How do fashion brands survive the global pandemic?
For many wholesale companies, the writing is on the wall that they must leave or terminate a good percentage of their employees, and for those left over, provide salary deductions in connection with the pandemic and thousands of store closures. Some manage to keep employees in place because they proceed with caution.
As stores continue to expand closures and leave employees throughout the company at retailers such as Saks Fifth Avenue, Macy’s, Neiman Marcus, and Nordstrom, fashion brands have taken the steps necessary to measure operations in this critical state.
As reported, G-III Apparel Group said last week that they had left around 60 percent of the wholesale operations segment employees, effective April 6. And its top executive, Morris Goldfarb, chairman and CEO, and Sammy Aaron, vice chairman and president, agreed not to receive an annual salary, and top executives agreed to a 40 percent reduction in their annual salary.
In addition, the basic annual salary of other senior personnel will be temporarily reduced by 10 percent to 40 percent, depending on salary levels.
Capri Holdings said Monday its top executives, including John D. Idol, chairman and CEO; Michael Kors, creative head of Michael Kors; Donatella Versace, chief creative officer of Versace, and Sandra Choi, chief creative officer of Jimmy Choo, have voluntarily chosen to relinquish their salaries for fiscal year 2021, and the company will explore opportunities to reduce overall salaries at various levels by around 20 percent.
Among other companies, Ramy Brook said that they had spewed all 45 employees, Tibi fired employees, Rebecca Minkoff fired all wholesale employees, and Elie Tahari was completely shut down, as reported, despite her website, Elietahari.com, is still operating. Lafayette 148 said it asked its employees to take a 15 percent pay cut.
PVH The Corp said it had taken an interest in spending and reduced or canceled discretionary expenses and variable costs in many fields to navigate successfully and remove pressure from business. “This includes our marketing expenses, although we continue to invest in our digital business, because this is an important channel for us to maintain our connections with our customers and to transact globally with our customers,” Manny Chirico, chairman and CEO, said in a call. income last week.
Many sports clothing companies declined to comment, saying that their plans were still being formulated, and the picture seemed to change every day. But some provide insight into how they proceed. Many sportswear companies are working hard to turn April and May merchandise into shipping later in an effort to save inventory. And companies take advantage of their e-commerce operations to move spring merchandise, often at discounted prices.
According to Deborah Weinswig’s Coresight Research weekly report on April 5, during physical closure, he said most discretionary requests would still be online, although important retailers such as large traders remained open and would continue to sell non-food items in stores, capturing some residual requests. “How much discretionary requests remain during such closure is not yet clear, but we hope to be significantly depressed,” Weinswig said.
In the U.S., e-commerce will capture about 22 percent of all non-food sales by 2020, if a coronavirus outbreak does not affect events, according to Coresight Research estimates from Census Bureau data.
“We expect much lower demand (even online) in categories such as clothing, some beauty categories and some household goods, due to lack of needs by consumers who are stuck at home and lower interest from hard hit buyers,” Weinswig writes. He said e-commerce would see some benefits as a transfer of sales from closed stores, but with pressured demand, “we did not anticipate online sales to be near the value of in-store sales and that most sales based on stores would be lost or postponed, “Weinswig said.
Brands, meanwhile, adjust their staff levels.
Jane Siskin, CEO of Jaya Apparel, who owns Cinq à Sept and Likely, said, “Despite all the uncertainties in the world today, it has never been clearer that we have two great brands, the biggest team in the industry and great business partners throughout the world. We have faced difficulties before and struggled to overcome them at any time.
“It is our commitment to get out of this other side, stronger and better than before. “To do that we have to make some serious and painful decisions that include staff members’ leave in our offices in New York and Los Angeles,” Siskin said.
Anthony LoRusso, senior vice president of wholesale at Eileen Fisher, said the company must also leave employees and reduce salaries.
“Our employees are top priorities such as the vitality and purpose of our company. Given the current challenges we all face and the retail climate ahead of us, we must review all areas of the company side of the company to determine what is needed today, including wholesale. The decision to take time off, reduce salaries and in some cases reduce the scope have all been part of the steps we have taken to safeguard the health of our company and to maintain our work in the future, “LoRusso said.
Specifically asked, he said, “We must take responsibility the impact of this crisis on our business. Through the lens of our values, we determine what work is important at the moment, and how best to influence these focus points in order to survive. Now, more than ever, access to health care is very important and we make our decisions so that all our employees will have ongoing access. To do this, we must reduce or reduce the scope of work by more than half of our employees, and reduce salaries for those who work full time. “
Some companies keep their employees.
In a statement from Veronica Miele Beard and Veronica Swanson Beard, one of the founders of PT Veronica Beard, they said: “We struggled like others during this difficult time. Our first priority is our well-being Veronica Beard team and we manage without layoffs or leave. “
Jed, a luxury sweater company based in New York founded by Jed Krascella and Ashley Leeds, sent an e-mail late last month saying that in connection with the unprecedented COVID-19 pandemic and because they were operating “at the epicenter of the outbreak in the US, “and wanting to protect the safety of their colleagues and communities, they have decided to temporarily suspend the fulfillment of all orders placed through their website, Jedofficial.com.
Meanwhile, 3.1 Phillip Lim has been brought to social media to encourage people to shop online. The company runs sponsored posts on Instagram and Facebook: “For Our Friends and Family. The health of our independent business depends on the support of our global citizens. By shopping with us, you make art, innovation and the creation of beautiful products possible. As a valued member of Tribe 3.1, we want to thank you for your continued support by offering a 25 percent discount before spring and spring. “It also offers archival views of up to 75 percent.
Proenza Schouler, too, offered for the first time the curation edits last season, discounts of up to 75 percent at proenzaschouler.com. Spring merchandise is currently offered at full price on its website.
At another place, Taylor asked offers a 25 percent discount on all full merchandise on its website, along with donating funds with every purchase for five non-medical class masks that will be made in connection with the fundraising effort, while Altuzarra give a 20 percent discount on collections before spring and spring / summer on their website for a limited time. It also accounts for 10 percent of online sales to NoKidHungry.org.
On its website, Rag & Bone wrote a letter to its customers Friday from cofounder Marcus Wainwright.
“This is crazy time. You don’t really need me to tell you that. At Rag & Bone we have to adjust like everything else. We have to make some very difficult decisions to keep our company healthy. A decision that I personally think I don’t need to consider, let alone make, “wrote Wainwright.
“Because the industry where we work stalled, we have also been given the opportunity to re-evaluate who we are, what we do and why we do it … But like other parts of the world and the rest of our industry, we do our best to navigate through this … For this reason we have decided to reduce our retail prices across the board until this is finished, or until we are allowed to leave our homes and go back to work, “he wrote.
Wainwright said everything on rag-bone.com was discounted from 25 to 70 percent. The price reduction will end on May 1 at 11:59 pm, but can be extended at Rag & Bone’s policy.
While many brands rely on their e-commerce sites to help overcome the storm, it’s not without challenges.
The Row, who could not be reached for comment, has temporarily closed the US distribution center in accordance with local government guidelines, effective March 25. “You can continue to place your order and we will send it to you as soon as our warehouse is reopened,” according to the company’s website.
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