Unlike a natural disaster or a local tragedy, the COVID-19 pandemic has swept societies across the globe. The pandemic has leveled economies indiscriminately, leaving broken businesses of all sizes in its wake.
In the U.S., department stores, household name brands and once impossibly hip direct-to-consumer upstarts have all been dealt blows. Some of those hits have proven too much to bear. But for other brands, the unexpected challenges have served to strengthen resolve and prompt pithy conversations about future strategy.
Los Angeles-based Lucky Brand falls squarely into the second camp. The California denim brand, famous for its boho styling and cheeky “Lucky You” label sewn into the flies of its jeans, has managed to retain relevance with shoppers through the shifting styles of three decades.
Now, in the midst of unprecedented headwinds, the brand is working to make itself over from the inside-out.
Senior vice president of sourcing Amy Leonard is matter-of-fact about the roadblocks the brand is currently facing. “We’re not unique in how this has impacted us,” she said. “All of our stores have closed, and all of our wholesale customers are closed.”
The brand relies on its brick-and-mortar ubiquity to drive sales, but it’s been able to pivot and reinvest dollars into its DTC business. “Everybody has some kind of website or internet presence,” she said, “so we’re at least out there and able to be in front of the customer.”
The greater—and more lasting—impact, in Leonard’s opinion, will be to the company’s global supply chain. Like many others that source goods from China, Lucky Brand initially believed the coronavirus would prompt “a few weeks of delays” on raw materials and products after Chinese New Year.
Now, that assumption—once held by many brands—seems laughable. “It’s impacting us in every country that we operate in,” Leonard said of the coronavirus’ spread.
Though she hates the hackneyed term “silver linings,” Leonard is quick to point to the current upheaval as a much-needed reset. “There’s so much that we’ve learned personally and professionally going through this,” she said. “Part of it is the solitude and the alone time, if you’re lucky enough to find a quiet room in your home and not have a child or a dog or a spouse around, to just think hard.
“This could be a gift in a sense that it’s a clean sheet of paper to redefine what your brand is, and how you operate your supply chain,” she added.
With an eye toward optimizing efficiency, Leonard is focused on cutting out unneeded steps in the product development process. Tedious rounds of sampling and deliberations over colorways and styling are bad habits that have to go, she said.
“To go forward, we have to be smarter and faster,” she added. “It’s not the supply chain that’s slow, it’s the decision-making process.”
Lucky Brand is managing its development timeline differently from here on out. “We’re really moving toward a much shorter calendar in terms of concept through development,” Leonard said. It will be a just-in-time model where decisions are made just weeks—not months—out from production.
Like many brands, Lucky Brand has historically developed product in quarterly chunks. “Our merchandisers for the DTC side would buy in quarterly, our wholesale team would go to market quarterly,” Leonard said. “Now we’re looking at how we start buying and committing to a month at a time.”
For designers and product developers, that will mean making snap judgments without a lot of time to waffle. “You’re making that decision once, versus making that decision eight months in advance and changing it four times.”
The shift will help to create a more appropriate seasonal flow, she said. “For a long time we’ve been talking about Back to School—does it really happen in July?” Leonard said. “Do you want your sweaters and your new pair of jeans in summer, when it’s still 80 degrees across most of the country?”
Consumers have echoed these questions for years, and Leonard said the company’s sales data shows that October is when consumers truly begin their search for fall garb. “It’s not only the seasonality aspect—it’s about understanding what they need,” she said, “and when they need it.”
Lucky will also start ordering less inventory across the board, she said, in an effort to sell more full-priced product and address the issue of overproduction that has long plagued one of the world’s most wasteful industries.
Leonard pointed to the current state of affairs for many retailers who have had to close their doors with fully stocked shelves and distribution centers. They will be forced to liquidate that product to scrape up some sales this season, and ultimately, unsold goods could end up in landfills.
“We’re really thinking about how to focus on selling out and being happy with that,” she said, instead of backing up successful products with unlimited supply. Now, Lucky will order just enough to sell through, and then the slate will be wiped clean to “move onto the next thing.”
Shortened timelines and smaller production runs will also lead to fewer samples. “The sampling process in itself is atrocious from a sustainability standpoint—the air freight that goes with moving those around,” she said. It also causes frustration for suppliers, who must scurry to adjust every time a design is tweaked.
In fact, Lucky is looking into having samples created in its Los Angeles factory, which currently produces a limited range of products. Most cut-and-sew operations take place in Mexico and Guatemala, while many of the brand’s goods and raw materials are produced in China and India.
“The goal is that when we get back to this, if we’re going to make a sample, instead of sending a tech pack to Asia or China to make a sample and waiting three weeks to get it back, we’ll make it at the factory here,” she said.
The company is also looking at leveraging its production in the U.S. for other product lines, as a means of reducing time to market and avoiding costly tariffs.
“In terms of the other countries, I think at the end of the day we’ll end up with a smaller vendor base as a result of being smart about how we plan our inventory,” Leonard said. Now that the company won’t be purchasing as much inventory, it’s evaluating its partners’ capabilities and aiming for a leaner, closer-knit network.
“It shouldn’t have taken a pandemic for us to change our behaviors,” Leonard said of this season’s strategic shifts and the supply chain evolution she hopes will follow. “I used to say, ‘Get comfortable with being uncomfortable,’ but we had no choice now that we’ve been pushed to that place.”