Reporting by: Arthur Friedman, Christopher Hall, Sarah Jones, Glenn Taylor, Liz Warren and Angela Velasquez
Trying to predict and plan for anything in the uncertain age of Covid may be a futile exercise, but if any group has a pulse on what the next 18 months hold for the global denim industry, it may be the 2020 Rivet 50 honorees. An international group of executives, retailers, creatives and influencers nominated and voted for by their peers, the Rivet 50 provides a collective outlook on the trials and tribulations that lay ahead for the denim sector, as well as the opportunities within its grasp.
Though the jeanswear category is faring better than expected, compared to the start of the pandemic when consumers zealously touted wearing pajamas and sweats as they worked remotely from their homes, business is far from usual. A second wave and more shutdowns have many bracing for another round of bankruptcies and closures.
“It’s going to go through a real shakeout,” said first-time Rivet 50 honoree Dan Feibus, CEO of Vidalia Mills Co. “You have some structural overcapacity, partially fueled by an industry that has a lot of extra capacity chasing a limited number of orders. I think that with the net impact on retail from the Covid-19 crisis, I see a smaller industry coming out of it. It’s going to be a bit of a watershed.”
Contributing to this shakeout is retail’s digital evolution that was accelerated by mandatory store closures worldwide and social distancing guidelines. It’s a shift that denim designer Maurice Malone said was a long time coming. “I’ve been telling retailers over a decade now that they have to have an online arm of their business to survive,” Malone said. “Covid-19 has exposed the vulnerabilities of businesses without an online presence.”
As for his own eponymous brand, Malone is committed to selling direct-to-consumer. “If a retailer wants to buy, I’d think about it but have no real urgency to close sales,” he said. Malone expects to see more small direct-to-consumer businesses with a better understanding of their end-consumer spring up. And as a result, “big dinosaur brands that are slow to change, or rooted in old ways, will die out as they always have,” he said.
This mode of consumption, he added, will eventually trickle down the supply chain. “Eighteen months from now, more businesses will emerge or be optimized to sell smaller and faster. The driving force will be the digital consumer,” he said.
“Manufacturers, suppliers, and the financial industry around denim will have to shift their ability to work with smaller companies,” he said, noting that this means lower or no minimums and traditional finance either “getting creative or getting out.”
Unfortunately, Mary Bruno, founder of Life After Death Denim, said a lot of brands will not be able to withstand the uncertainty of the denim market. “Many brands and retailers did not have the financial means to weather the storm,” she said. “Everyone changed what they wore overnight.”
The brands that are taking this opportunity to really get to know their customers and pivot to meet their customers where they are now, will be the brands that survive, Bruno added. “The idea that customers will want to buy new clothing every season is outdated. Shipping denim to stores in July when it’s 80 degrees outside or denim shorts in February when it’s 30 degrees is antiquated, yet we all still do it,” she said.
Brands are re-thinking the traditional fashion calendar, which if brands follow-through with the plan, may eventually uproot how and when products are made and sold.
Outland Denim founder and CEO James Bartle expects to see less emphasis on traditional seasons and more capsule collections in the next 18 months—a strategy that he is already putting in place for his own award-winning brand. “This is one of the ways we intend to pivot our operations, by shifting from two annual seasons into a yearly six capsule cycle, as well as expand into new garment categories,” he said.
Reducing collections, and thus eliminating the need to produce more, is a novel concept, but it requires decision makers to behave contrary to how most operations are set up, noted Lucie Germser, founder of Sphynx, a consultant business with a denim pedigree.
“Let’s not deceive ourselves or expect magical results. If we want to have a fulfilling life, we have to stop now with massive consumption. It’s a terrible error,” she said. “Making people believe that their six months old wardrobe is already out of fashion is an aberration. We will need to focus more on basic and timeless design made locally.”
Taking responsibility
If more brands make the right product—and less of it—the industry stands a chance to correct its wrongs, in terms of the environment. As Hiut Denim Co. co-founder David Hieatt simply put it: “If you want to be really good for the environment, start by only making stuff that people want.”
It will take time for the denim industry to understand the depth of damage caused by the pandemic. “The general consensus in our industry as the dust starts to settle is that the biggest problem we face is over-supply and over-consumption, which in turn has created massive waste,” said Omer Ahmed, Artistic Milliners CEO. “With near-term consumption dropping and future forecasts also looking bleak for most, the industry is being forced into an overall consolidation, which in my opinion will be healthy for the ecosystem in the mid- to long-term.”
“One thing we have all found during Covid-19 is how important nature is to us,” said Salli Deighton, a denim consultant. “I believe we haven’t even touched the sides with natural solutions and opportunities, which are on our doorstep to make better denim.”
The brands and mills following Ellen MacArthur’s Jean Redesign guidelines for circularity are working to be part of the solution, however. Over the next 18 months, all the Jeans Redesign participants will have made their jeans available on the market. The foundation hopes this set into motion a ripple effect, leading to the exploration and creation of a wider selection of products in line with circular economy principles, according to Laura Balmond, project manager of the Ellen MacArthur Foundation’s Make Fashion Circular initiative.
“We know the entire fashion industry is facing difficulties post-pandemic. However, the denim industry has been quietly innovating solutions on regenerative agriculture, green chemistry, increasing recycled inputs, reducing water and energy use, which will be more valued and more important than ever,” Balmond said. “It will be exciting to see these innovations being widely adopted and will be key to keeping denim firmly at the heart of fashion.”
Consumers are listening. Jean Hegedus, The Lycra Company’s sustainability director, said some early research indicates that consumers are becoming more concerned than ever about sustainability and are being more mindful about what they’re purchasing.
“We’re seeing a little bit of a trend in wanting to invest in fewer but higher-quality garments that last longer, and it is an opportunity because it offers brands and retailers the chance to engender consumer loyalty and also help the industry reduce its footprint, which is something we absolutely have to address,” Hegedus said.
“If there’s a positive thing to come out of this, I think that it’s that the consumer is becoming more aware, more thoughtful and more mindful about what they are buying,” she added.
Value shift
Though the denim sector is making inroads in their communication to consumers about sustainability and the additional cost that it requires, leaders in the industry are empathetic to the financial crisis’ that individuals and families are facing during the pandemic.
“I hope consumers take the path of challenging the environmental and social impact of their clothing and understanding the cost implications of creating a positive future,” said Claire Ford, founder of Claire Ford Consultancy, a London-based firm that works with brands such as Outland Denim and Reiss. “I worry consumers’ financial restraints due to the epidemic will lead to people concentrating on price.”
As a result, Alberto De Conti, head of Rudolf Fashion Division, said denim sales in the next 18 months will likely be broken into two segments: denim in the value channel, “which will be important to meet the needs of those millions of people worldwide who have lost their jobs as a result of the pandemic,” and better quality denim for who have realized they don’t need myriad pairs of jeans in their closet.
For the interim period as consumers—and retailers—find their footing, Piyumi Perera, head of design for Hirdaramani Industries, anticipates a slowdown in denim production.
“People don’t have the same flow of income for fashion, but on the bright side, this should open up the space for better-made denim with more intrinsic value, meaning products with protective finishes, great fit and environmentally responsible production,” she said. “This type of denim should become front runners in denim buying trends in 2021.”
Function over fashion
While the summer and fall brought an uptick in searches for fashion items like wide-leg jeans, patchwork denim and jean shorts, more lockdowns coupled with the arrival of cozy seasonal winter products means demand for comfort is unlikely to slow.
“I think we will see a return to more basic, sustainable and durable fashion,” said Joel Carman, owner of Toronto-based boutique Over the Rainbow. “With denim becoming more of a staple than ever, comfortable stretch fabrics will take a bigger place in clothing.”
Consumers’ comfort-first buying habits will likely lead to brands tweaking their design point-of-view, but Isko CEO Fatih Konukoglu says denim’s versatility will help ensure its place on sales floors and in closets. Along with comfy fabric, denim featuring protective and antibacterial properties, and utility garments will be part of this new normal, he said.
“We have to be ready to face a completely different world with a completely different mind,” Konukoglu, said. “We are ultimately going to have to adjust to a new normal.”
But denim, being one of the rare apparel categories that evokes a sense of history and individuality, may not require a complete re-write.
“My experience over the years has taught me that boutique denim brands are somewhat recession proof,” said Gary Lenett, co-founder of Duer Denim. “If there’s a jean brand or fit that you love that fits you perfectly, there’s a good chance you’ll prioritize your spending to be able to buy it. It may be the last bastion of loyalty.”
In it together
Denim brands and their suppliers will ultimately have to carve a post-pandemic path that suits their business. How they achieve that may be a balance of less and more: fewer collections, SKUs, suppliers and retailer partners; more sustainability, comfort and practicality. This crash course in damage control, however, will result in a smarter, more responsible and agile industry in the long term.
“I believe the denim industry will become much more flexible, and that now more than ever, it is crucial to be able to adapt to change,” said Sebastian Klinder, Munich Fabric Start and Bluezone managing director. “The industry needs to restructure and redefine itself.”
Collaboration, one of the denim industry’s greatest strengths, will be part of the recovery. “We will be more connected with the community that we are in—that is our customers, like-minded designers and brands, local universities—and we will create more collaborations,” said Hans Ates, founder of Blackhorse Lane Ateliers in London.
Though the long-term impact of these early months of 2020 is far from understood, Saitex founder and three-time Rivet 50 honoree Sanjeev Bahl warns companies from expecting pre-virus “normalcy.” In fact, pre-Covid conditions couldn’t be farther from the reality, he said.
“One year from now, once the shock of this fundamental shift wears off, we will be left to be accountable for what happened, how we got there and what we failed to do. It will be an incredible awakening for all of us,” Bahl said. “From that point, we will begin a new journey.”
Read more from the 2020 Rivet 50 honorees here.