Small businesses are among some of those hit hardest by COVID-19, as store closures, order cancelations and mounting financial concerns extend through the foreseeable future and put unparalleled pressure on lean teams.
In a webinar led by education hub Fashion Frameworks on Monday, experts throughout the industry shared their advice for navigating COVID-19 as a small business, beginning with strengthening their online presence.
“This is 2008 and 2001 on steroids,” said panelist Marc Weiss, CEO of inventory planning service Management One, referring to the Great Recession and Sept. 11. “If you take a look at 2001, the stores were closed for eight or nine days and then in the last week of September, they did as much business as they do in December. People want to be with people, but this time, social distancing [prevents that]. The way to be with other people now is virtually.”
Weiss added that connecting via email “is good, but social media is better,” and noted that brands have seen success with gift card promotions as a way of generating immediate cash flow.
But while brands and retailers may instinctively resort to discounting to generate cash flow in these uncertain times, experts warn that it may be premature—and could cause issues down the road.
“I wouldn’t push the button on heavy markdowns right now because you’re going to need goods to get through,” said Weiss. “We don’t know when the stores will open again.”
Gary Wassner, CEO at Hilldun, a company that provides financing for small to medium sized apparel companies, added that restructuring offerings rather than discounting them is what businesses should be focused on.
“We all need to work together to figure out how to properly sell this as opposed to [seeing it as] a mass amount of merchandise that we just need to get rid of,” Wassner said. “It’s brand-new merchandise—it just hasn’t been shown yet.”
On a micro level, this could mean brands and retailers connecting with customers via social media to present their relevant offerings—think: sweatpants and other cozy products consumers might need right now, regardless of season. On a macro level, this could mean an industry-wide shift toward season-less fashion in the form of “buy now, wear now.”
“Forget about the season that you might have originally produced an item for. Assort it so that it’s appropriate for the time you think you’re going to deliver it,” Wassner said. “If [COVID-19] is what it takes to force retail to reconsider the sequencing of market and of apparel, then maybe something good will come out of this in the end.”
But small businesses experiencing cancelations and facing extreme financial challenges can’t just look to long-term strategies for help. In those instances, Wassner advised looking into government-funded payroll relief programs, which cover employee payroll for a limited amount of time as long as the company agrees to certain stipulations. He also suggested working with a Small Business Administration (SBA)-approved lender and applying for loans that make sense for the business.
Other efforts include the CFDA/Vogue Fashion Fund, which specifically focuses on providing relief for small businesses facing challenges as a result of COVID-19. Mark Beckham, CFDA’s VP of marketing and events, noted that the fund provides grants intended to sustain small businesses throughout the coming months.
“They’re small grants—probably no more than $100,000—but they’re to help carry you through the immediate crisis; to get you through the other end,” Beckham said. “And that could be for sourcing materials to produce the next collection; it could be for paying staff that you may want to furlough; it can be for medical insurance if you have furloughed.”
Applications for micro grants will open on April 8, and payments will be made in two installments through May and June.
Wassner reminded everyone that small businesses are crucial to fashion, and industry firms must help one another throughout the pandemic.
“What we can’t do is forget the small brands,” said Wassner. “It’s great to be able to show in Paris, it’s wonderful to be able to get a major platform to show your product, but if we eliminate the opportunities for small brands to show and to be seen globally, whether it’s digitally or physically, we’re ignoring a huge percentage of the industry.”