The fashion industry’s escape from coronavirus

The fashion industry’s escape from coronavirus

Twice a year, the luxury fashion houses of the world present their ready-to-wear clothing for the coming season. This creates an international travelling circuit of retailers and reporters, high-net-worth clients and Instagram influencers, executives and a small army of public-relations professionals, many travelling from New York to London to Milan and finally to Paris.

This year, upon their arrival in Milan in mid-February, intersected with an outbreak of COVID-19. Italy then became the country worst hit by the illness outside Asia. And so, a thousand industry insiders wondered for a few weeks: would they become a global public health menace – a vector of transmission from the elite front rows of fashion shows to the world at large?

The final leg of this month-long tour arrived for a week in Paris starting in late February. On the first day of shows, the number of reported cases of coronavirus in France was just 14; by the last day, there were more than 200, and the country had banned gatherings of more than 5,000 people in confined spaces. Many attendees were sleep-deprived and already sneezing from the mammoth ‘all-hours’ work policy, having burnt the candle at both ends on the road. Design houses were handing out face masks before their shows. Several highprofile US buyers and magazine editors, decided to leave Paris early; some didn’t come at all. By midweek, many American teams had begun strategising with their employers in New York about their returns to the United States. Would they need to self-quarantine – work from home – and for how long?

At Lacoste, the penultimate show of Paris Fashion Week, roughly 20 to 30 per cent of media guests had cancelled.

What remained uncontained however were the rumours. The Miu Miu show was going to be cancelled, people said. (It was not, and was held spectacularly as scheduled, however Miuccia Prada, the designer, chose not to host her usual post-show meet and greet.) With some transport in Italy grounded, Louis Vuitton was rumored to have used the personal jet of Bernard Arnault, the head of the parent company, LVMH Moët Hennessy Louis Vuitton, and the third richest man in the world, to transport its handbags from coronavirus-infected Italy to less infected France. “I wish I had invented that!” said Michael Burke, the Louis Vuitton chief executive, when asked about the rumor.

At the Vuitton show, the setting was eerie. The museum’s staff had walked out amid concerns about the spread of coronavirus, effectively closing the French monument for three days until they reopened.

Sidney Toledano, the chief executive of LVMH Fashion Group, shared squeezes of hand sanitizer from his pocket-size bottle with Jonathan Newhouse, the chairman of Condé Nast, and both of their wives.

The crisis has accelerated a question hanging over fashion in recent years. Runway shows are expensive, laborious and environmentally harmful. Are they still worth absorbing an entire month?

Before the Alexander McQueen show in Paris on Monday night, François-Henri Pinault, the chief executive of the luxury conglomerate Kering – owner of Gucci, Saint Laurent and Balenciaga – wondered whether the industry should begin digitising showrooms and considering a new system. (Throughout fashion week Pinault joked, or half-joked, that he had been taking his temperature twice a day to monitor for fever, a symptom of coronavirus.) Anna Wintour, the artistic director of Condé Nast and editor of Vogue, said she had also been thinking about the future. “At a time of crisis, we have to think about a radical reset,” she said.

Rakuten Fashion Week, scheduled to begin on March 16 in Tokyo, was cancelled. (Japan has, at this time, only slightly more cases than France.) Subsequent fashion weeks in Shanghai and Beijing have been postponed. Ralph Lauren, who planned a runway show in April in New York, has cancelled his show. Burberry has postponed an April show in Shanghai. Gucci has canceled a show in San Francisco in May,

and Prada has cancelled a show planned for that month in Tokyo. Anna conspicuously stayed in Paris through the end of the shows, discussing how best to support emerging designers in the current climate.

“They are a creative force and the generation we look to, to lead the way forward,” Anna said. “If they are all having cash flow problems — as I am sure they are, because of low retail traffic in the showrooms and supply chain issues and people wanting to stay out of public spaces — anything we can do to support them is important.” She was hoping to announce a plan in the next few days.

The Real Industry Crisis

“Empty seats at shows are not the problem — it is what is happening in showrooms, the holdups in the supply chains and what they might mean,” said Pascal Morand, the executive president of the Fédération Française de la Couture et de la Mode, the organizing body of Paris Fashion Week. “It is the uncertainty and not knowing how long the situation will last.”

Designers don’t just show their collections at these four big fashion weeks in February and September. They also sell them.

Fashion buyers employed by retailers (Bloomingdale’s, for example) and e-commerce platforms (Net-A-Porter, Matches Fashion) negotiate order sizes and prices with brands and decide what goes into stores. This happens during intimate showroom appointments separate from runway presentations.

This season’s orders have been down, designers said. Not necessarily for big companies like Valentino, Vuitton and Tod’s, their executives said, but for smaller independent houses, and particularly for those whose production takes place even partially in China. In an effort to stop the spread of the virus, thousands of Chinese factories, already closed over the celebratory New Year period, have yet to reopen, bringing manufacturing to a near standstill and headaches for many fashion companies that produce samples and wares in the country. Significant added costs from order backlogs and logistics delays are now expected, as well as a looming threat to global trade.

And it’s not just China. Luca Solca, an analyst at Bernstein, wrote of the effect of COVID-19, “The key numbers to watch – at the moment – are the growth in cases in the provinces of Bergamo, Cremona and Brescia,” some of the Italian production hubs. With many luxury boutiques closed in mainland China, sales down almost 90 per cent, and retailers in key luxury hubs like Paris already counting the costs of a significant decline in Chinese tourists, a reduced number of fashion insiders in the front rows of Paris and Milan is the least of the industry’s concerns.

Jefferies Group, an investment bank, estimates that Chinese buyers accounted for 40 per cent of the Dhs1,120.3 trillion (USD$305 billion) spent on luxury goods globally last year, making the Chinese the fastest-growing luxury shopper demographic in the world. Buyers are concerned the travel bans will reduce their spending. “There has definitely been a drop in buyers from all over the world, especially from China and Hong Kong,” said Ayse Ege, a founder of Dice Kayek, a luxury womenswear label in Paris. “Lots of buyers are saying their budgets have been cut. Some have also asked whether they can cancel orders or have discounts, given the lack of visibility on what might happen next.”

Yet, happily buying has not stopped completely, moreover it is happening remotely. Unable to touch and see products up close, buyers have been video chatting with designers throughout Milan and Paris, using these conversations, along with high-definition lookbook photos and sales line sheets, to make decisions for the upcoming season. This might just be the future, at least for now.