COVID-19 — And the Global Fashion Industry – Dramatic Impacts – And Good News
Posted on March 31, 2020 by Hank Boerner – Chair & Chief Strategist#Business & Society #Corporate Citizenship #Corporate Governance #Corporate Purpose - Virus Crisis #Corporate Responsibility #Corporate Sustainability #Sustainability Professionals
By Jesse Velazquez – GRI Report Analyst Intern at G&A Institute
Good news in the midst of bad news — emblematic of the COVID-19 crisis environment.
#7 in the Series – Excellence in Corporate Citizenship on Display in the Corona Virus Crisis
The impact of the coronavirus on the fashion industry has been felt at the height of the season’s fashion month with fashion show events from Giorgio Armani, Prada, Gucci, and Versace, to name a few, cancelled across the world.
In the midst of the bad news there is also welcome news of excellence in corporate citizenship from the industry. We bring you this wrap-up.
Sharp decreases in sales and revenue loss with global brands like Nike and Uniqlo closing store locations and experiencing major supply chain disruptions with many factories operating out of China, Italy, and France having to close.
The troubling news:
Some retailers, such as Victoria’s Secret, have also had to temporarily close their e-commerce sites.
Reported earnings are stark across the board, with names like Ralph Lauren reporting a decrease in sales by an estimate of US$55 to $70 million dollars.
Capri Holdings — which owns Versace, Michael Kors, and Jimmy Choo brands — experienced a revenue loss of US$100 million dollars, according to CNBC.
Fashion retailers took major hits in the stock market with companies like Gap Inc., down 11.8%; J.C. Penny, down 12.1%; and Nordstrom Inc., down 11.4% (to name but a few).
Smaller fashion brands are unable to weather the financial losses of the pandemic. Los Angeles fashion brand Bldwn had to go directly into Chapter 7 bankruptcy, liquidating assets and letting go of its entire staff.
There are others that have also had to file Chapter 7. Chanel, a major fashion house, had to halt its productions in Italy, France, and Switzerland for the next 2 weeks — but announced its workers will still be paid.
Looking Creatively At the Way Forward
In the midst of all the turmoil, the fashion industry is looking for creative ways to move forward, such as staging fashion shows on Facebook Live and stepping up their philanthropic efforts in their impacted communities.
The Good News
Here are just some of the contributions to COVID-19 relief from the global fashion industry:
Giorgio Armani has donated 1.25 million euros to hospitals and institutions in Italy, and Versace contributed about $144.000 to the China Red Cross Foundation.
LVMH — which owns Dior, Fendi, Louis Vuitton, and Givenchy — is using its perfumes and cosmetics division to produce and distribute hydroalcoholic gel (free) for French hospitals. They also announced that they will be supplying French authorities with more than 40 million face masks in collaboration with a Chinese manufacturer.
Ralph Lauren pledged $10 million dollars to be split among World Health Organization (WHO) COVID-19 Solidarity Response Fund and CFDA’s “A Common Thread” project, among others.
Gucci is donating 2 million euros to COVID-19 efforts. This is split between the Italian Civil Protection Department (Gucci is based in Italy), and through a matching Facebook campaign for the WHO COVID-19 Solidarity Response Fund. Gucci also pledged to make more than 1 million protective face masks.
Nike had announced that it will donate $15 million dollars in COVID-19 relief efforts in communities both in the US and abroad where Nike employees live and work. It has also recently announced that it is prototyping a face shield to help protect healthcare professionals.
GAP Inc. announced that it will use its factories to make gowns, masks, and scrubs for healthcare workers.
Prada is one of the latest high-end fashion brand to announce that they will produce 110,000 masks by April 6th..
As businesses are able to reallocate their personnel, assets, and networks to support the communities that support them in times of crisis, there are strong signals that the private sector has the capacity to not only transform business to be more resilient to change, but also our communities, and society.
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Note: Along the lines of this wrap-up, Hank Boerner highlighted Estee Lauder’s actions in the Excellence in Corporate Citizenship Series on Display in the Coronavirus Crisis blog – on March 25, 2020.
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Jesse Velazquez is a GRI Report Analyst Intern at G&A Institute. He’s a career managers in retailing with leading organizations and stepped down from his management role to pursue a degree in Environmental Sustainability (full-time) and now analyzing corporate sustainability / responsibility disclosure & reporting at G&A.
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G&A Institute Team Note
We continue to bring you news of private (corporate and business), public and social sector developments as organizations in the three societal sectors adjust to the emergency.
The new items will be posted at the top of the blog post and the items today will move down the queue.
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