The Covid-19 pandemic will not just threaten business failure for many clothing brands and manufacturers, it may herald the end of the current high production, fast fashion model and result in fewer, smaller collections from more sustainable supply chains.
“The crisis will disrupt and change many ways of doing fashion business around the globe,” says Lutz Walter, director for innovation and skills at Euratex, the European apparel and textile confederation.
There would be more focus on flexible sourcing – smaller orders, closer to market, more diversification of sourcing locations – as well as on in-season replenishment, Walter predicts.
Moreover, it might prompt some reshoring, with “more focus on critical local supply chains in the European Union/US, and questioning of total clothing export dependence in major CMT [cut, make and trim] countries like Bangladesh,” he suggests.
Sustainable supply chains
In Italy, Dr Gianfranco Di Natale, managing director of Italian clothing and textile industry federation Sistema Moda Italia, agrees, telling just-style: “Supply chains with a lower environmental impact will be created, and proximity chains will be preferred over countries with lower costs.”
For Dr Di Natale, Covid-19 will lead to Italian consumers making fewer impulse buys and more thoughtful purchases. “The demand for products from truly sustainable supply chains will increase, as was already happening before the crisis.”
He is also confident ‘Made in Italy’ would suit this new slower clothing design and production cycle. “Already now this brand is very high quality, and we will continue on this path for all the ‘prêt à porter’ collections.”
The Italian clothing director maintains that while a recent Euratex survey shows some 60% of European companies expect a 50%-plus drop in sales and production, with one in four considering closing altogether, the outlook for Italy’s clothing sector is more positive. “We trust there will be no definitive closings,” he says, especially as: “In Italy, the production share of fast fashion is very low.”
Euratex’s Walter warns, however, that Covid-19 will lead to a “weeding out process of the weakest players.” Survivors must notably have a “flexible/fast responding, digitally connected supply chain,” and “strong trusted business relationships.”
Showing the textile industry can adapt to any situation, notably by turning to mask-making, Walter says Covid-19 may end up in “lasting reconversion of textile/clothing businesses to technical, functional textiles and PPE [personal protective equipment] as CMT operators find making PPE is a more reliable and profitable business than making fashion products for international brands.”
Such predictions of change also come from Orsola de Castro, the founder of UK-based fashion sustainability campaign Fashion Revolution, who argues the pandemic will be a “turning point” in the fast fashion model, with consumers in future less inclined to favour mass-produced prioritising quantity over quality.
The inevitable large stockpiles of unsold inventory would, she claims, turn consumers against “buy and throw” and rather prefer “buy to keep,” with increasing demand for brands that can demonstrate sustainability in production that “responds to the needs of the planet.”
UK-based fashion industry consultant Elizabeth Stiles agrees, saying “conscious consumerism” will “really accelerate once stores have reopened.”
She adds that having a “brand story, incredible product and a sustainability message will be really key for brands to survive this and stay relevant to what consumers want.”
This will underpin any reshoring undertaken to reduce supply chain risk. “I think manufacturing will be done closer to home mainly due to necessity but also for brands to react quickly” to post-coronavirus shifts in market sentiment.
If it happens, such a shift will not be good news – and nor should it be welcomed by consumers who tell themselves they want to promote human wellbeing when shopping – according to another UK consultant, Clothesource CEO Mike Flanagan.
He argues that making fast fashion or foreign sourcing the “scapegoat” of Covid-19 generated woes will make matters worse.
“It risks causing more human misery than the infection itself” by passing onto the “world’s poorest [garment making] countries the most savage economic consequences of a disease that so far seems largely confined to the world’s richest.”
Instead, he thinks fast fashion will adapt rather than disappear. First, retailers will clear their unsold inventory: “Entrepreneurs might try lots of pop-ups, using parcels of otherwise unsellable garments from that clothes surplus mountain, combined ingeniously, through otherwise unusable town centre retail premises.”
During the late 1940s and 1950s, “massive merchandise overhang” created by demobilisation following World War Two sparked the creation of army and military surplus stores. Flanagan predicts “a brief revival in similar formats – and, as lockdowns soften, more and more imaginative uses of retail space to combine sales effectiveness and profitability.”
This might spark “lots of dynamism in how stores and websites are laid out for merchandisers with a gift for showmanship – and a supply system that can twist garments quickly to consumer fads.”
And looking forward, he predicts that even if supply chains simplify, that “doesn’t mean the same season-neutral winter jackets all year round, but small-scale ateliers adding grace notes to bulk clothes made in Bangladesh or China – and possibly changing them into different grace notes six weeks later.”
Robert Burke of Robert Burke Associates, a New York-based retail consultancy, thinks some brands may use Covid-19 as a reset button, pushing them away from traditional wholesale business models and sharpening their focus on direct-to consumer and setups where they control their own space and inventories within surviving department stores.
When the dust settles, he says, it will be brands, not retailers, that will lead the way. “The bigger brands were already learning to be more flexible, with deliveries to their own stores, and the brands usually know how to run retail better than the department stores.”
This will enable them to respond to changes in demand as the pandemic subsides, which Burke predicts will see designers reducing the collection process and consumers seeking more longevity in purchases.
“It is a different type of fashion industry. The designers are taking a hit. None of us has seen anything like this in our lifetime. The fact is that we didn’t see this during 9-11. We saw an impact to business, but it was nothing like this. In the end it will sort itself out – but it’s going to be a painful realignment.”
With additional reporting by Poorna Rodrigo and Ed Zwirn.