It started quite innocently. The coronavirus forced Chinese designers, merchants, stylists and other representatives of the fashion industry to resign from participating in Milan Fashion Week autumn-winter 2020/2021. From 18 February to 24 February 2020, they were not part of an event overflowing with Italian chic. The Camera Nazionale della Moda Italiana (or National Chamber of Italian Fashion) launched the campaign “China, we are with you” at that time to show solidarity with the absent. The password turned out to be prophetic. At the end of the fashion week, Italy faced its coronavirus outbreak, and usually, the bustling streets of Milan were deserted. The models published their photos in masks, the employees of fashion magazines started to perform their duties from home, and Giorgio Armani organized a show of his collection autumn-winter 2020/2021 in an empty theatre.
No China, no move
The fashion industry has for years regarded China as a source of cheap production. The country is by far the world’s largest manufacturer of textiles and other items – from threads to buttons and zippers. Most fashion brands, especially those in the hast fashion segment, have their projects manufactured in China. It is still the most attractive market for clothes defrosting. It often happens that a given model is sewn in the only factory, usually one located in China.
Fashion brands became dependent because it was profitable. Now it turns out that this dependence is even disastrous. Employees in China are not allowed to leave their homes and, consequently, carry out orders in the sewing rooms. This causes delays in the production supply chain. This is particularly problematic in the fashion industry, where clothes are sold seasonally. The timeline from design to delivery of the finished product to the shop shelves does not allow for a large margin of error and postponement. If this happens – as is already happening before our very eyes – the fashion brand has to take great losses.
The consumer needs a different assortment
The fashion industry also faces major challenges from the other side of the production chain – consumer demand. Without a doubt, it is the luxury brand market that will be the first to suffer serious consequences due to coronavirus. What is important is that Chinese customers – who are considered to be some of the biggest fashion enthusiasts and reputable brands – have stopped traveling to do big shopping in fashion capital cities like New York and Paris. Consumers are now focusing on other values. What matters to them is health, not buying more goods, let alone luxury ones.
Global events in the fashion industry also concern Polish brands operating in this very specific and dynamic market. It is only a matter of time when consumers in Poland will start to notice more space on the hangers. Many – if not most – Polish brands have their products made for sewing rooms operating in China. The coronavirus has attacked at a time-critical for the fashion market – on the one hand, Fashion Weeks for the Fall/Winter 2020/2021 season, and on the other hand, closing the spring-summer 2020 collections and putting them on the shop shelves. Unfortunately, many of the projects are “stuck” at the production level in Chinese sewing rooms.
The situation is – not to use the word “dramatic” – problematic for brands operating on the Polish market. A large part of the clothes ordered around November/December 2019, which should be on sale any day now, did not reach the customer. The consumer focuses on purchasing basic products, forgetting for a moment about new trends and supplementing clothes with new things. This causes two contradictory states of affairs. Fashion brands do not have the most fashionable cuts desired by customers, and at the same time the level of their stock is increasing, because the consumer does not see the need to buy clothes (including those from sales).
Fight for survival and claims
While fashion brands that were in good shape before the coronavirus attack should not be afraid of an almost painful return to the market, those that have already struggled before can have a problem. A break in the product supply chain, the inability to typically offer items in shopping malls, or merciless consumers who will soon start noticing the lack of goods they need, will lead to some reshuffling in the fashion market.
It is important that fashion brands – as far as possible – do not remain passive for current events. Although coronavirus’s mastery of the world is an exceptional situation that no one could have foreseen, a strategy needs to be developed that will allow for a return to the game on the fashion market. Many legal institutions can help with this. One can mention, for example, renegotiation of the contract provisions (in the case of inability to operate in the leased service premises), the institution of exemption from benefits (in the case of a receivable that has become impossible to perform), or deferment of payment (in the case of delays in delivery of the ordered goods).
Fashion brands – after the coronavirus attack – are waiting for another absorbing challenge. Now, actors should take all possible measures to minimize the negative effects of the current situation and prepare for a great return.