even after the middle men take their cut. There is a huge amount of money to be made because of the volumes and value of the goods.
Many luxury companies tried to limit the amounts sold to Diagou so as to preserve their exclusivity and not flood the market. Rarity and scarcity naturally make things more desirable. But, it appears that some of the biggest fashion houses have opened the floodgates to these buyers and organisations, no longer limiting the amounts they can purchase. Having buyers queuing up and wanting to buy as much as you can give them looks like a temptation few brands could resist as they saw their sales fall off a cliff due to COVID 19.
At the end of 2018 it was announced that Kering was ending its joint venture with Yoox Net-a-Porter and taking charge of the e-commerce for its brands including Alexander McQueen, Saint Laurent, Balenciaga and Bottega Veneta. The partnership was slated for renewal in 2020, by which time Kering’s digital operation, which looked after Gucci separately, would have, hopefully, matured to an advanced level.
While many of the world’s busiest luxury streets have been quiet since the beginning of 2020, Kering has been using its stores to process online orders rather than its warehouse in Bologna, as it had done previously.
Right - Diagou sending Dior gifts to China?
These ‘distance sales’ are up 25 to 30 per cent throughout the group and, according to an unnamed source, they are now letting the Korean and Chinese Diagou traders buy everything they want.
“The fact that the traders are now allowed to get what they want definitely helps those brands. Even at Dior, they can buy without restrictions now.” they say.
“Some companies do it everywhere. Particularly Louis Vuitton. And Dior. For the Kering Group, before the confinement, they had vague procedures that were changing depending on what items were selling. For example, for whatever reasons, some stores were selling huge amounts of the same item (usually cheaper leather goods with a logo, like pouches). When that happened, some accounts were flagged by the directors. There is a system at Kering called ‘Luce’ where you can see who bought a particular item. Every time, a trader would come, the sales assistant had to check their purchase history.
"At one point, they also checked that the credit card they use matched their profile name. (Companies would send different people who would all use the same company card. That was flagged during audits). After the confinement, every company has relaxed the procedures. I know some traders and they told me that for instance, at Gucci or Moncler, there are no limits on items purchased.
“Even Dior doesn’t do limits of items anymore. Although I hear that Louis Vuitton and Goyard still check accounts. At Saint Laurent, there is a limit of 3 of the same item per transaction. (But they can come every day and buy 3 items - they couldn’t do that before). I understand it is happening everywhere. Also, brands like Dior have resumed doing export sales. But Saint Laurent still refuse export sales unless the client has a good reason (if there is no store in their country that carries what they want to buy). It used to be a huge market for the brands until about 2 years ago when they decided to stop it all ‘to protect the markets in Asia and the Middle East’ mostly.”
Export sales are by a foreign buyer asking for it to be shipped to their territory from a store overseas. The Korean and Chinese traders often buy closer to home in other Asian markets. The Koreans are now the biggest traders selling into China.
“When they used to call stores and ask for an export sale, they would be able to have the VAT off and the European price.” says the source.
Many Daigou are or work with sales staff, using their staff discount as an extra price differential. But, it is not really possible anymore at some brands, like YSL, because they've put a limit on staff purchases. However, the limits are not imposed throughout the Kering group and Gucci doesn’t have limits. I regularly see or hear of people buying the same products. The directors have started to flag it.” says the source.
“One would think the procedures would be the same throughout the group, but it varies drastically and depends on the CEO/ Director’s decision. There are so many odd decisions though. For instance, I heard that Gucci had cancelled the VIP discounts ... which doesn’t make a lot of sense.
There are limits in the stores but not online for Kering.... which is beyond stupid. Again, something that doesn’t make sense.
“At Kering, there is a separate online system called 'Sellsy' which is like ordering online, but through the store stock. The directors can check the accounts and stop some people from buying (if they suspect that it is for resale), but the traders can call the stores (if they cannot find items in the website) and use a different name. The credit card used cannot be checked by the stores.” says the source.
Left - Saint Laurent AW20
“Although they are starting to check the accounts again. I heard that one Korean trader got flagged and is not allowed to buy anymore. But I am sure he still does.... using various names. Some clients have more than a dozen profiles.... with same email but variations of their name. Quite surreal.” the source says.
Speaking to a Diagou reseller in China, via WeChat, they say they have direct cooperation with many of the brands, but nothing is ever ‘official’. Louis Vuitton is the best seller, followed by Dior, then Gucci. They say that COVID 19 has forced the luxury goods companies into this loose cooperation.
As for the end consumer, “Most of the clients don’t know anything about luxury. They just want to show off”. says the owner of the Diagou store on WeChat. “They don’t even have passports.”
Asked which products were most in demand at the moment and from which brands. “Every season is different. Which one is best depends how we promote.” they say.
Diagou buy and then export the goods themselves with their commission priced in. It will be interesting how the UK Tax Free shopping changes - Read more here - alters things for Daigou buying in the UK. But, then, the vast majority of reselling sales are made in more localised markets to China, hence the huge uplift in Asia.
What it does signify is the continued huge demand for named luxury goods. Which is a good sign for the industry overall.
Daigou has always been a game of cat and mouse for the brands. In one respect, this great demand is flattering for any brand, but they also want to be extremely protective of their image and how their goods are sold. COVID 19 was a massive jolt for any business and it’s understandable why many brands panicked and became more relaxed about knowingly selling to Daigou for resale into China. It could explain some of the huge bounce back in Q3 sales.
COVID created a vacuum and distorted the balance between buyer and seller. The luxury brands have turned the taps on for the Daigou market. Just don’t expect them to be on for too long.
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It doesn’t take a genius to note that now is not the ideal time to launch a new fashion business. If you are launching your new business, this season, you probably started way before this disaster of a virus appeared and it was too late not to see it through. Too much time and money has been invested to pull out. You’re not a quitter.
Left - In September, MATCHESFASHION launched its The Innovators Programme to help support young designers
It’s a bit like all those cranes on the skyline and builders finishing off their dense blocks of luxury flats. It’s too late to down tools, not finish them and get them on the market. But, fast forward six months and how many spades will still be in or breaking new ground?
There will a gaping hole of projects starting and the fashion business will have one of the largest.
The V shaped, bounce-back recession is ideal because it conserves this economic momentum and it just becomes a blip. Sadly, it’s not looking that way. There is still momentum in the market, but the longer Covid disrupts everything, momentum lessens, and the more time and energy it will take to get it all moving again. This will also make this gap even larger.
Fashion has a time lag. The time between starting and producing samples, to then show, get orders, make and then sell, and then get the revenues, is usually a long timeline. It’s a risk and nobody knows what the state of the market will be when you launch, even at the best of times. Today, many of those thinking about striking out alone and setting up their own thing will choose to put off starting well into next year when they can feel more confident about the economic landscape.
Without trade shows and fashion weeks - a vehicle to showcase to buyers - many stores and websites will reorder previous years’ product, with tweaks, from existing brands. This will only really start to show when SS21 hits the stores after Christmas and consumers will start to notice.
Fashion’s reason to be is newness, or the perception of newness, and a never ending supply of new brands and designers kept the whole industry feeling fresh and new, while established brands and giant luxury groups took most of the sales and profits.
Luxury multi-brand websites and department stores need newness to give vitality to its entire offer. It’s news, it’s buzz, it’s hype and they had it all without the financial risk. This veneer or gap needs to be filled and retailers and luxury groups are now realising that they will have to start supporting it or it won’t be there.
MATCHESFASHION has launched its year-long ‘The Innovators Programme’ designed to champion young design talent. It was built upon an existing womenswear project to include menswear and is a robust package of practical support including mentorship, preferential business terms and £1.8 million in marketing.
The programme was developed as the MATCHESFASHION team collaborated closely with designers during the Covid-19 pandemic. It became clear that many of the designers were unsure how their brands could thrive through 2020 and that practical support and ongoing commitment was required. The 12 designers are: Art School, Ahluwalia, Chopova Lowena, Stefan Cooke, Germanier, Halpern, Harris Reed, Charles Jeffrey LOVERBOY, Thebe Magugu, Ludovic de Saint Sernin, Bianca Saunders and Wales Bonner. Eleven of these designers were already partner brands and each designer was chosen "for having a unique and powerful DNA which is intrinsic".
“I am delighted that we have formalised our support for emerging talent, developing The Innovators into a programme that actually helps futureproof their businesses in what has been a tough year for the creative industry. I have worked with many of these designers for a long time and I am so happy that we are committing to their visionary collections in a practical, material way.” said Natalie Kingham, Buying Director at MATCHESFASHION. This group of designers will only contribute marginally to MATCHESFASHION’s group revenues, £372 million ended 31st January 2019, but they add far more to its brand as a destination for people who love fashion and a place to discover newness and the hottest design talent. This desire is insatiable and companies need this veneer of young designers and brands. A small financial outlay is worth the newness halo effect
In 2019, Liberty launched its ‘Liberty Discovers’ platform for up-and-coming talent. It supported designers by offering mentorship from the Liberty buying team and exposure opportunities via the brand’s communication platforms and access to Liberty’s two in-house product and fabric design studios, located within its Central London store.
Right - The LVMH Prize fund of €300,000 was split amongst the 8 2020 nominees
As for all the designer prizes, many decided to split the prize monies amongst the nominees due to the pandemic. The LVMH Prize finalists, Ahluwalia, Casablanca, Chopova Lowena, Nicholas Daley, Peter Do, Sindiso Khumalo, Supriya Lele and Tomo Koizumi all shared the €300,000 prize money equally. LVMH also pledged to support previous winners of the prize with a new fund, an undisclosed amount, and the six previous winners of the LVMH Karl Lagerfeld Prize.
In America, the CFDA/Vogue Fashion Fund was renamed ‘A Common Thread’. A Common Thread has raised over $5 million of which over $2.13 million was granted to 44 businesses in the first round of funding, $2.015 million granted to 37 businesses in the second round of funding and $500,000 granted to 47 NYC-based manufacturing businesses in the third round of funding for a total of 128 recipients across the three rounds.
Fashion’s tight production timetable and traditional cashflow model makes it very difficult for small designers and brands to survive. While the giant brands and retailers want to dominate, they also want a veneer of choice and newness. Expect to see many more funds, support and ‘prizes’ to appear from the large luxury groups and retailers.
Buy TheChicGeek's new book FashionWankers - HERE
Money greases the wheels of our consumerist society. Without this continual flow of finance the economy contracts and many people lose their livelihoods, especially in retail.
It is completely natural, and prudent, to want to save in periods of uncertainty. Talk of entering the worst recession for over 300 years would make even the most optimistic of people think twice about a big purchase or being frivolous with their cash.
COVID 19 has been a tale of two working economies; those, generally, white collar workers working from home, whose wages weren’t affected, saving money on travel and lunches, and those reliant on these workers being made redundant or having their hours reduced. Many workers on furlough have been in an economic form of limbo, and while they have not seen most of their income disappear, this is quickly coming to an end and some will be made redundant. Many of these jobs will not be deemed ‘viable’ in the short term.
Left - Results of website loveMONEY poll
A small poll by the website loveMONEY, in June, found readers say their finances have actually improved under lockdown. A remarkable 23% said they were significantly better off, while the biggest amount, 36%, said things had improved slightly.
At the other end of the scale, 13%, more than one in eight, reported that their finances had been hammered since the lockdown came into effect, while a similar percentage (14%) said they were slightly worse off. Finally, 14% of respondents said their bank balance looked largely the same at the end of each month.
The vast majority of people spent less during lockdown because they had less things to spend money on and most not leaving the house.
According to a study by AA Financial Services, 85% of UK adults spent less during lockdown. The average Brit saved (per month) £49 a month on petrol, £57 by not going to pubs or restaurants, £53 by not going to shops, and significant savings in other areas, totalling £617 a month on average for those still receiving their full income.
The report also found that 31% of people with savings accounts had increased their monthly deposits since the start of lockdown. This was confirmed by Bank of England data, which found that personal bank deposits had grown by three times the recent average. The Bank revealed that consumer debt was down by £7.4 billion, to just half the level seen in February. Those who are benefiting from excess income are in many cases using their spare money to pay down debts, while choosing not to take out new loans due to increased uncertainty.
According to Aviva, women seem to have been affected more strongly with 38% of women vs 29% of men saying they have less money to spare at the end of the month than they did pre-lockdown. This could be due to the types of jobs women do, like part time and in customer-facing roles.
Young adults have also been hit hard. Almost a third of 25- to 34-year-olds (32%) are concerned about their ability to save. This age group is also the most worried about losing their job due the impact of COVID-19 (28%).
Aviva Head of Savings and Retirement Alistair McQueen says: “Female savers look to have been disproportionately affected during the lockdown, as workers in sectors like hospitality and retail are more likely to be younger females. Younger people across the board also face a significant challenge. Those under 34 typically struggle to save under normal circumstances, but the current conditions have exacerbated this. For example, this age group typically spends a greater proportion of their budget on housing, and bills, which remains unchanged.”
In August, there was a big government push to get white collar workers back to the office. Then a recent u-turn, telling people to work from home again with positive COVID 19 cases rising. Many commuters don’t want to go back to that lifestyle and it’s easy to understand why.
DJ Sinfield @BigSino on Twitter said, “I am WORKING from home. I am saving £500+ a month and getting an extra 3 hours a day family time. This money and time is being spent at farm shops, local butchers etc and not Southeastern Trains. Why would I want to go back to commuting? Why?”
John Bye @_johnbye said, “The fact is many of us have enjoyed working from home, and companies have realised they're wasting money on big offices they don't really need. I save £300 a month and 2.5 hours a day by not commuting. Why would I want to go back to a London office full time?” and Paul Chapman @Paul_C-Chapman said, “I am saving around £30/day on rail fares and food, I have 3 hours/day of my life back, I have a much better work/life balance and my health is better. Why on earth would I want to go back to daily commuting?”
With interest rates dropping like a stone for savings, for example, the government backed NS&I just reduced its ‘Income Bond’ from a paltry 1.16% to an almost zero 0.01%, the incentive to save has been reduced. What we need is people to spend our way into a U shaped recovery. We need the people, on the positive side of the COVID recession, with this additional monthly money, to spend it.
This is a call to arms for work-from-homers to spend. It’s not about people spend their savings, it is also not about people spending more money than they would usually, it’s about those with this worker windfall - what they would have otherwise have spent on lunch and travel etc.- to inject that into the economy. It’s tempting to save it, but it’s money they wouldn’t have had on a monthly basis.
Put it into retail and services worth supporting, and retailers and brands they don’t want to see disappear and are rewarded with their custom. This isn’t about lazily rewarding shops or travel companies that aren’t very good or really are past their peak, it’s about supporting new or established businesses which resonate with you and make or provide great services or products.
It could be ethical or green products or services. It could be new business, crowd funding and start-ups. Look at it like an investment in the future you want to see. It’s time to put this bonus money to good use.
Buy TheChicGeek's new book FashionWankers - HERE
September is fashion’s month. Once bulging fashion magazine issues - remember those?! - the start of fashion’s most important selling season, and, of course, fashion weeks makes September the most important month of the year for the, estimated, global $1.5 trillion fashion industry.
Above - Louis Vuitton's COVID LV Shield hitting stores in October
Fashion week is the canary in the mine and the biggest to suffer from the pandemic. Events which combine travel and vast numbers of people aren’t going to work right now, and, therefore, puts the traditional idea of fashion weeks into a strange predicament. While many fashion councils are trying to push ‘business as usual’, it is far from it.
New York has started, but few would have realised. Designers sitting out New York Fashion Week, this season, include Marc Jacobs - its biggest draw - plus Ralph Lauren, The Row, Pyer Moss, Michael Kors, Telfar, Oscar de la Renta and Brandon Maxwell. Those still taking part can have a socially distanced crowd of just 30 people, while, before, traditional shows ranged into the multiple of 100s. London's fashion week runs from 17th September - Tuesday 22nd September 2020 with the same strict controls.
Fashion weeks is the fashion business in an event and drives focus and attention from outside its bubble to retail and the idea of purchasing something ‘new’ to consumers. They are also extremely old fashioned and had less and less relevance way before COVID 19.
While the majority of fashion shows are pointless, a few images, brands, designers will emerge that stick and steer the fashion industry into that direction for the next six months. It’s also a coming together of people and a temperature test of the industry. But, they have become bloated and drawn out exercises in wasting time and money when fashion can no longer afford either. Limos driving groups of pampered people all over town for 10 mins feels dated and indulgent.
The major of women’s fashion weeks - New York, London, Milan & Paris - managed to scrape through COVID in February and March at the beginning of the year. This will be the first test of how major fashion weeks will run with a global pandemic hanging over it. Some brands, like Louis Vuitton and YSL, have done separate shows over the past few months, but nothing like previous years.
Left - LFW's Digital Schedule home page
This season, the London Fashion Week the schedule has been split into three sections and includes brands showing digitally, physically or both - ‘phygital’. The gender neutral showcase will run from Thursday 17th to Tuesday 22nd September 2020 and include both digital activations on www.londonfashionweek.co.uk and physical events, adhering to government guidelines on social distancing. The schedule will host over 80 designers including 40 womenswear, 15 menswear, 20 menswear & womenswear and 5 accessories brands. There will be a total of 50 digital only activations, 21 physical and digital, 7 physical only and 3 designers who will activate through a physical evening event only.
The LFW digital platform, launched in June for the men’s calendar, will continue to serve as the Official Digital Hub and will be freely accessible to everyone, industry professionals and global fashion consumers alike. The British Fashion Council says. “LFW is one of the few international events to still be going ahead in London, proving the industry’s resilience, creativity, and innovation in difficult times. Now more than ever, the BFC acknowledges the necessity to look at the future of LFW and the opportunity to drive change, collaborate and innovate in ways that will establish long-term benefits, develop new sustainable business models and boost the industry’s economic and social power. The British Fashion Industry faces enormous challenges due to the impact of COVID-19 and the BFC keeps on calling on Government to support a sector which in 2019 contributed £35 billion to the UK economy and employs over 890,000 people (Oxford Economics, 2020).”
Having a traditional ‘schedule’ for barely 28 shows seems old fashioned. As fashion blogger @bryanboy tweeted to his 502.4K Twitter followers regarding NYFW, this week, “It’s really annoying how designers still get an individual time slot for what essentially is a release for a pre-taped short film. No one cares!! Just do a date and release it on the morning or afternoon of that day and it doesn’t matter if it overlaps with other designers”.
Right - Burberry Horseferry check face mask coming soon
It’s the equivalent of waiting in all day for an e-mail. Nobody has time for this, especially when it feels like most of this stuff won’t be ordered or bought anyway. Maybe just have a single release date, hub for content and publicise that?
The most anticipated London show is Burberry’s. Rumoured to be Riccardo Tisci’s last, it will be held outdoors. Burberry will use Twitch’s ‘Squad Stream' function, which allows users to view multiple perspectives of the show at a time and chat with fellow viewers using the service’s chat window. It will be live-streamed without an audience.
LFW designer Emilio De La Morena is presenting an exhibition rather than a traditional catwalk show. Called ‘Troubles SS’21’, it is an assimilation of fashion, film, and sculpture into a “consolidation of the designers professional and personal journey in conjunction to the global pandemic”.
Fashion’s optimistic hope has been that this pandemic will blow over and we’ll get back to the normal fashion week circus asap. Fashion weeks work in the future and were hoping that by the time the 2021 collections come out this will all feel like a bad dream, but, it’s also realistic to think otherwise. Fashion is fickle, when the pandemic is over any product will instantly feel dated and obsolete. It is difficult to know how much time and money to invest in it.
Adar Poonawalla, CEO of the world’s largest vaccine manufacturer, saying that not enough COVID-19 vaccines will be available to inoculate the global population until at least the end of 2024. According to Poonawalla, pharmaceutical companies are not increasing production capacity quickly enough to vaccinate everyone faster. “It’s going to take four to five years until everyone gets the vaccine on this planet,” Adar Poonawalla, chief executive of the Serum Institute of India, said.
Some brands are incorporating PPE protection into their collections. Louis Vuitton has designed a coronavirus face shield which can also be flipped up and used as a sun visor. The LV Shield will be available to purchase from 30th October 2020 in selected Louis Vuitton stores worldwide for around £700. Burberry face masks are coming soon on the brand’s website, strange they haven't released these faster, and are donating 20% from the selling price of each face mask to the Burberry Foundation COVID-19 Community Fund operated by The Burberry Foundation to support communities impacted by the pandemic globally.
Fashion weeks as an idea is still important, it just needs to reinvent itself for life post-pandemic. Mega brands can still blow millions on a pointless extravaganza, but for smaller designers and brands it can be their slim opportunity to be scouted and brought to attention. It also reaffirms the importance of seeing, feeling and experiencing fashion, but with many influencers shunning fashion week and with the amount of traditional magazine press dwindling, who is it for exactly?
We do need to see. Digital is all a bit unreal. We may as well be dressing avatars. You also have a better memory of items in real, it’s the equivalent of a school trip, they’re fully rounded and you can picture yourself wearing it. But, is it that worth £100,000s to brands? Fashion week is a preview and is also important for brands to know what to make and order. We’ve tried ‘See now, buy now’ and now’s the time for digital presentations. Is the future for fashion weeks somewhere in-between? Or does that just take us back to square one?!
Buy TheChicGeek's new book FashionWankers - HERE
Has the fear truly gone when there is nothing to miss out on? The anxiety inducing reason to exist for FOMO, or the fear of missing out, disappeared thanks to COVID 19. Poof!
In lockdown, nobody was doing anything, going anyway or seeing anything that you need worry yourself about missing out on. What a relief! *exhales* It was a great leveller.
Fashion has been one of the main pushers of FOMO. Hinged on social media, the fulcrum was this idea that everybody was having a better time than you and you needed all this stuff to go with it. The positive side of it suited marketers.
FOMO was the reason you often left the house, the reason you justified needing something that you really didn’t and then pushing the continued momentum on of FOMOing others through your social media channels. LOOK AT ME...
COVID 19 has been one giant reset button, and while people will document their lives, which inevitably will induce some type of FOMO, it won’t have the intensity or the choreography as before. The obsessions with far flung places and life filters was waning anyway. Influencers all looked the same and seemed to do the same things. “I shop therefore I am” became very different when all you were allowed to buy was food and medicine.
I don’t buy into this idea that the world will be radically different. The world is elastic and will spring back into some shape that was recognisable from before. What has changed drastically is the economy. This will be the catalyst. A great recession that will take years to get over and, when out the other side, things will look different. It will be crass to be too show-offish, too material, too extravagant, too pricey - will we see designer logos minimised? - in lean times. It will bookend the 21st century’s teen decade and be a full stop to the look-what-I’ve-got culture which dominated much of the past decade.
It’s the art equivalent of installing escalators into museums and turning them into shopping centres. It was such a visual decade with nothing to be repeated. Disposable. The luxury brands will morph, like they always do, and ones who can repackage this new environment will profit, again, like always. This isn’t wishful thinking, like less pollution and people thinking greener about what they buy, it is a reaction to an action, which, when many people will be unemployed or struggling to make ends meet, FOMO is the last thing they'll need in their lives. This digital window will look dated and tease-like to many. It will be a turnoff.
FOMO is often seen as a fun positive, like seeing what your friends are doing etc., humans are naturally nosy, and used in advertising as a trendy term, but it’s a fine line and this anxiety, "a desire to stay continually connected with what others are doing”, - defined by Wikipedia - can spiral into pressure and a feeling of inadequacy. It was fast and people’s lives have slowed. Money was often the cause of things speeding up. People have appreciated more time and witnessed the little things in nature during these past few months like they’ve never had time to do in recent memory.
Life was a reason to generate ‘content’ before and this content overload just kept getting more demanding. Images can go back to being memories and records rather than a competitive hustle. We had JOMO, joy of missing out, before, as a reaction to FOMO, but I think we’ll be happy sitting somewhere between the two.
Let’s face it - pun intended - nobody wants to wear a face mask, but, we now have to when we are in enclosed spaces. So, how can do something simple to make it a more pleasurable experience? How about rolling on some of your favourite essential oils every time you wear or wash it?
Small enough to pop into your pocket, simply roll on your chosen oil and inhale the aroma. You'll love it. Here are TheChicGeek's five to try:
Right - I’m seeing these everywhere: adidas' face masks are proving popular. Adidas - FACE COVERS M/L 3-PACK - £14.95
Grown on London’s southern green belt, nothing is as relaxing and intoxicating as classic lavender. Support local business while chilling you the fuck out.
The Give Me Strength
Anatomé specialises in essential oils, and their black pepper and may chang 'Energy + Strength' is said to energise and support the nerves and mind to motivate and boost low energy levels. We could all do with some of that while running around Tesco.
The Ready To Roll
The invigorating blend of rosemary, lavender, geranium and grapefruit will revitalise your spirits and energise your body and mind.
The Ginger Ninja
Aesop’s ‘Ginger Flight Therapy’ is tailored for turbulent flights, but works just as well for those of us not going anywhere anytime soon. Contains essential oils, including ginger root, lavender and geranium to reduce stress and also calms upset stomachs.
Lift your spirits with a bright fusion of zesty orange, floral rose. geranium and warming nutmeg essential oils. Made in England.
How redundant is the handbag if you don’t leave the house? Same goes for shoes. This sounds like a surrealist-type manifesto of some ancient and useless items of dress or culture, yet perfectly sums up how quickly something can go from essential to unused. Fashion has always had a intertwined relationship with ‘want’ and ‘need’, they coexist; one propels the other, and, the other way around, it justifies it.
We’ve suddenly lost a lot of the need and therefore the want has waned. For many, clothing is a need only option and, apart from a new pair of joggers or PJs, all those prom outfits, wedding outfits, birthday outfits and all the other fashion treats that keeps the wheels of fashion turning have lost all momentum and become a missed sale.
The latest figures from the IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers, saw online retail sales growth was down -2.2% year-on-year in the first week of the Government’s lockdown guidance, but the clothing sector saw growth plummeting -26.7% year-on-year, and -22% week-on-week. Those result were even more stark across footwear, with growth tumbling -38.2% year-on-year, and -22.9% week-on-week.
Online sales too will grind to a halt with some large retailers closing their websites.
But, there has been an online boom, it's just that it doesn't include fashion. Adobe Analytics analysed data from trillions of visits to retail websites and from millions of product SKUs, finding that online grocery purchases are leading the eCommerce boom. Among the most popular items in people's internet shopping carts: Health products, gym equipment, toilet paper and canned foods. Online orders for fitness equipment like kettlebells, dumbbells and treadmills a saw 55% boost.
People too have begun spending money on board games, puzzles and video games. Notebooks are flying off the shelves and Mike Norris, chief exec at Computacenter - one of Europe's largest resellers said he has been signing "500, 1,000 or 2,000 laptop deals" with business customers that are equipping employees for remote working. He noted similar spikes in sales of monitors, virtual private network services and wireless LANs.
Fashion may not be fully redundant, just yet, temporarily and creatively furloughed, you could say, but with so many things cancelled in the future, even months after lockdown finishes, fingers crossed, those occasion spending needs will take even longer to turn into wants.
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Recently, a government advisor, Professor Neil Ferguson, director of the modelling programme at Imperial College London's MRC centre for global infectious disease analysis, estimated that up to two thirds of people who die from coronavirus in the next nine months are likely to have died this year from other causes. He said that many of those deaths were likely to be old and seriously ill people who would have died from other conditions before the end of the year. What COVID-19 is doing, sadly, is speeding up the end of life and it’s the same for brands and retailers.
Some retailers have started to fall into administration, pointing the finger of blame at the COVID-19 coronavirus. The majority of these brands and retailers were sickly patients to start with. Brands like Beales, Laura Ashley, Carluccio's and BrightHouse were on wobbly ground way before this devastating virus was on the horizon. The coronavirus has just cut short the inevitable. Bournemouth based department store Beales closed earlier than scheduled and left unsecured creditors £17.6m out of pocket.
Left - The Beales flagship store in Bournemouth
Other patients at risk are brands like shopping centre group Intu, struggling under a £4.5bn debt mountain, and who failed to secure new funding before the crisis hit. They’ve also been hit by stores holding back their rent payments recently. Frasers, owner of Jack Wills, has been cutting off vast limbs of its retail network to save their critically ill patient, Cath Kidston is looking for a buyer to save the business and up to 800 jobs and New Look has requested a three-month rent holiday from landlords. H&M has threatened landlords with walking away from 300-plus store leases if sales fail to match pre-coronavirus levels once the pandemic passes. How others like Debenhams and the Arcadia come out of this pandemic is anybody’s guess.
Right - Laura Ashley has fallen into administration
The patient metaphor has one big and important point; the third of previously healthy people who could potentially die. This is where the government efforts to help businesses should be focussed. Those businesses who were previously healthy, but, due to unforeseen circumstances, have been thrown into jeopardy should be given the largest help. Whether it’s down to the sector they are in or the way they sell, these previously healthy retailers should be given the ventilator of loans and payment holidays to give them life.
The longer this crisis goes on the larger that third will become. It is survival of the ones who were the fittest going into all of this.
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Between the ‘loungewear’ emails and the ‘we-give-a-shit-please-buy-something’ emails, some brands have been hoping to offset some of the losses of physical retail with online. Online has the potential to be many brands’ life support machines; keeping some form of cash flow ticking over and the lights on.
Left - Net-a-Porter has closed its American website & warehouse
Dixons Carphone has said sales surged by more than 70% as Britons rushed to buy laptops, games consoles and freezers to cope with the coronavirus outbreak. Online sales in the UK and Ireland surged 72% in the three weeks to 21 March.
“There will be some recovery through online operations but overall the loss of sales will adversely impact our full-year profitability and cash position,” it said. The group said as a result it would still miss out on about £400m of sales between now and the end of its financial year in April.
Fashion has a lot less ‘need’ and as such will be harder hit. Fashion brands have huge amounts of stock sitting in stores, not going anywhere anytime soon. These shops have now become in-town warehouses, but they still need manning and this has become a problem for some brands. Many consumers seem to think that online and offline is separated, robotically picked and magically appears on their doorstep.
The family owned department store chain, Fenwicks said in a statement: "Our people, both employees and customers alike, are at the heart of our business... Therefore, we have taken the decision to temporarily close our website as well as our stores, to ensure the safety of our teams and customers.” Fenwicks only went online in 2017 and pick the items from in-store stock.
Schuh, the footwear retailer, too has closed its website. Chief executive Colin Temple said: “At this point in time, the UK government guidelines include that online retail should ‘still open’ and ‘is encouraged’ along with advice that if staff cannot reasonably work from home, they should continue to go into work.
“However, with the Schuh head office and DC operations based in Scotland and Scottish Government advice conflicting with UK government advice, Schuh management have made the decision to close their website, in addition to their stores that already closed from the evening of Sunday 22 March.”
He added: “A number of DC staff continue to indicate that they want to work within the warehouse to support the Schuh online business, along with other departmental employees offering their support also. However, Schuh management have confirmed that the website and stores will remain closed until there is updated UK and Scottish government advice.”
No doubt demand has fallen overall with many people tightening their expenditure and only buying what they need. But, what about the exclusively online retailers? Most surprising is Net-a-Porter/Mr Porter has closed its American business. Customers visiting the US site are now met with a message that reads: “In line with local government guidelines, and for the health and safety of our community, we have temporarily closed our warehouse. We hope you are all staying safe and look forward to welcoming you back soon.”
This is a nightmare for fashion brands selling products with a shelf life. The discounts have already started, and they’re big, Liberty of London went straight in with 50% off. Some retailers are doing okay at online, but even the best figures won’t replace physical retail, representing a 20/80 split between online and offline. To shift all this stock they will need to discount heavy, eating into profit margins, and consumers, used to a never-ending supply of ‘Just In’ will have to adjust to a new shopping landscape with less choice.
Update - Next, River Island & Moss Bros have announced their websites will close.
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There will be life after COVID 19, but it’s guesswork to how much and how quickly it resumes to pre-virus levels. American designer, Tom Ford, told WWD today, “In China, for example, with our cosmetics, we’ve completely recovered. We’re back to 100 percent. And our ready-to-wear and accessories, which was down about 95 percent, it’s now back up to 50 percent.”
That is in just over a month. The Chinese saw a spike in infections on 12th February.
Tom Ford has just 4 own brand stores in China. His beauty brand, in partnership with Estée Lauder, will be available more widely. Tom Ford Beauty was projected to turn over $1 billion in global sales by 2020.
Admittedly, the person who can afford Tom Ford might be slightly more immune to a downturn than others, but it’s more the attitude and feel good factored needed to buy an expensive handbag that is interesting here. It’s a strong bounce back and one many other luxury brands will be looking and hoping for.
Tom Ford, while a big name, is relatively mid-sized in terms of luxury with very select (limited) distribution. The brand generates an estimated $500 million in yearly revenues for its men's and women's ready-to-wear and accessorises. But, he will be sat alongside, in retail terms, the best of the world’s brands and designers, so it shows the Chinese shopper is back out.
Italy, the worst-affected country in Europe, is starting to see the number of new cases of Coronavirus cases start to fall. The peak in the country was four days ago, on March 21, when 6,557 new cases of the virus were reported. Two days later the number was down to 4,789 and, although yesterday the number increased again to 5,249, that is still 20% below the peak.
A week after South Korea hit its peak, which was much lower than major European countries at just 851 cases on March 3, the number of new recorded cases had dropped by 87%.
In Germany, the peak number of new cases was on March 21 at 4,528 cases. Yesterday, 24th March, the number of new cases was down to 3,935, a drop of 17%.
While we have to take Chinese virus numbers with a pinch of salt, it might not be as bad as we think for the fashion business after all. A strong domestic consumer bounceback will be the catalyst the fashion industry needs.
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