THE CHEAT SHEET

Fashion Responds to the Protests

Nike released a "Don't Do It" ad in support of protests against police brutality | Source: Instagram/@nike

• Protests swept multiple US cities over the killing of George Floyd by a Minneapolis police officer during an arrest
• Nike released an ad on social media titled "Don't Do It" encouraging viewers to protest; in a surprise move, rival Adidas retweeted the video
• Fashion brands find themselves under pressure to take a stand on major political issues, particularly from young consumers

Cities around the US have been rocked by protests over the killing of George Floyd, a black man, in the hands of white police officers. And the arrest of one of the officers involved on Friday has done little to reduce tensions. Scenes of marchers blocking highways and clashing with police are likely a preview of what's to come in the summer and fall. The US is heading into the thick of a presidential campaign that was always going to be fraught, but is now happening against the backdrop of a pandemic that has seen one in four American workers file for unemployment benefits.

The instinct across much of the fashion industry even a few years ago was to ignore controversial topics, including police brutality and racial injustice, entirely. But that's gotten harder as young consumers demand the brands they patronise also share their values. Nike, whose core customer is young and racially diverse, has benefitted hugely from its reputation as a progressive corporate leader (on the issue of race, at least) since the signing of former NFL player and activist Colin Kaepernick in 2018. Other brands have also encouraged customers to protest climate change, police violence and other causes.

The Bottom Line: Nike's "Don't Do It" ad opens the door for more companies to weigh in on the killing of George Floyd. Brands need to come up with a plan for how they will address the issue of police brutality, racial injustice and other controversial topics, as politics is certain to dominate the cultural conversation from here on out. Ignoring what's going on in the world can make a brand seem irrelevant, while clumsy or superficial efforts open them up to accusations they are trying to profit from injustice.

Closing The Gap

Gap store exterior | Source: Gap

• Gap reports quarterly financial results on June 4
• The company appears to have enough cash to weather the crisis after borrowing $2.25 billion in April, analysts say
• Gap had planned to reopen 800 of its 3,300 locations across its brands by the end of May

The US Plunging Deeper Into Crisis

A closed Bloomingdales store in New York. | Source: Gabby Jones/Bloomberg via Getty Images

• US employment data for May expected to show the jobless rate soared to 19.5 percent, the highest since the Great Depression
• Apparel spending is particularly weak, with McKinsey predicting up to a 30 percent contraction in global revenues as well as mass bankruptcies through the end of next year. 
• Vogue and the CFDA last week handed out $2.2 million to nearly 50 small designers, retailers and manufacturers

The Bottom Line: Fashion may be among the slowest sectors of the economy to recover, as consumer demand for non-essentials remains low and inventories built up during the crisis will put pressure on margins long after shoppers return to stores.

SUNDAY READING

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

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