Companies including The North Face, Patagonia, REI, and Eddie Bauer have thrown their support behind a campaign calling on businesses to pull advertising from Facebook and its Instagram subsidiary through the end of July over allegations that Facebook enables hate speech online.
On June 16, Matthew Williams, whose fashion line, 1017 ALYX 9SM, has made him a rising star in the industry, officially became the new creative director of Givenchy, the French label owned by luxury giant LVMH. If history is any indication, profits should grow under his tenure until peaking about four to five years in, at which point their growth will start to fall.
On June 15, when non-essential retailers in England reopened for the first time since the country imposed a lockdown in late March, it unleashed a wave of pent up demand. At Primark, a Dublin-based clothing retailer, giant lines formed to enter its stores. For many shoppers eager to buy its super-cheap clothes, it was the first time in months they could get them, since Primark still doesn’t sell online.
Hooray! The coronavirus-induced devastation of US retail was less bad than expected in May.
In August 2019, Reebok held an all-staff meeting at its Boston headquarters with several board members from its parent company, German sports giant Adidas. The board members, including Adidas CEO Kasper Rorsted, were there to give Reebok employees a general update, but also to answer questions submitted anonymously by employees ahead of time.
Since widespread protests began in the US condemning the historic and ongoing police killings of Black Americans, retailers of all sorts have been pledging their support to the Black community through social-media posts and donations. Less common, however, have been longer-term commitments.
Amazon has had its share of missteps during the Covid-19 crisis. Employees have warned that safety protocols at its warehouses were inadequate, and its ordinarily ultra-efficient logistics and delivery operations have struggled to keep up with a wave of demand. But the e-commerce juggernaut has rumbled on, and it looks positioned to emerge from the pandemic even stronger.
After protests broke out around the US condemning the police killings of George Floyd, Breonna Taylor, Tony McDade, Sean Reed, and the long history of violence against black Americans, Adidas—like numerous other companies—took to social media to share a message of solidarity. The sneaker and sportswear company posted an image on Instagram of the word “Racism” crossed out, with text calling for unity in fighting injustice. “Take action,” the caption read. “Things won’t change unless we create that change.”
Corporations of all sorts are condemning racism and voicing their anger at police violence against black Americans while protests over the killings of George Floyd, Breonna Taylor, Tony McDade, Sean Reed, and a legacy of others roil the US. Companies from Amazon to Under Armour have issued statements on social media proclaiming a vague need to stand together and calling for an end to racial inequity.
The coronavirus pandemic has ripped a hole in America’s retailers, but the country’s budget chains and mega-stores have fared much better.
As the biggest retailer in the US, Walmart is also one of the country’s largest sellers of clothing, much of it low-cost basics it peddles at its nearly 5,000 brick-and-mortar stores. But for some time the company has also been trying to make a name for itself selling more design-driven items, especially online.
Even before the pandemic, many US malls were in decline. Years of developers overbuilding shopping centers resulted in a bubble of retail space that ultimately burst. While high-end malls filled with activities and restaurants still draw visitors, the rest often struggle to lure shoppers as their stores lose relevance and US consumers buy more online.
It was a given that Macy’s would take a substantial hit from Covid-19. Still, the size of that hit has been enormous.
In 1965, the American TV show Gilligan’s Island aired an episode titled “So Sorry, My Island Now.” It follows the show’s castaways as they encounter a Japanese soldier, or a racist caricature of one anyway, who doesn’t realize World War II has ended. As is often the case with stereotypes, it says more about how Americans viewed Japan at the time than about Japan itself: In America’s eyes, it was still the militaristic aggressor, the country that colonized Korea, invaded China, and bombed Pearl Harbor, drawing the US into war—and deserved to be mocked for being on the losing side of that conflict.
Walmart has almost 5,000 stores in the US, which may seem like an obvious drag on its business when much of the country is sheltering in place, but that huge network of stores is helping drive the retailer’s e-commerce amid the pandemic.
Covid-19’s devastating effect on the American retail industry should have US officials on alert.
Earlier this year, when Covid-19 shut down much of China, fashion supply chains slammed to a halt. It wasn’t just because China is the world’s largest clothing producer, accounting for about 32% of all clothing exported in 2018 based on World Trade Organization data—nearly five times the share of second-place Bangladesh.
Amazon may appear unstoppable, but there’s at least one segment of retail it has never quite been able to conquer: high-end fashion.
The fashion industry is ruled by giants—mega-corporations from fast-fashion behemoths Zara and H&M to luxury titans like LVMH and Kering, which between them own brands including Louis Vuitton, Gucci, Dior, and Saint Laurent. These are publicly traded companies with tens of billions in annual sales, and they make most of the industry’s profits.
In mid-March, as Covid-19 spread through the US, upscale department store Nordstrom announced it would close its stores in the US, Canada, and Puerto Rico to help slow the outbreak. Those stores included all 116 full-line Nordstrom department stores in those regions. Sixteen of those shops, or nearly 14%, will never reopen, the company said on May 5.
The calendar followed by much of the fashion industry doesn’t make any sense. In August, when summer is blazing in the northern hemisphere, clothing for cold weather begins to arrive in stores. In February, as much of the world is in a deep freeze, warm-weather outfits start hitting racks. To clear space for the new arrivals, retailers put clothing that’s actually seasonally appropriate on sale, eating into their margins.
If there’s one country luxury businesses can’t live without these days, it’s China. The importance of Chinese shoppers to the industry became plain when Covid-19 shut down much of China and its outbound travel in February. Without those customers, luxury companies saw their sales plummet.
When we talk about loyalty in commerce, what we’re really talking about is whether customers are loyal to specific companies. We gauge this customer loyalty with measures such as the share of their spending they dedicate to products from those companies.
Clothing chain J.Crew has filed for bankruptcy protection. Like numerous other retailers, the peddler of preppy classics has seen its business suffer during the ongoing Covid-19 outbreak. Fashion has been hit especially hard. In March, sales at clothing stores were down more than 50% versus the prior year.
