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What happened?
This week, three independent designers announced they are shuttering their brands. First, Mara Hoffman, then Calvin Luo. A day later, The Vampire’s Wife. Three’s a trend — and it’s not a good one.
Founder Mara Hoffman says her choice to shutter was the result of years of consideration. Hoffman’s commitment to sustainability — and independence — rendered continued operations near-impossible, she says: “The reality is that the demands that are on a small company financially make it almost impossible to be privately held and run after a certain point.”
Chinese designer Calvin Luo, who has shown in New York, Paris and Shanghai, is putting his label on hold after 10 years to “learn, explore and truly experience life”, he said in a statement.
And for The Vampire’s Wife founder Susie Cave, it came down to the brand’s reliance on wholesale. Matches owed The Vampire’s Wife £32,205 when it went into administration, according to a filing on Companies House. In Tuesday’s announcement, the brand cited the upheaval of the wholesale market as the reason for shuttering. The Vampire’s Wife also had a tough time during the pandemic, struggling with debt and taxes. It settled its debt but came out of the bind to a fraught wholesale landscape.
This year, other indies hit hurdles. Both Puppets and Puppets and Mia Vesper announced intentions to stop ready-to-wear and pivot to accessories and jewellery, respectively. And London’s Roksanda found a white knight last week, shortly after filing notice of intention to appoint administrators.
Why does it matter?
Losing star creative talent is a blow to the fashion industry. And the quick succession of these three announcements brings into focus a much larger, systemic industry issue: for a fashion brand to remain independent and viable is near-impossible — even if it has critical acclaim. (Recall Christopher Kane went into administration last year, a shock to many industry fans.)
As the retail crisis boils over thanks to a combination of wholesale collapses, still-inflated operational costs and trickle-down pandemic struggles, might this week’s three be among the first of a larger succession of dominos to fall?
“The news that a brand, or in this case several, has not made it always fills me with sadness and is a stark reminder that no matter how established a brand can seem from the outside, external factors, in particular cash flow, can bring a business to its knees over time,” says Ida Petersson, founder of brand creative agency Good Eggs and former Browns buying director. Recalling conversations with brands over the last 12 months, she says many are feeling the heat.
In the midst of the luxury e-commerce crisis, it’s easy to attribute this seeming unravelling of independents to the demise of Matches. Hundreds of brands are owed thousands of dollars, stuck between a rock and a hard place. But as Vogue’s Sarah Mower told Vogue Business: “What’s happened at Matches isn’t something that can be seen in isolation. It feels like a bellwether for what’s happening across the industry.”
Wholesale is a core issue. It leaves brands vulnerable to whatever bind a given retailer may wind up in, and many multi-brand retailers have struggled. Insolvency practitioners at FTS Recovery (which is working with the British Fashion Council in the wake of the Matches administration debacle) have flagged that impacted brands are at risk of going into administration themselves. Buyers’ slashed budgets over the last 18 months have hardened the blow.
They drive a vicious cycle, Petersson says. “The cuts affect not just the outgoings but also the creative process. The designer doesn t have enough bandwidth to run the business and develop strong newness — which in turn means further cuts the next season or even getting dropped completely.”
In recent months, brands have learned the hard way never to put all their eggs in one basket. “Although [brands] are acutely aware of the need for a cash flow buffer, it is sadly not possible when most or all of their production costs need to be settled before receiving payments from their retail partners, thus putting even more pressure on timely payments,” Petersson says.
Running a brand not reliant on wholesale is hard: DTC is expensive, digital advertising doesn’t offer the return it once did (plus, it’s harder to target consumers online anyway, given more stringent regulations on third-party data) — and brands’ budgets are more shoestring than ever as they continue to reel from the impact of the pandemic.
Independent brands’ instability leaves the wider industry vulnerable, too. Rental platforms, for instance, are heavily reliant on indie brands. The likes of The Vampire’s Wife and Sandy Liang crowd British resale sites like Hurr and By Rotation. These labels sit squarely between the LVMH and Kering brands (which rarely appear on such platforms) and fast fashion (also rarely out for rent).
Designers need industry mechanisms to support both their DTC and wholesale endeavours. During the pandemic, such support programmes emerged. Though these were vital, Petersson says, many were one-off cash injections. “Many brands, once you have fallen below the line, need longer hand holding, and sadly, there are still not enough options for long-term support available to protect brands in need,” she says. “Simultaneously, there is also less excitement and desire from financial investors to step in, which is hurting the industry and its designers further.”
Also this week, Richemont announced that AZ Factory, the platform conceived to house collaborations under late designer Alber Elbaz, will no longer operate as a fashion brand with retail operations. But it’s not disappearing altogether: an educational programme for independent designers will remain, called the AZ Academy, sitting under Richemont’s Milan-based corporate school Creative Academy (in partnership with Rome’s Accademia Costume Moda fashion school). It points toward the need for industry fixtures to step in to provide a lifeline.
“Sadly, I think this year we will hear more news such as what was announced this week, although I hope that our industry’s financial supporters see this as a sign to step up further to help as many designers as possible,” Petersson says. “Moreover, we all need to remember that sometimes even simple pieces of advice can help shift someone’s path. I urge our industry to give more of ourselves during this time as the brands need all the help they can get.”
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