When the US was reeling from the burst of the dot-com bubble in 2001, Leonard Lauder of Estée Lauder noticed an 11 percent increase in lipstick sales. He coined it the Lipstick Index, an indicator of how, in times of economic crisis, women buy things that make them feel good.
But the same is not true for fashion. The theory goes that the stock market dictates whether hemlines will rise or fall, yet the relationship between fashion and the economy is pretty straightforward: people buy fewer indulgences and frivolities when there is less cash to spend. Fashion can be a barometer for practicality and mood, the way sales for lower-height heels surged in the days following 9/11 in New York; in the event of an emergency, people were seeking shoes that wouldn’t impede their ability to run away.
Now, as governments all over the world padlock shopping malls and urge citizens to stay home, this season’s collections are gathering dust on racks, mannequins, and showrooms. Clothes are, apparently, non-essential—the ones you would have worn to the office, dinners, and nights out, at least. Hopefully, you’re still dressing presentably from the waist-up for those Zoom meetings.
Worse than the recession
While e-commerce enjoys an increase in ordering necessities online, the fashion sector is not benefiting significantly, despite some brands resorting to sales, free shipping, or extended grace periods for returns and refunds. Projections from the Boston Consulting Group (BCG) see revenue in the fashion and luxury sector falling between 25 to 35 percent this year, with a total sales loss of around USD 450 billion to USD 650 billion compared to 2019. These numbers are worse than the impact from recessions past, including the global financial crisis of ’08, with prolonged store closures in the name of public health and safety—something that had not occurred in previous crises—greatly reducing income from brick and mortar retail.
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Consumer confidence is also unlikely to rebound soon, with the BCG survey showing that, while people in the UK, US, Italy, and France are more likely to invest in savings, preventative health care, and fresh, organic food, more than 20 percent of respondents plan to spend less on travel, outerwear, and luxury purchases. This also reflects attitudes in the Philippines: a NEDA survey found that 70 percent of Filipinos are unwilling to spend on travel or durable goods in the next year, even after the lifting of the Enhanced Community Quarantine.
The effects of COVID-19 have already seen lasting change in that most venerable of luxury institutions, the watch industry. After the cancellation of Baselworld 2020 last April, Rolex, Patek Philippe, Chanel, Chopard, and Tudor announced they were withdrawing participation from Baselworld 2021, and would be partnering with Fondation de la Haute Horlogerie to mount their own event in Geneva next year. Reports suggest that disputes over whether or not this year’s exhibitors would be granted refunds and the following year’s show dates being moved to an earlier January schedule were to blame. But the departure of five major watch brands from the century-old trade show may be a preview of shake-ups in the decade to come.
Heeding the call
With stores closed and disruptions to manufacturing, the resourceful and enterprising minds of the fashion world turned their attention toward what they could do to help.
Within a week of the declaration of the Luzon-wide ECQ, designer Mich Dulce issued a callout on Facebook for materials and volunteers to reproduce personal protective suits for healthcare workers, spearheading a project that has since become the Manila Protective Gear Sewing Club. Another group of 10 designers, including Jot Losa, Debbie Co, and Rosenthal Tee, banded together to form Fashion for Frontliners, which has delivered 7,000 PPEs to 47 hospitals as of late April.
Global retail powerhouses have gotten in on the act, too. Swedish high street brand H&M is repurposing their supply chain to produce PPEs, and its H&M Foundation has donated USD 500,000 to the COVID-19 Solidarity Response Fund. “The donation supports the World Health Organization’s immediate global efforts to track and understand the spread of the virus to ensure patients get the care they need, frontline workers get essential supplies and information, and efforts to develop vaccines, tests, and treatments are accelerated,” says Dan Mejia, head of communications and press for H&M Philippines.
Before the pandemic, H&M was preparing for a different kind of Summer 2020. Mejia shares that under normal circumstances, these past months would have seen the launch of the Conscious Exclusive Collection and their vibrant and energetic summer campaigns. One of the brand’s strengths is prime fashion real estate, occupying multi-level floor space in heavy foot traffic locations at shopping malls and centers of commerce. Thus, they, too, are feeling the effects of the shuttering of retail meccas worldwide.
“Due to the ongoing COVID-19 situation and instructions from our local and national governments, all our stores were closed and with that, our business continues to shrink. The same goes for other businesses that are not offering essentials,” he notes. “Clothes, even if they are considered a basic need, are not on everyone’s priority list. With stores closed during this time and all of us working from home, what we are focused on is staying on top of the situation to ensure the safety and welfare of our colleagues and to anticipate and plan how we will move forward once the quarantine situation eases.”
The sensory and the tactile
But what about niche brands that rely on the sensory and the tactile—seeing and choosing the fabric, running your hands through racks of clothes, getting a bespoke, custom fit, and forming a community of like-minded people with an affinity for pieces that are one of a kind?
Jake Antig, co-founder of Leon Denim, the only brand that produces raw, selvedge denim jeans in the country, acknowledges that the shopping experience is integral to their DNA. “Touching the product, putting it on, interacting with the owners and partners is part of the draw,” he says. “We normally have people visit the Salcedo Village studio and hang with us every Saturday afternoon, but we’ve suspended that to comply with quarantine guidelines.”
This underscores the function of fashion as a shared experience, an insiders’ community. It’s the reason why the sapeurs of Africa meet regularly to show off their three-piece suits, sneakerheads flock to talk kicks at conventions, and streetwear aficionados think nothing of standing in line for hours to be the first to get their hands-on fresh drops. For now, Leon Denim’s cult following has shifted toward keeping in touch online, but it’s simply not the same. “We still engage via our Facebook and Instagram accounts, but there’s really not much selling since the start of the ECQ. People also have a wait-and-see attitude right now and are keeping their cash, so sales have been slow,” says Antig. “People are ‘reserving’ items that they plan to get once we emerge from this quarantine. There’s been a few purchases, both local and abroad, but due to unpredictability of shipping services, deliveries are delayed, on hold, or sent via Grab or Lalamove.”
“Touching the product, putting it on, interacting with the owners and partners is part of the draw,” he says," says Jake Antig of Leon Denim.
The moratorium on public transport has also made it impossible for workers to report to their Cavite workshop. “We’ve come up with creative schemes to keep them paid, even though production is on hold at the moment. We’ve discussed some options to reduce the challenges by allowing our workers to stay in at the workshop for a week, maybe two. We’ll probably arrange secure transportation as well.”
Yet their status as a small, independent player also offers its advantages. “Our rent, payroll, and overhead are quite low. Manufacturing and R&D have been put on pause, so our new releases are on hold until further notice. Yes, we are hit hard. But because we are a lean outfit with low overhead, we feel we are in a good position to weather this storm. The earlier the ECQ is relaxed, the better for us.”
The next must-have accessory
Mejia of H&M believes that the survival of a brand, post-COVID-19, will rest on two things: digitalization and sustainability. “With fear still present in all of us, we expect lower footfall and people deciding to stay home, resulting in more online traffic and opportunities. This situation will train and force those who prefer physical shopping to go online, so that will not only make them shop online during the next two years, but condition them to shop more online permanently.”
Brands who do not currently have a strong e-commerce platform will need to adapt, finding a system that works for them and anticipating their market’s needs. “There is an expectation that the majority of business will be via online channels, so we need to create a buying experience that is as frictionless as possible,” says Antig. “We also need to assume that customers will order two to three sizes to fit at home, and just keep the items that fit. This is additional cost and time, so we need to factor this into the price.”
There will also be heightened sanitation measures to ensure customers’ safety; Antig foresees that in the near future, masks and sanitizers will be store fixtures, the studio will limit itself to entertaining customers exclusively by appointment, and they may invest in a UV light machine to disinfect merchandise. He would also welcome government initiatives to assist small businesses through these challenging times: “Access to attractive business recovery packages and maybe rent relief for a few months, once this lockdown eases,” he suggests. “We’re updating our business plan and taking input from other retailers and brands. It’s going to be a long six months.”
Mejia believes this crisis will prompt consumers to be more thoughtful about purchases and gravitate toward brands that reflect those values. “With millions of people in the US and around the world losing their jobs, we can expect a global recession, and this recession will push us toward a behavioral change. This will make us care more about anything we spend on and lead to more people starting to think about what brand or product to go for. We are humbled about the fact that sustainability has always been at the core of H&M’s business, ensuring the long-term growth of our company while making sure that we protect both the people and our planet. We will continue to lead and drive circularity, inclusion, and transparency in our business for a more sustainable fashion industry.”
For now, the fashion-forward set is finding ways to dress up the latest must-have accessory: the face mask. Design collective Basic Movement just launched Masks for Masks, where proceeds from purchases of masks created by young designers will be used to donate N95 masks to frontliners. Choose from the utilitarian aesthetic of Proudrace, the avant-garde patchwork of Ha Mu, or Randolf’s playful prints featuring images of Karl Lagerfeld and Anna Wintour. Think of it as the next wave of Pandemic Chic.