How COVID-19 is Affecting London’s Emerging Designers

Few in the industry can deny the role of London Fashion Week among the big four: it’s a vibrant showcase of the most creative and innovative body of designers, especially start-up brands. The British Fashion Council (BFC)’s Annual Report of 2019 acknowledged this international reputation that has been built on a broad strategy of investment chiefly in education and mentoring as well as a range of funding bursaries available to young designers.

From the globally recognized NEWGEN Scheme, to independent initiatives such as Fashion East and the Queen Elizabeth II Award, these scholarships illustrate London’s solid support structure for start-ups. Little wonder global contests such as the LVMH Prize and The Woolmark Prize are dominated with British finalists. London too has become a draw for innovative voices from China too. In recent years names like Xu Zhi, Yuhan Wang, Steven Tai, and Feng Chen Wang have all chosen to locate their brands within close access to London’s financial resources. However, when a global pandemic strikes, where does an industry partially reliant on early career backing stand?

Most young London-based designers affirm their businesses are carried largely by the retail sector abroad. Moreover, this overseas turnover through wholesale relies largely on the physical retail sector. With boutiques seeking out uniqueness and newness to offer their clients in an already saturated luxury marketplace, independent and overseas retail stores are often the first to invest in young designers. They value their fresh vision and small stock list base as attractive points of difference and exclusivity. The reputation of London as a melting pot of exciting talent furthers this desire for emerging British labels abroad. Jing Daily asks local UK experts and leading brands in London how these designers can foolproof their businesses at this time.

Challenges for emerging brands 

According to the UK Fashion & Textile organization, a key advisory board for design businesses in the UK, UK businesses are facing an unprecedented climate. Their advice circulates around sales and supply — identifying areas that could be affected and to recognize opportunities to diversify across international sources and internal resources. As start-ups, young designers in London accept they must adopt multiple streams of income to support their businesses. At this time however, the dramatic effects of COVID-19 is cutting off many of these supplementary avenues.

Phoebe English — whose design business of 9 years has been championed by Chief Vogue Critic Sarah Mower for its sustainable dedication and direction — noted the direct impact that COVID-19 has had on her company’s revenue ability: “As a small company we do not hold much buoyancy and right now our three streams of income have been deeply affected: our wholesale business; university lecturing; project consultancy. All businesses such as ours are all trying to find resolutions.” For Feng Chen Wang, this reliance on revenue streams is supremely dangerous for brands: “When one of our markets is impacted we must rely on the other. Most young brands focus on the wholesale model, but when that slows down it can damage your business, so we must look at other revenue stream like DTC.”

Another challenge facing brands is the wider global economic uncertainty. Deloitte’s ‘Retail Trends 2020’ Report from 2019 confirmed the slowest rate of spending growth since 2010 — largely driven by British doubt. Since the outbreak of COVID-19, this uncertainty has heightened, turning to an apathy for consumption as spending figures have dropped further. Therefore, as these foreign markets shut down, developing designers will feel the impact even sooner as risk averse buyers and consumers back brands they know.

For some brands at this time the possibility to even produce a collection to show buyers will be deeply hindered. Fashion PR consultant, Laura Hinson, former head of the BFC’s designer relations division, built her career on supporting designers and brands at the start of their careers. She agreed that production was an additional factor crippling young labels. “From production timings which have been delayed or even cancelled if their factories are based in China or Italy — COVID-19 is having a devastating impact on emerging designer businesses in London. Sell-through will also be affected as customers are steering clear of stores: SS20 will be a difficult season for everyone,” she said.

These challenges mentioned by Hinson, are outlined in McKinsey’s Executive Briefing on COVID-19’s implications for businesses, which predicts they will unfold in three broad economic scenarios: a quick recovery, a global slowdown, and a pandemic-driven recession. While the report suggests a more pessimistic economic outcome is being expected by the global trade industry generally, the impact on London’s niche ecosystem of young designers specifically will likely be large.

What London brands can do to keep afloat 

As we have already seen in China, people simply do not want to buy in times of uncertainty. Therefore, what options are available to designers in order to effectively maintain their business as product essentials become prioritized and the luxury industry takes a hit. Leanne Elliot Young, founder of CommuneEAST — a strategist for the creative industries — was clear, stating, “The globe will not be purchasing, will not be producing, but will just be concentrating on how to stay safe: the industry and the economy will pause and be gridlocked.”

If people are simply not buying, the knock on effect for retail businesses and the stocked brands will be catastrophic. Young continues, “Smart retailers have pivoted and built an omni-channel business that services both arenas in unison. If any designers are stuck in the sale or return structure then it will see an exponential rate of folding of small businesses and brands in London.”

At the start of their careers, many of London’s most exciting brands will be tapped by Stavros Karelis, owner of the independent luxury store Machine-A in Soho, London. Karelis is adamant that emerging brands now need to pivot 360 degrees to engage their business in a totally different manner. “Emerging designers are called to resolve one of the most challenging issues that the world has ever faced; how to offer that physical experience in an online and digital format. This alone will force them to rethink all existing business models. They have to figure out how to connect with their buyers, and their end-consumers, and how to make sure their digital world is able to satisfy the needs of the customers who in most cases need to see them up close.“

Hinson agrees that the opportunity offered by online for London’s creatives needs to be rethought. “I believe there is some potential in growing online sales by speaking to the consumer innovatively through social media and marketing. It is imperative to open new avenues of communication with our audience and collaborators,” she says.

This has been a focus for the likes of Chinese designer steventai, whose longtime dedication to film as a means of communication allowed for him to secure over half of his SS20 collection sales. By filming each garment on models, he was able to give a sense of fabrication and details which was shared to all the buyers who weren’t able to make it to Paris.

Other London-based Chinese designers are also attempting to bridge this gap with film. Yuhan Wang held her first standalone show in SS20 and released a fashion film to accompany the collection’s launch as an opportunity to capture the senses in an effort to drive online sales. Xu Zhi also used film to enter into the London Fashion Week schedule — introducing his brand to an audience unfamiliar with his label. The power of authentic storytelling direct to consumers has huge potential for emerging companies.

Deloitte’s Retail Trends 2020 cites purpose as the new digital. This digital purpose presents an opportunity to think global yet act local: building and investing in brand communities and fostering authentic levels of diversity and inclusivity. The power of film for Feng Chen Wang has been her ability to demystify the manufacturing process for her stockists and supporters alike, in particularly the sustainable aspects she has come to integrate. Brands that have a cause have more meaning in the eyes of consumers.

Cross collaboration will be vital in order to share resources, skills and audience, while there will be an overriding call for a spirit of innovation. If emerging brands are to bring a tighter focus on online communication opportunities as a way to ensure revenue, they need to ensure a tightened turnaround on their production. Manufacturing closer to home could present this answer.

The lack of nearshore in the UK has disadvantaged its designers for decades. By contrast China has easy access to its supply chain, with many designers in China backed by family factories, such as womenswear designer steventai. London menswear Liam Hodges who is exploring the possibility, said, “We are already looking to bring some new season sampling and development back to the UK so we can maintain some momentum and focus on our own ecommerce, offering exclusive styles to our dedicated customers supporting us through our own channels.”

In a time of crisis, relatability, clarity, and transparency become vital to a brand. The emerging designer has a peer group, a point of view, and a following that is about not just the clothes but the energy of the brand itself. This is the time when brands can bring their fans with them, through the anxiety of a crisis and beyond. Moreover, this sense of fragility can be turned to strength. Karelis points out that the more agile a brand is the faster it can adopt. For now, we can only hope and show that we are all in this together. As Karelis concluded, “When you are in the toughest place and time in history you are with everyone else. So everyone supports each other, and solidarity is the key element to rebuild and move forward.”

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