The End of Wholesale, or The Beginning of Something Better?
Thu 9 Apr
The coronavirus financial crisis is an unprecedented global event, but the pressure it is putting on the wholesale fashion system is really just accelerating problems that have dogged retailers and the brands that depend on them since the 2008 financial crisis.
It was then that wholesale became addicted to deep discounting in order to attract customers. In order to compete with each other and growing online players, retailers started ordering more exclusive products and capsule collections. Brands became frustrated by the need to deliver coats in August and spring dresses in February, only to see their products lost in a sea of fashion that inevitably winds up on sales racks.
The question now is whether the chaos of the coronavirus pandemic forces the wholesale system to address its deep-rooted issues — or drives it further to the breaking point.
“The real tragedy will be if we come out of this, on the other side, with no changes,” said Stefano Martinetto, chief executive of Tomorrow London. “If we now have a rush to the bottom with a global fight of markdowns to get rid of inventory, everybody will lose, not only wiping out a generation of young talent.”