The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
THE CHEAT SHEET
NYFW Rolls Out the Welcome Mat for International Editors
Tom Ford | Source: Getty Images
- Tom Ford has made boosting New York Fashion Week's global profile a priority since assuming the role of CFDA chairman earlier this year
- The CFDA shortened the NYFW schedule to five days and partnered with brands to provide flights, hotels and cars for international editors
- International attention is key for New York to compete with Paris, which has attracted some prominent American designers in recent years
Tom Ford's project to elevate the American fashion industry's global standing faces its first big test this week. His biggest change to fashion week was to lop a couple days off the schedule, but behind the scenes the CFDA is making other overtures to international editors and influencers, from free flights and car service to a kickoff dinner with Ford and emerging designers. This is a multi-season process. Success will be measured not just by the number of foreign attendees, but also whether they carry word of lesser-known designers to their international audiences. That promise of global exposure would then be used to convince the next Virgil Abloh that he or she can find fame and fortune in New York rather than Paris.
The Bottom Line: Looming over the proceedings is the CFDA's ties to Stephen Ross, the real estate developer whose fundraiser for President Donald Trump sparked outrage in the fashion community. Though no fashion week events appear to be taking place at The Shed in Ross' Hudson Yards development, the developer's wife, Kara Ross, remains on the CFDA board.
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Trade Talks Resume as Tariffs Kick In
Chinese-made shoes will be subject to a 15 percent tariff starting Sept. 1 | Source: e-boost consulting
- US Customs will begin collecting 15 percent tariffs on Chinese-made footwear, smartwatches and other goods on Sept. 1
- Duties on handbags, luggage and other goods are set to rise from 25 percent to 30 percent on Oct. 1; most other apparel and accessories will be subject to tariffs starting Dec. 15
- Companies are predicting multi-million-dollar hits to profits as more of their goods are subject to tariffs
In the latest trade-war twist, Trump and Chinese leaders are once again softening their stances and talking potential deals. But peace is unlikely to break out in time to stop new tariffs kicking in Sunday. Brands are resigned to a worst-case scenario. Last week, Abercrombie & Fitch lowered its outlook for the remainder of the year and said tariffs would reduce profits by $6 million. Others are making drastic supply chain adjustments to minimise exposure. Express said it expects to produce 8 percent of its merchandise in China by the middle of next year, down from 20 percent today. Commentary from G-III executives when the company reports earnings on Sept. 5 will be one of the best ways to gauge the tariffs' impact; the licensee for Calvin Klein, Levi's and others produces 65 percent of its merchandise in China and sells almost all of it in the US, according to Needham.
The Bottom Line: The great unknown is whether the disruption caused by tariffs will be the deciding factor in tilting the US economy into recession.
Who Wants to Buy Revlon?
Revlon's flesh makeup line | Source: Courtesy
- Revlon will formally kick off its search for a buyer after Labor Day, according to Bloomberg
- Sales fell 6 percent in the second quarter to $570.2 million; the company faces competition from influencer brands and other start-ups
- High debt levels and regular losses have hampered the company's ability to modernise its brands and market its product
After trying and failing to boost Revlon's sales for nearly two decades, the company's majority investor, Ronald Perelman's MacAndrews & Forbes, may be throwing in the towel. Revlon has A-plus name recognition, but its products haven't kept up with modern makeup trends, particularly the latest crop of Instagram brands. And though Revlon's sales are still far bigger than its upstart competition, they pale in comparison to rival cosmetics giant Estée Lauder. The company has survived by borrowing, including a $200 million loan earlier this month, which put a ticking clock on its endless turnaround efforts. Revlon has reportedly hired Goldman Sachs to explore strategic alternatives, including the sale of some or all of its brands.
The Bottom Line: Some of Revlon's brands could hold appeal for the right buyer, including Elizabeth Arden, which is seeing growth in Asia, and Flesh, a year-old brand aimed at younger customers that has struggled to gain traction but could find new life under a less-distressed owner.
COMMENT OF THE WEEK
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Urban Outfitters is one of many retailers to launch a clothing rental service. | Source: courtesy
BoF readers were split on the question of whether they would join the clothing rental boom:
"No. I want to invest in pieces for me, and come up with my own looks. I’m not ashamed to be “caught” wearing the same thing twice. If I love a piece, I want to wear it again and again" @smizzen
"Absolutely. Aside from being more sustainable it allows me to constantly refresh my wardrobe with fun pieces while still investing in statement pieces to keep for the long run." @taytrgovac
SUNDAY READING
Professional Exclusives You May Have Missed:
- Why start-ups keep trying to invent the closet from Clueless.
- A cloudy picture at Farfetch.
- DTC brands are battling counterfeiters.
- Everyone is launching rental services. Is there enough demand?
- The business of uniforms is suddenly fashionable.
The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to brian.baskin@businessoffashion.com.
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