Minimum guarantees, manufacturing challenges and COVID-19’s impact on the fashion industry among topics discussed.
With three billion people in self-isolation around the world and COVID-19 changing how we work, my mood was uplifted yesterday (April 2) as I held our first digital Products of Change Group meeting.
It was wonderful to see so many people working from their ‘new found offices’ and using local resources to cheer up the crowd. Yes Dean (Greasley of TDP) has his fancy dress box in his office and I just loved Kate French’s (of Hasbro) jumper.
After being interrupted by my five-year old and her pulling down a shelf in my office by accident… we finally got to business and discussed how COVID-19 is affecting people’s businesses. While protecting their companies’ cashflow is seen as paramount in order to survive through this time, there was another common thread of a different nature.
This enforced situation is giving people time to pause and look at their business in a different way. Being still and realigning what is important is already having a profound effect on people’s lives and sharing moments of togetherness (even if virtually) is really valued.
A key topic of conversation was how large licensors and agents are keeping in very close contact with their partners to assess minimum guarantees and advance payments, many moving payments to the back end of the year, 2021 or scrapping them altogether.
It’s great to know that protecting their partners’ business is high on the agenda, as it is those partnerships that are fostered in this difficult period that are likely to emerge positively when we start to recover.
Manufacturers in the group relayed how they are effectively bypassing Q2 and putting all their efforts towards a positive Q3/4. And with manufacturing in the Far East back up and running there is indeed hope for a positive A/W.
Unfortunately, the general consensus from the meeting is that the fashion industry is up for an increasingly tough time, with countries such as Bangladesh and Pakistan likely to be hit extremely hard as the virus takes hold there. Being such poor communities and the factories receiving no support from the government, the feeling from the group is that there will be a huge amount of disruption that will take many months to recover.
There was, however, some positive news from the meeting, with ‘Change Plastic for Good’ being part of a lobbying committee to government to drive standards around plastic kitemarks. It was good to hear how Cartamundi is heavily reducing its single use plastic usage in packaging. TMSW, too, is cutting down its plastic polybag usage as well as some great transference of knowledge across partners for alternatives to polybags, plastic kimble tags as well developments with alternative substrates to plastics, such as sugar kane).
Never have we experienced such disruption in business (not even the crash in 2008 was this bad), but due to climate change and many other factors disruption at this level might become our norm. It’s up to us now to understand how we protect and futureproof our businesses and the industry to operate in the new future, together I am sure we can navigate this and turn the virtual to reality.
The next Products of Change Group meeting will be held virtually on April 22.
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