THE CHEAT SHEET

Watch What Happens 

Bulgari is among the brands backing Geneva Watch Days, the first Swiss watch fair since the pandemic | Source: Instagram/@bulgari

• Geneva Watch Days, a new event organised by Bulgari, Breitling and other brands, will run Aug. 24-26
• Brands will show new timepieces at hotels or their stores, rather than a central exhibition hall
• Many brands were already questioning the utility of watch fairs, with some focusing more on pitching directly to consumers

The Bottom Line: Much like in fashion, the pandemic has exposed cracks in the system, including an over-reliance on wholesale and outmoded seasonal trade shows. Expect brands to use this year's disruptions to make dramatic adjustments to how they market and sell watches.

Brands Feel the Love in China

Yang Mi collaborated on a limited edition for Qixi Festival in 2018 that was stocked in Michael Kors stores globally | Source: Courtesy

• China's Qixi festival on Aug. 25 is a major shopping holiday with a romance theme, similar to Valentine's Day
• Most Western luxury brands release limited-edition items and extensive marketing campaigns to capture some of that spending
• China's retail sales have yet to fully rebound, months after the country lifted its Covid-19 lockdowns

Is Better Than Expected Good Enough? 

LVMH is expected to complete its acquisition of Tiffany & Co. later this year | Shutterstock

• Gap Inc., Abercrombie & Fitch, Nordstrom, Urban Outfitters and other brands report quarterly financial results this week
• Most brands will report steep declines in sales, though in many cases analysts expect the drops to be less than initially feared
• Many brands are engaged in high-stakes negotiations with landlords

It's been an unrelentingly brutal six months for American retail. Publicly traded fashion brands stocks are still down anywhere from 20 percent to 40 percent this year, even as the S&P 500 hits new record highs. The back-to-school shopping season, second only to the holidays for some brands, is likely to be underwhelming in the age of remote learning.

When brands release results this week, expect them to outline how they plan to survive this period and give their forecasts for the rest of the year. Inventory remains a challenge, and brands will have an opportunity this week to explain how they plan to move those unsold clothes. In most cases, that strategy will likely revolve around ever-deeper promotions. Real estate is also likely to play a big role in the conversation this week, as many chains are closing stores and negotiating with landlords over rents on those that remain open.

The Bottom Line: The outlook for American retail is heavily contingent on the wider economy, where a recovery may be in jeopardy as government stimulus runs out.

SUNDAY READING

Professional Exclusives You May Have Missed: 

• If you aren't selling jewellery in China, now is the time.
• Pre-orders are becoming a popular tool for fashion brands. But are they a good idea?
• How to salvage the back-to-school season.
• The pandemic changed the way people live. How can fashion adapt?
• Is Instagram Reels better than Tiktok? It depends on who you ask.
• Who needs investors? 7 tips for bootstrapping your fashion business.

The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to brian.baskin@businessoffashion.com. 

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