fashion

A Few Reasons for the Fashion Industry to Be Optimistic

Written by IhebQld

In the dog days of August, when there isn’t much on the fashion calendar, let’s look at some reasons to be optimistic heading into the fall.

1. The pandemic supply-chain hangover is clearing up. Fashion’s long logistical nightmare may be on its way to being over. Shipping costs are falling along with fuel prices. The number of container ships waiting to drop their cargo at Los Angeles and Long Beach, California, America’s two busiest ports, is down to about a dozen, from a peak of 100 in January. True, congestion is worsening in Europe and the US East Coast, and a potential strike by West Coast dockworkers could throw global logistics into chaos again. But if the trend holds, it would be a game changer for retailers, which would be able to better predict when inventory will arrive and what it will cost to get from factories to stores and warehouses.

2. E-commerce normalisation isn’t a bad thing. Nobody expected the pandemic’s online shopping boom to last forever, but the rapid swing back to the pre-Covid norm took many in the industry by surprise. What tends to be forgotten is that the pre-pandemic trajectory – where e-commerce grabs a couple percentage points more of consumer spending each year, rather than suddenly swallowing the entire retail market whole – seemed pretty good back in 2019. Many retailers are also in a better position to capitalise on this more orderly transition. Digital brands have been forced into finding the quickest path to profitability as investor funding has dried up, and traditional retailers will have more time to ease into a hybrid digital-physical future. Speaking of which …

3. We’re in the middle of a renaissance for physical retail. Stores are the hot new investment for many brands, from emerging labels opening their first outposts to digital brands with ambitions to open hundreds of shops. Luxury brands such as Gucci see more stores as the key to growth. Brands that aren’t ready or able to pursue a brick-and-mortar strategy on their own are entering wholesale partnerships to get their products in front of customers in the real world. Even department stores are finding new uses for spaces that once seemed like massive liabilities. There’s already evidence these efforts will pay off: traffic in apparel stores is up 19 percent from a year ago, when Covid-19’s Delta variant was in high gear, and even up 4 percent from August 2019, according to Cowen. Expect to hear plenty about this when a host of retailers report earnings this week: Urban Outfitters, Macy’s and Nordstrom on Aug. 23, with Farfetch, Affirm, Ulta Beauty, Coty, Victoria’s Secret, Abercrombie & Fitch and Gap Inc. two days later

4. (Some of) the brand turnarounds are working. J.Crew is making headlines for the right reasons again. Coach, Ralph Lauren and Michael Kors have to varying degrees successfully convinced consumers they’re worth paying full price for. Down-on-their-luck DTC brands are exiting poorly conceived side projects to focus on their core offerings. Gap’s Yeezy experiment still feels more like a distraction than a true rebound strategy, but the company’s long-suffering Banana Republic brand is showing signs of life. We’ll get updates on those two brands, plus Victoria’s Secret this week.

5. The travel rebound is real. Fashion executives must be loving all those news reports depicting frustrated crowds packed inside international airports. Many of those angry travellers are taking their first vacation in two years, and spending accordingly once they finally reach their destination. Tourist numbers will dip along with temperatures, but they are reassuring to brands worried that consumers will trim spending due to inflation or recession fears. The wild card as always is China — there’s no indication the country is ready to lift its ban on non-essential international travel, but the fashion industry is eagerly awaiting the windfall when it does.

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