THE CHEAT SHEET

Bankruptcy Court’s Newest Graduates

J.C. Penney | Source: Shutterstock

• A judge has given Neiman Marcus the all-clear to exit bankruptcy later this month
• J.C. Penney agreed last week to be acquired by mall operators Simon Property Group and Brookfield Property Partners
• Century 21 said last week it would file for bankruptcy and close all stores, while Lord & Taylor has announced it will liquidate

The Bottom Line: The trend of malls owning their most troubled tenants is the latest chapter in a story many expected to be wrapped up by now. It's been conventional wisdom for a decade that there are too many stores competing for the attention of American shoppers, but there's too much money sunk into brands and the malls that house them for investors, landlords and creditors to pull the plug.

Fashion Week's Make-or-Break Moments 

David Koma's Autumn/Winter 2020 show during London Fashion Week | Source: Getty Images

• New York Fashion Week runs Sept. 13-16; London Fashion Week runs Sept. 17-22
• In New York, Jason Wu is one of only a handful of designers planning to show before an audience
• The UK government recently restricted most events to six people as new Covid-19 cases surge; runway shows and presentations are expected to move ahead 

Fast Fashion's Slow Recovery

The owners of both Zara and H&M will give sales updates this week. | Source: Matthew Horwood/Getty Images

• Zara owner Inditex will report quarterly results this week, and Hennes & Mauritz will give a sales update on Sept. 15
• Both companies reported steep sales drops in the second quarter, though in both cases results were not as bad as analysts expected
• In June, Inditex said it would close 1,200 stores worldwide as it invests more in e-commerce

The pandemic has acted as an accelerant for the long-term trends reshaping the fashion industry, and many brands find themselves ill-equipped to handle a reality they thought would take years or even decades longer to arrive. Fast fashion's giants have had an easy time adjusting to the shift from officewear to loungewear; after all, they are set up to chase trends the moment they surface on Instagram. The owners of Zara and H&M said earlier in the pandemic they were confident that sales would quickly rebound. This week, we'll see if they were right.

Zara and H&M were also in the middle of digital pivots before Covid-19 touched off an e-commerce boom, though the jury was still out on whether those efforts were bearing fruit. Inditex's announcement that it would close 1,200 stores was an indication that the company expects a permanent shift in consumer behaviour.

The Bottom Line: Watch for whether these companies address the resale market, which has gotten a big boost during the pandemic. (Hennes & Mauritz's Cos brand launched resale earlier this month.) Though still small, sites that make it easy for consumers to buy and sell used clothes play a similar role in allowing budget-conscious shoppers to keep their closets fresh.

SUNDAY READING

Professional Exclusives You May Have Missed: 

• What fashion media can learn from the Chinese model.
• LVMH is calling off its Tiffany mega-deal. What now?
• LVMH is trusting Kim Jones to define Fendi's post-Karl look.
• How to win the pandemic's activewear boom.
• The pandemic has created a "perfect storm" for counterfeits.
• The key metrics fashion CEOs are watching now.
• The "zero inventory" solution.

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

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