According to The Australian Fashion Council’s, (AFC) most recent member survey, during the peak of the Covid-19 pandemic, local businesses reported a fifty-six per cent (56%) drop in online sales and a gargantuan eighty-seven per cent (87%) drop from in-store sales – proportionately fashion retails biggest disruption since the global financial crisis in 2008.
The Covid-19 pandemic havoc evidently has the fashion industry by the throat, majority of the industry’s supply chain remains on hold after months of begrudging hibernation. Governments in second world countries have shut down the major manufacturing hubs; including Bangladesh and India. No matter what country you’re in, ninety per cent (90%) of bricks and mortar retail stores closed their doors – next step transforming online sales solutions. Thousands across the world are out of work; companies left with a whopping amount of brand new stock and the industry in limbo.
Forbes reported in America ‘merchandise that was on the shelves and racks when stores closed, mid March, is worth less than fifty per cent (50%) of its original value, and will (if not already) drop to ten per cent (10%) of its original value.’
According to the Commonwealth Bank of Australia (CBA), as of April 3, spending on clothing and footwear dropped a staggering sixty per cent (60%) compared to this time last year.
There’s an underlying issue rapidly multiplying day after day while shopfronts remain closed. The AFC also measured decreased in-store traffic reported eighty-seven per cent (87%) of local rag-traders declaring excess stock. Forced closures, customers isolation, and a slow in spending may see seasonal stock become obsolete. The crisis continues to challenge retailers.
And while the sector has adapted to the new online-only world, online sales cannot make up for the down-turn in retail, stores in Australia are among the longest closed world-wide. It’s hard to fathom all brand new stock since late February to April has been ageing and losing value – ultimately creating bigger problems as pre-consumer stock continues to pile up in warehouses.
Flash sales become increasingly common; some brands are drastically discounting to offload unwanted stock. However, retailers will find it difficult to offload.
No doubt the unexpected circumstances have been a wakeup call. Widely known amongst veterans, but never spoken about, flaws inhibiting industry are now widely exposed – small profit margins, vulnerable supply chains, and sole reliance on overseas manufacturing.
Optimism is at an all time high for industry’s recovery right now. This has been one steep learning curve for companies whose return on investment (ROI) relies on operating in an outdated linear system, overproduction. Because they now find themselves with an excess of seemingly worthless product and in major financial distress.
With much recent hype in the media, prompts have begun to flow thick and fast as we rethink business models. The urgency and the push has never felt more crucial! Actioning circularity, repurposing, reusing, recycling – or here’s an idea, can we produce garments designed to last and endure over time. Mending and repair services are on the cards.
During the crisis Australian companies have found a way.
The industry responded to the callout for medical personal protective equipment (PPE) and pivoted; repurposing factories to produce scrubs and protective gowns for frontline health workers, as well as non-medical grade masks for civilian use. Several highly regarded responsible Australian brands looked for options to ensure revenue was maintained. ACTA intern Eliza Sears (RMIT) spoke with these brands about their recent business pivot.
After posting a callout on Instagram for anyone in need of medical scrubs, anything made from denim for retirement or aged care facilities, or any industry partners in need of manufacturing to get in touch. Much loved Melbourne denim label, Nobody Denim began investigating how they could pivot production to include medical PPE. Managing Director, John Condilis, says he felt a sense of “urgency” to help in any way and to “get the conversation started”.
Since March, Nobody has partnered with The Royal Melbourne Hospital to produce scrubs in their Thornbury factory. John says the shift to PPE production is “not that difficult” given the skill set already possessed by the denim manufacturers. And the production of medical scrubs, gowns and masks is here to stay. Moving beyond Covid-19, Nobody Denim is keen to keep PPE production local and create a “stable sustainable industry” from its Melbourne factory.
The Social Studio
For the past two months, Collingwood social enterprise, The Social Studio has been solely producing scrubs. The Social Studio’s CEO, Cate Coleman says “we just feel so lucky to seize this opportunity, it’s all down to the flexibility and the hard work of the staff and the team being willing to do whatever is necessary,” to fulfil the need for extra scrubs.
The manufacturing of scrubs has meant continued employment for the production team throughout the crisis, with the makers producing scrubs from home, with a total of 233 sets made so far; in addition, 30 were donated by generous members of the public looking to contribute in some way.
As for post Covid-19, Cate says the team is “probably most looking forward to us safely reestablishing face to face classes in our fashion school,” and reinstating a sense of “community and camaraderie” in the Smith Street space.
Melbourne based circular fashion label A.BCH began production of ‘dust masks’ in late March, as a free gift with online sales. Founder, Courtney Holm says customers “have been grateful for the gift we have given them”. The label has also provided an open source pattern for customers to produce their own masks from home.
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Co-Author by ACTA Intern Eliza Sears (RMIT Journalist Student) & ACTA CEO/Founder Camille Reed