The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
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THE CHEAT SHEET
E-Commerce and the Coronavirus
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Rapper Saweetie at Revolve Festival during Coachella in 2019 | Source: Getty
- Revolve releases quarterly results on May 13, Farfetch on May 14
- Luxury e-commerce has been partially shielded from the plunge in consumer spending on apparel. Farfetch said in April that first-quarter sales would rise 43 percent to 46 percent
- A Cowen survey found 68 percent of Revolve's mostly young, female customers are shopping less
The economic effects of the pandemic are seemingly designed to funnel spending toward online retailers. But it's not easy for e-commerce players to take advantage. There are basic logistical issues, from keeping warehouses Covid-free to unreliable shipping. The two e-tailers reporting results this week are leaders in their particular niches, and have their own challenges. Revolve's business is built around a festivals and beaches Instagram aesthetic that looks more obsolete by the day. (Coachella alone drives up to 5 percent of sales, according to Cowen.) Farfetch may see its progress toward profitability derailed as discount mania takes hold in luxury.
When luxury spending rebounds, online retailers should benefit, with Farfetch at the front of the pack. Cowen sees Revolve as an attractive acquisition target, with its technology-first approach and young customer base. However, the retailer isn't sitting on its hands, and has steered its influencer army toward QVC-style presentations rather than vacation shoots.
The Bottom Line: Public companies with cash reserves and access to credit are in a better position to ride this out than smaller, private competitors, which have mounting debts and increasingly nervous investors.
France Gets Back to Work
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Forum des Halles shopping centre in Paris | Source: Shutterstock
- France will ease lockdown restrictions on May 11, allowing many stores and offices to reopen
- Fashion companies are taking precautions ranging from encouraging remote working to frequent deep cleanings
- Milan began to reopen last week, while London and New York remain under full lockdown
Fashion's capitals are slowly, haltingly starting to open back up for business. Parisian firms that set the agenda in luxury fashion will also provide a path forward for their rivals in New York, London and beyond. A business built around intimate lunches, crowded photo shoots and personally delivered samples won't be easy to adapt to the new rules of social distancing. But they will figure it out — commerce generally trumps tradition. Remote working will remain the default wherever possible, while offices will undergo elaborate sanitisation rituals on a regular basis. In-person activities, from fittings to photography, will require elaborate distancing protocols, which will make them slower and more expensive. Expect progress in fits and starts, with frequent regression as new Covid-19 clusters emerge. Stay tuned for more on this topic from BoF this week.
The Bottom Line: How stores will operate in the new normal is another question entirely. People will put up with plenty of inconvenience when they're paid to do so in their jobs. Will they do the same when shopping for their Chanel?
Fashion Media Gets Creative in Its Pandemic Response
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Vogue Taiwan's latest cover featured a model against an all-digital backdrop | Source: Instagram/@voguetaiwan
- Fashion media is starting to release content planned entirely after the pandemic took hold
- We're seeing more digital-only issues, celebrities self-styling shoots at home (Taraji P. Henson, Chloë Sevigny) and weightier covers and themes
- Media companies are bracing for advertising revenue to drop 50 percent or more in some cases
Photographers, editors and celebrities have embraced a DIY, “let’s put on a show” approach toward the pandemic, which has made the usual production process for glossy magazines impossible. Vogue Portugal went meta with its all-text cover that reads "Do you buy a magazine just for the cover?" Vogue Taiwan dressed a model in Chanel and put her inside a digitally created backdrop.
The covers and coronavirus content might score with readers, though it's questionable how long they can go on this way (Vogue Portugal probably wouldn't like how many readers answered its cover question in the affirmative). The more pressing problem is that the pandemic magazine issues are notably short on advertising. Brands have slashed marketing budgets, and media, particularly print, has been hit hard.
The Bottom Line: As in other sectors, the pandemic is accelerating trends that were already well underway. Magazines were shutting down well before the pandemic, and with advertising unlikely to rebound anytime soon, more will follow.
SUNDAY READING
Professional Exclusives You May Have Missed:
- Who will buy Charlotte Tilbury?
- The art of the crisis pivot, and the brands getting it right.
- Can Neiman Marcus survive bankruptcy?
- Will Millennial debt threaten China's luxury rebound?
- Fashion's sustainability goals threatened by the crisis.
- What to do when you've been laid off.
- How to stage a digital live event.
- J.Crew says bankruptcy is the reset it needs. But first there has to be a reset.
- Fashion and music find new ways to partner in the pandemic.
- How to go from wholesale to direct-to-consumer.
The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to brian.baskin@businessoffashion.com.
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