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Fashion Holds Out Hope as 2020 Roller Coaster Nears Finish

Today's fast-moving fashion industry demands an agile, consumer-led retail model, but how do you get there? Join our webinar "Consumer-Led Retail: Optimizing Assortments at Speed" Sept 28th, featuring experts from MakerSights and DTC brand Taylor Stitch.

Alfred E. Neuman wasn’t worried. But, then again, neither was the Captain of the Hindenburg, nor the band on the Titanic. In general, retailers should not worry, but they often do. TV pundits tell you that survival of the fittest will be the retail “rule-de-jour” (and they are probably correct).

Holiday selling has finally arrived and there is pent-up money to spend. However, it appears that the 2020 season was designed by marketing gurus—who decided to wrap Santa in plexiglass and place him in the center of a shopping mall. Perhaps it was Macy’s who characterized it best by abrogating 159 years of retail history and telling Santa that he had to go home (for safety). Fans of Kris Kringle quickly remembered the original “Miracle on 34th Street” movie and realized that Macy’s new Santa action probably caused the original founders of Gimbels to eye roll and plot a return to Manhattan.

Truth be told, this Holiday season will be disruptive for retailers but, more importantly, the fashion industry needs to recognize that the last four years have been equally disruptive for everyone involved. Many retailers and brands maintained strong business models—before everything crashed and burned under the weight of the Covid-19 closures.

Historically, the fashion industry would focus on what politicians wore, not on their politics. However, all that changed under the Trump administration, simply because Trump’s policies have been so disruptive to the fashion world. In reality, fashion highlights for the Trump era were marked by whatever First Lady Melania Trump wore (especially the “I really don’t care” jacket), or when Nancy Pelosi showed up in her Max Mara “fire coat,” or when Ivanka Trump enclosed the Bible in her Max Mara handbag (at Lafayette Park).

In 1992, during the Clinton administration, the fashion word on-the-street was that President Clinton was buying his suits “off-the-rack” at Dillard’s. President Bush was considered preppy, and President Obama’s wardrobe was traditionally classic (except for one tan suit) but, in general (except for golf wardrobes) he was shunned by the fashion police. First Lady Michelle Obama, on the other hand, was quickly deemed a fashionista—running the gamut from J.Crew to Tracy Reese.

President Trump, to his fashion credit, was always very well dressed (except for the HUGE overcoat), but he maintained only two outfits of note. His business attire is dark suit, white woven shirt and bright tie. His casual attire was always khaki pants, a white knit shirt and a golf cap.

During the Trump era, the political fallout for fashion probably started when Macy’s tossed candidate Trump’s clothing line during the first campaign. That appropriate action was soon followed by Nordstrom doing almost the same thing (to Ivanka’s line).

The presidential candidate reacted (at the time) by tweeting to his followers: “#BoycottMacys.” But those initial actions were old news, and eventually President Trump turned to bigger areas of potential retail carnage. First, his administration going to lower corporate taxes (which was a great idea), but the team attempted an incomprehensible taxing method called the Border Adjustment Tax (BAT tax) to raise revenue. This highly flawed idea included an additional tax on retail’s “cost of goods sold” which had the net effect of increasing the dollars paid significantly! Many in the garment industry screamed so loudly about the “BAT tax,” that the government finally put that horse back in the barn.

As everyone was catching their breath from the BAT fiasco, along comes the next frog in the frying pan—the famous Trump tariffs. Don’t worry (the Trump team would say to retailers) we’re not after consumer items, we’re only after steel and aluminum. The industry replied, “OK, just stay away from apparel, footwear, and accessories.” Sure enough, as the clock ticked forward, the fashion industry was squarely hit with China tariffs. First came the tax on gloves, hats and handbags—and ultimately on apparel and footwear. Prices started to rise, and finally there was a truce called the China Phase One Trade Agreement.

After Phase One was signed on January 15, 2020 in the White House— the Coronavirus escalated in China. It began around the time of Chinese New Year and the concern, at that point, was that the USA would be short of product for the spring selling season. China pushed hard to ship their products—and many did, just in time for the U.S. retail sector to shut down for coronavirus. The Spring 2020 fashion season is now history. Essentially, the industry ground to a halt and Christian Siriano started making face masks in his sample room. Factories had to deal with cancellations and major brands worked to reshuffle their supply chains.

Truth be told, some brick-and-mortar retailers were given a competitive advantage by the government (during the lockdown) when they were deemed “essential” and allowed to operate, while others were forced to close. To this day, retailers are struggling to understand why they were not deemed “essential.” Funny, if you sold clothes and groceries you could stay open, but if you only sold clothes you had to close. If you ran a shooting range, gun shop, or a liquor store you could stay open, but if you only sold truly essential items like underpants and socks you had to close.

As time moved on, those retailers who mastered e-commerce have done reasonably well, and those who understood how to combine online with curbside and touchless have also succeeded. Many retailers with excessive leases (or weak capitalization) have been forced to close or restructure, and there is now a realistic hope for a better outcome given the adjustments. Whatever the case, at the end of the day, fashion retail will emerge stronger and healthier than before, with lessons learned about how to prepare and exist in an extremely difficult environment.

During the last four political years, the fashion industry battled hard to survive and to grow. Now, as the industry confronts the latest wave of Covid-19 and prepares for the Holiday 2020 season, it’s easy to see irony in a recent quote from President Trump. In one short comment, he encouraged everyone to forgive and forget all the fashion bumps that have lined retail’s road during his administration: “We have the greatest country in the world. We’re going back, we’re going back to work.”

 

Rick Helfenbein is the former chairman, president and CEO of the American Apparel & Footwear Association and is now a retail and fashion consultant. He appears for industry comment on CNN, CNBC, FOX, BBC, Newsy and Bloomberg. Follow him on LinkedIn: https://www.linkedin.com/in/rick-helfenbein-17200711/      

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