More brands are closing in what some trend veterans describe as the worst trading environment in 25 years as a result of declining spending and widespread lowering.
Instagram comments frequently have a similar beginning. We have made the terrible decision to close our business to our most devoted consumers after reflecting on how far we have come in our product and how the present circumstances are affecting the fashion industry.
But for each American fashion company that has shuttered in 2024 – first a stream, now a wave – the path to closure has its own set of circumstances.
” We have too many brands, to many restaurants, very several choices, and we’re all cannibalising each additional”, says Kerry Pietrobon, founder of dimension- diverse brand Harlow. ” There had to be a change at some point, but it came bigger, harder and stronger than people knew”.
In April, Pietrobon told buyers of her 11- yr- ancient brand, which makes measurements 12 to 26, of her decision to close this July. She can no longer contend against frequent deals from larger brands because her customers now buy fewer items per person because of the pandemic. ” We are saying it’s a break, but I ca n’t see us coming back”, she says.
Pietrobon’s former partner, Marissa Ganino – the pair worked together at fabric shop Westco 20 centuries ago – is n’t closing her company, Tunik, but has paused production indefinitely on her Melbourne- made printed clothes to focus on jewels, which is still selling reasonably well.
” I did n’t create this brand for nothing, but I ca n’t bear to create more clothes until something ticks over”, she says.
A storm’s “flickering flame”
Many smaller fashion proprietors, including Pietrobon, say trading conditions are the worst they have been in more than 25 years. ” Three times ]since the pandemic], I thought things were getting better, then the rug would literally pull itself from under you”, she says.
If the corporate world had its “great resignation” immediately after COVID- 19, now the fashion industry is facing its own “great reckoning” as the tally of brands shuttering ( or pausing ) climbs each week.
Arnsdorf and Nique, two sustainable brands, have already closed this year. Last month, Dion Lee went into voluntary administration, to the shock of the industry. International closures include Mara Hoffman and The Vampire’s Wife, whose owner Susie Cave, the wife of musician Nick Cave, says the brand fell victim to the collapse of e- tailers such as London- based Matchesfashion.
Another factor is that clothing and footwear spending is declining; according to new ABS figures, consumers spent$ 76 million less in April this year than they did in April 2023. Additionally, major players keep offering discounts, such as department stores, and there is a faster than usual start to the winter sales. Particularly for smaller brands, customers leave feeling as though they are nowhere to go.
In a sea of heavy discounting from major brands during a cost-of-living crisis,” surviving as a small independent brand is like trying to be a flickering flame in a storm,” Pietrobon wrote last week on Instagram.
” It’s a battle against the tide, where the undercurrent favors giants over small fish like us,” says the author.” It’s not just challenging creatively, but it’s also economically suffocating.”
Nessie Croft announced the closure of her label, Corepret, last week. She claims that it’s more difficult than ever for smaller, ethical brands to succeed because Australians are now the largest consumers of fast fashion per person worldwide.
” We’re competing with fast fashion, a social media landscape that promotes over- consumption and distorts our value of fashion”, she says.
Croft, whose pieces mostly sell between$ 500 and$ 800, says making Corepret more profitable required too many ethical compromises. The idea that the only way I could expand the brand was to pump out product did n’t appealed to me.
Buy or beware
Fashion agent and consultant Phoebes Garland claims that confusing marketing messages are causing a “retail recession.”
” The messaging out there]to consumers ] is stop buying so much, that is true for fast fashion, but unless we start selling some]locally produced ] product, there wo n’t be any fashion labels left”, she says.
Garland, who has 35 years ‘ experience, says the fashion industry is broken on two fronts: climate change has delayed the start of the traditional seasons, so stock in store does not match the weather, and an addiction to discounting, especially during events such as Black Friday, has narrowed the window for brands to sell stock at full price.
In a social media post, Ganino summarises the effects of perpetual discounting:” These larger companies have devalued our creations, clothing, and everyone who works so hard to produce them. We need to come back to reality. There is nowhere left even for the largest retailers to go now that they have reignited this sale craze, which is actually falling on deaf ears because no one is actually spending.
But that’s not entirely true. People are still shopping, particularly at the extremities of the market. While the luxury sector has slowed following huge gains during the pandemic – Kering, owner of Gucci and Saint Laurent, reported an 11 per cent dip in earnings for the first quarter of 2024, while at LVMH ( Dior, Louis Vuitton ), earnings rose a tiny 2 per cent in the fashion division – the ultra- fast fashion category, dominated by Chinese company Shein, is booming.
According to Jaana Quaintance- James, the head of the Australian Fashion Council, they are also penalized when it comes to issues like import duties and taxes because they are unable to compete on price – on Shein, dresses sell for as little as$ 6.
” It’s harder than during COVID – at least then you had a framework, everyone was in the same situation and there was some government support”, she says. ” Now, it’s just very hard to predict what’s going to happen”.
Overproduction and oversupply are also contributing factors to Australians producing 300, 000 tonnes of textile waste each year. Whereas the message for consumers to “buy less, buy better” carries some weight, most people agree brands need to adopt a “make less” strategy.
” I look at brands, there’s one thousand things on the clearance area of their website – and this is not a fast fashion brand”, says Tunik’s Ganino. ” And I think, shit, what has gone on there”?
It “kind of fell apart,” it said.
Seasoned public relations executive Libby Hutton started Monte, a brand selling luxury slippers, in 2018 ( when it was known as Bertie ). While not technically a “COVID- 19 brand”, Monte took off during the pandemic, when sales of loungewear exploded.
But the success did n’t last. Monte announced its closure on Tuesday this week via an Instagram post written by Hutton.
” We grew too quickly, then it kind of collapsed, then people were n’t buying luxury items like slippers, and they ]had already ] bought them over COVID- 19 so it was the last thing on their list”, she says.
Running a direct- to- consumer footwear brand, with 11 sizes to each style, created a punishing turnover cycle for Hutton and her husband and business partner, Will, who never paid themselves a salary.
” It’s hard when you go from that massive high, and you think you will keep going up, up, up”, she says. ” We still have the fire in our belly for]creating a] brand, so we’re looking to do something else with everything we learnt”.
None of the founders interviewed for this piece have lost any of their enthusiasm for fashion, creating, and the industry. One of them is working with entrepreneurs on new fashion business models, while another is planning to relocate to the UK to further her contribution to sustainability. One founder claimed in this masthead that her greatest concern was having her business shut down when it is perceived as a failure.
Perhaps Corepret’s Nessie Croft put it best when she wrote:” It’s a beautiful thing to be at peace with an ending”.
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