NEW YORK, United States — The growing coronavirus pandemic — which has already resulted in thousands of deaths, put 30 percent of the world’s population under lockdown and thrown the global economy into crisis — is forcing fashion brands large and small to slash budgets, with significant knock-on effects for the ecosystem of public relations agencies that serve them.
The issue was made worse, on Friday, with the cancellation of key events like fashion weeks in Paris, Milan and London, which typically account for significant revenue for PR firms.
Some agencies are resorting to reduced fees, salary cuts and layoffs to stay afloat, while others are finding ways to pivot and, in some cases, join forces with other agencies.
DLX PR, which has offices in Paris and New York and counts brands such as Moschino and Carolina Herrera as clients, has begun collaborating with Daisy Hoppen’s London-based DH-PR.
“We’ve been friends for many years and have always offered [each other] ad-hoc support, but now we speak daily, sharing on all matters of topics from local market intelligence, servicing media through to changes in consumer behaviour as it relates to our clients,” said DLX PR Founder Guillaume Delacroix and President Justin Padgett in a statement to BoF.
French fashion PR guru Lucien Pagès, who last year expanded his office in Paris and opened a new office in New York, has not teamed up with another agency, but has been consulting Chloé Reuter, who operates Reuter Communications in Shanghai, where the contagion struck before making its way to Europe, the US and the rest of the world. “It was good to talk to her because she was ahead of the problem,” Pagès said. “The answer for all of us will be collective.”
Boutique firms like DLX, DH-PR and Lucien Pagès may be vulnerable. But it’s not just smaller agencies that have been challenged by the crisis. Powerhouse firms, too, have spent the last month not only recalibrating their clients’ strategies but re-examining their own.
As with all crises... one can retrench and do more with less and [plan] effectively for the future.
“We are, of course, viewing individual costs related to our offices as well as non-essential external suppliers,” said Alexander Werz, co-chief executive of Karla Otto. “As with all crises, be it the SARS epidemic, 9/11, or the global financial meltdown, one can retrench and do more with less and [plan] effectively for the future.”
“With so much uncertainty right now, the only thing that seems clear in the fashion industry is that going back to ‘business as usual’ is not an option,” said Carrie Phillips, partner at BPCM, which has offices in New York, London and Los Angeles. The agency has laid off employees in its fashion division, which Phillips said was “suffering the greatest” while clients in sectors like cannabis, beauty and drinks were experiencing “little interruption.”
PR Consulting, which operates offices in Paris and New York and counts Altuzarra, Loewe and Dries Van Noten as clients, laid off more than 30 employees in its New York office last week and is shifting its focus to corporate communications services that are less dependent on events, said Founders Pierre Rougier and Sylvie Picquet Damesme.
In London, The Communications Store CEO Julietta Dexter said that none of its employees have been laid off, but that the company’s entire team had taken a voluntary pay cut, as they continue to work with clients and assess the future “on a week-by-week basis.” The agency is also trying to “data-proof” campaigns by better reporting key success metrics to clients. Fashion brands have long been asking for greater accountability from their PR agencies, as digital media enables the kind of tracking that placements in glossy magazines never did.
While many agencies are still uncertain about how to manage the cancellation of events like men’s and couture fashion weeks, some are examining digital initiatives that may offer a solution.
KCD, which operates offices in New York, Paris, London and Los Angeles has a robust events business and produces some of fashion’s biggest shows, has begun speaking to some of its clients about how to stage digital fashion shows, complete with virtual fittings. The firm is building on experimental technology it put in place back in 2013, with the launch of digitalfashionshows.com.
“You obviously don't have the audience there, but you're filming a show in motion of your collection and you give all of the assets that someone of the media would normally get out of a show in terms of runway images, moving video, a designer interview, beauty looks backstage, and all of the key elements of what you would get out of a live show,” explained Rachna Shah, KCD’s managing director.
The firm is also planning to hold digital press days via a private Instagram account, an approach that, along with larger digital event concepts, is also being explored at Karla Otto.
The only thing that seems clear in the fashion industry is that going back to ‘business as usual’ is not an option.
Even smaller firms are pivoting to digital. B.Good PR, a boutique Los Angeles communications firm launched in January, has replaced its plans to travel to New York to meet with editors with “virtual breakfasts” that adhere to social distancing guidelines.
Among young firms who are trying to cut already-low overhead costs as much as possible, the first to go are often costs associated with sample trafficking, a fixture service that has rapidly dried up due to quarantine measures and cancelled shoots.
Gia Kuan’s two-person team behind Gia Kuan Consulting, which was founded in 2019 and counts Area and Telfar as clients, is pivoting away from sample trafficking and events-related services to communications strategy in what Kuan calls a “mandatory self-reflection.”
“Maybe it is a silver lining because it's kind of like, [sample trafficking and events] are using the most resources and perhaps they’re the most wasteful,” said Kuan. “It's made me rethink my strategy in a way that I've started to sort of navigate away a little bit, or broadened my scope so that I work with clients on brand strategy, so more internal rather than external-facing.”
Native Agent’s Cynthia Leung, who works for Aesop and Mykita from her base in New York’s Chinatown, is also questioning the value of traditional services like sample trafficking. Even before the pandemic, Leung said she and her team only provided client samples to the “best” shoots (“It's a huge outlay of time and energy. You can spend two hours in the morning trying to fine-tune a very simple return from One World Trade Center”) and so the disruption to fashion shoots hasn’t completely derailed her still-fledgling business.
Now, she’s focusing even more of her energy on digital strategies. Earlier in March, Native Agents announced a partnership with local designer Peter Do, an LVMH Prize finalist. In light of the pandemic, Leung is thinking about how the label might prepare for the competition’s June presentation, as well as considering how to create a virtual showroom.
Life in the time of COVID-19 is about making magic out of beans.
It’s also become harder to place non-virus-related stories with journalists, notes Adam Shapiro, founder of London-based L52 communications. “We've compiled quite a decent dossier of feedback in terms of what everybody's working on to provide to our clients,” said Shapiro. “Providing that market feedback is so important.”
Other communications firms are trying to provide value in more unconventional ways. Rebecca Astorga, an account supervisor at MSSmedia, a Miami-based agency whose clients include fashion label Lafayette 148 New York, has taken to educating clients about the government support that is now available to its small-scale clients.
"Our sole goal has been to support clients by helping them to identify the resources that are now available through disaster assistance by the US Small Business Administration,” Astora said. “Many of our clients, located in areas eligible for loan assistance, such as New York and Florida, are unaware that low-interest federal disaster loans exist. And, if they are aware, they are unsure of how to go about applying for them.”
For its part, Jennifer Bett Communications is highlighting its value by reviewing the messaging in everything from a client’s marketing emails to its Medium posts. (JBC recently started offering pro bono “office hours,” 30-minute conversations with small business owners offering PR and communications guidance which, in effect, doubles as good PR for their own services.)
Grayscale PR, which represents luxury accessories clients like Gentle Monster and Loquet, is reconsidering its fee structure. “There are sometimes additional fees for specific social strategies, seeding, and things of that nature that we will no longer charge for,” founder Fallon Nachmani said. Meanwhile, Moxie Group founder Taryn Langer said the agency is “entertaining partnerships” at reduced rates to attract business.
But ultimately, the most important thing any one firm can focus on right now is maintaining existing clients, said Rick Gould, managing partner at Gould Partners, a strategic consulting and mergers and acquisitions firm that specializes in the public relations business. “My experience is that a lot of times when a client says, ‘We want to pause for a few months or six months,’ there’s a good chance they're not coming back. Once they pause and you never hear from them again.”
Or as Native Agent’s Leung put it: “Life in the time of COVID-19 is about making magic out of beans.”
And yet, agencies with a presence in Asia may have some reason for optimism as China slowly reopens for business. “We see that the Chinese market is recovering and have opened all our Asian offices again,” said Karlo Otto’s Werz. “We see very positive signals.”
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