This article is part of The Luxury Slowdown Survival Guide, a collection of articles that examines the recent industry downturn and the strategies brands may employ to come out of it unscathed.
When times get tough, emerging designers are usually “the first to feel the pinch”, and the current luxury slowdown is no exception. So says former Browns buying director Ida Petersson, now the co-founder of brand strategy and creative agency Good Eggs. “Retailers tend to review their terms in tough times, introducing sell-through guarantees or similar, which can put enormous pressure on emerging brands, especially if they don’t have the capacity to accept returned stock. It’s a vicious cycle,” she says.
Emerging designers across the world have reported a slew of new hurdles in recent months, in addition to the already dire straits of running an independent brand in the wake of a global pandemic and amid geopolitical tensions and a cost of living crisis. Some are struggling to find showrooms, or are losing the support of existing partners. Others are facing reduced and much more cautious wholesale buys, cash flow issues and production delays. Almost all are battling with decreased spending power and low consumer confidence in untested names.
Below, Vogue Business offers some advice on how to survive the slowdown as an emerging designer.
1. Embrace the change
It’s a 360-degree onslaught, says luxury consultant Christopher Morency. “Competing for the attention, spending power and loyalty of today’s consumer against global conglomerates with seemingly limitless marketing, retail and media budgets is an overwhelming task. Major wholesalers and global media outlets are increasingly prioritising their relationships with these larger luxury brands to protect their own business, meaning that the budgets once spread across both large and small brands are now mostly allocated to the bigger players.”
The challenge for emerging brands is not just to survive the slowdown, but to somehow capitalise on the slim opportunities it presents, continues Morency. For him, the luxury slowdown signals a deeper shift in the industry, which could see emerging brands come out on top. Early signs suggest he could be right: in an exclusive survey of almost 1,000 Vogue and GQ readers, Vogue Business found that spending on independent and emerging brands might actually be increasing as the luxury slowdown hits — often more expensive — established brands. Thirty-one per cent of respondents said they have increased their spending on independent and emerging brands in the past year. This skews slightly higher for under 35s (36 per cent) versus over 35s (28 per cent).
“In this new era, we will see a generational shift in authority, moving from editors to consumers, traditional buyers at department stores to a diverse array of sales curators (including resale platforms, niche boutiques and brands themselves), and from large-scale, mass-market strategies to more personalised, value-driven approaches,” Morency explains. “Brands that embrace this shift and understand the power of true community, direct engagement and a more sustainable approach to business growth will be best positioned for success in the future.”
2. Balance creativity with commerciality
Wholesale buyers often ask designers to tweak their designs for commercial success, but emerging designers around the world say this is ramping up amid the slowdown. They have mixed feelings about how to handle it.
For the last year, New York-based designer Rui Zhou — who became the first Chinese designer to win the LVMH Prize when she took home the Karl Lagerfeld Prize in 2021 — has been receiving feedback from her showroom partners that wholesale buyers won’t even look at items priced over $500. In response, she has been sourcing more affordable fabrics and making her garments less technically complex to bring the price down. She is also adapting her signature cutout designs to give customers more bang for their buck. Previously, a customer would have to buy two or three different garments to achieve the layered effect in her campaign and presentation styling. Now, they can get the same look through just one garment. “The response has been really positive,” she says. “Some stores increased their orders this season and we got a few new stores, too, even though most stores are not looking for new brands right now.”
In the UK, Sinéad O’Dwyer is making similar adjustments. Until now, the Hackney-based designer has produced primarily on home soil, with a high percentage of handmade pieces that make it difficult to achieve competitive prices — not least because UK suppliers have been struggling to find skilled employees since Brexit. This season, O’Dwyer is onboarding production facilities in Portugal and adapting her designs to meet the “cautious” mood among buyers and consumers, limiting handmade elements and using more black. “I wanted to work on my pricing regardless, so the slowdown has been a good opportunity to do more basics and improve the quality and the price,” she says.
3. Lean into what makes you unique
Trying to shoehorn creative concepts into commercial spaces doesn’t work for everyone. For the last three seasons, Chinese designer Louis Shengtao Chen has tried to meet buyers’ demands. Now, he’s leaning back into the avant-garde, and hoping consumers will meet him there. “I need to get back to what I’m good at, which is making characters,” he says. “We explored more commercial designs and it wasn’t bringing success.”
It’s risky for emerging designers to compromise on their vision so early on, agrees Fletcher Kasell, co-founder of New York design duo Tanner Fletcher. “At the beginning, we found ourselves changing too many things and we lost the identity of the brand. We’re more successful when we double down on our vision.”
These days, Tanner Fletcher is taking a two-pronged approach to balancing creativity and commerciality, continues Kasell. “We love to do embellishments and embroidery, but those things cost so much more now, so we think of our design strategy like a pyramid: the biggest product offering with the lowest price is at the bottom, and the smallest product offering with the highest price is at the top. The top of the pyramid — which might include putting a $6,000 dress on a celebrity — drives sales at the bottom of the pyramid, which includes hoodies and T-shirts. So you can still have those extremely luxurious pieces, but they are more about building a world people want to buy into.”
4. Focus on quality and craft
That’s not to say people have stopped buying luxury items entirely. Durazzi Milano has seen a consistent demand for high-quality luxury items, despite soaring prices. Last season, one of its bestsellers was a leather parka, which cost almost €4,000. “More exclusive and unique items are doing really well, because people want something beautiful and they’re still willing to spend if they see the value in it,” says founder and designer Ilenia Durazzi. “Buyers might ask for lower prices, but people also want something special.”
It might be tempting for emerging brands to adopt the same risk aversion as buyers, but that will only undermine their long-term success, says brand consultant Natalia Corre, founder of podcast and sales consultancy Advance Copy and author of Growing Independent Fashion Brands. Our exclusive survey of Vogue and GQ readers confirmed this: 80 per cent of respondents said they are still drawn to luxury goods amid the slowdown because of their higher quality materials, while 74 per cent cited the aesthetic, design and creativity that luxury brands offer.
“You have to consider why we are experiencing a luxury slowdown in the first place,” says Corre. “Of course there are global political and economic factors, but the fashion industry also has to take responsibility for the fatigue around homogenous luxury. The positive thing about this moment is that, if you are a courageous independent designer with a clear point of view (not just an algorithm-friendly point of view), this is your time to shine.”
5. The traditional business model is broken
Wholesale buyers have smaller budgets this season, and they don’t have the time nor the money to nurture emerging brands in the way they once did, says Corre. “What buyers are looking for from emerging brands is very different now. There is no room for risk-taking anymore. Buyers are looking for the complete package: brands that already have a solid following and strong direct-to-consumer (DTC) sales, a customer base that is really specific and doesn’t compete in that ‘beige’ or ‘vanilla’ space, and a strong social media presence.”
For emerging designers working with wholesale, the terms are only getting more challenging. O’Dwyer normally gains at least one stockist every season. Having staged her biggest show yet in Copenhagen last August — part of her prize for winning the Zalando Visionary Award — she was expecting an uptick in orders. Instead, she lost her biggest account, faced “extreme cautiousness” with remaining partners, and had to keep orders open for an extra two months to negotiate with a new one. Now, production is delayed, her cash flow is interrupted and everything feels “very precarious”, she says. “Because a lot of the larger wholesalers are closing down or struggling, this season has been really difficult. Moving forward with production without a deposit feels so risky, especially with the amount of rules around shipping and labelling. If retailers decide to cut the order or cancel it, you’re left having spent loads of cash.”
6. Explore new business models
With wholesale in such troubled waters, O’Dwyer is hoping bespoke and made-to-order will prove increasingly stable and profitable. This works better for her than the financial risk of stocking a DTC website with her full size range (inclusive sizing is one of O’Dwyer’s USPs) and building out the infrastructure to offer returns and customer service. To advertise this change of tack, O’Dwyer has been putting more effort into creating bespoke outfits for herself, including for events like the Fashion Awards. “Before, I would have focused everything on the collection and the wholesale side, but that’s not really serving me right now, so I’m moving my energy elsewhere,” she says. “I’m trying to think of myself as the founder and be something we can market to get other opportunities.”
With wholesale retailers on their knees, many emerging brands are rethinking their retail strategies and pushing into DTC. Zhou recently opened a storefront on China’s Little Red Book social shopping app, and is looking to open one on Taobao too, once the brand can afford more headcount to staff it. Tanner Fletcher used to split wholesale and DTC evenly. Now, the brand is building out its direct customer base with seasonal pop-up shops and vintage homeware sales, and letting go of wholesale clients that “no longer serve us”, says Kasell. “It’s been a relief.”
7. Profitability is more important than growth
Italian designer Durazzi worked at Tod’s, Balenciaga and Maison Margiela before founding her label three years ago. Two years ago, she saw the need for emerging brands to control their own customer base and renovated an independent showroom space, which she now uses as an office, photoshoot studio, events space and everything in between. “Our strategy is not to expand and put the brand everywhere because we need to sell, but also need to be selective,” says Durazzi of the brand’s select stockists. “We have an independent sales showroom, which reflects our identity and allows us to sell directly to buyers, and we offer something special for our boutiques if they ask. I think this is our strength.”
Durazzi is not the only emerging designer with a more measured approach to growth in trying times. When Chen was shortlisted for the LVMH Prize last year, it was the first time he’d travelled outside of China since the pandemic, hoping it would boost his business in Europe. It worked for a while, but now, he says, increased export prices and cautious wholesale buyers are stalling progress. “We are not super well known globally and we are not super commercial, so things are very difficult right now,” says Chen. “I can’t do the creative work and also expand the business. We only have so much capacity. Whereas before, we had up to 10 achievements on our wishlist — now, we have one or two.”
It’s time for brands to prioritise profitability over a growth-at-all-costs mentality, says Corre. “We have to move on from this idea that being everywhere all the time is a good thing, especially when all the big retail players are sinking. Chasing growth in that way just brings stress, toxicity and anxiety. Growth just gets you into debt,” she explains. Instead, Corre advises brands to focus on what works best for them. “Before you take on an event or a project or a contract, ask yourself: can I handle this? Is this part of my message? Is this going to serve my customer base?”
She points to Belgian label Sofie D’Hoore, which launched in 1993 with one pair of trousers and three sweaters, slowly building out a complete collection over a decade in business. And Parisian brand Cristaseya, which has only opened its online store intermittently in the 11 years since its founding, and still avoids big department stores or e-commerce retailers in favour of smaller boutiques. “There are a million different ways to build a brand right now,” adds Corre.
8. Don’t be afraid to ask for help
There is no single playbook for surviving the luxury slowdown. The only unifying advice is to stay agile and seek support where possible.
Petersson of Good Eggs is calling for fashion councils and governments to extend free legal and financial advisory services, for pro bono mentorship and advice to be offered “across all business functions”, and for more established brands to extend a supportive hand to emerging players. This is crucial if emerging talent want to survive the slowdown, she says. “Get legal advice to ensure any contracts are solid and you understand all the terms during tough times, and have insurance where possible to cover all eventualities, including if a retail or production partner goes bankrupt.”
In lieu of government support, emerging designers can band together, adds Scott Lipinski, CEO of Fashion Council Germany and chairman of the European Fashion Alliance. “Resource-sharing, such as cooperative production facilities and joint marketing campaigns, reduces costs and boosts visibility. By working together, the industry can help emerging brands thrive and innovate in challenging times.”
In Shanghai, independent designer showroom Not Showroom is reducing the number of emerging brands it represents, but expanding its services to include business advice and consulting. “We have fewer brands but we work much more closely than before,” explains Not Showroom founder and CEO Ying Zhang. “We don’t just help them with merchandising, we help with contracts, administrative work, sales and training. It’s more proactive. We encourage them to do more marketing events and activities, to get closer to the customer.”
9. Stay agile
If they can afford it, consultant Morency recommends that emerging designers bring this support in-house, hiring the right business partner to relieve pressure and allow them to focus on creating. “Many young designers excel in creativity, often outpacing the larger players due to their resourcefulness and ability to make the most of limited resources. But far too many still lack the essential business acumen to scale their operations.”
For Durazzi Milano, the key to agility isn’t bringing in additional staff — Durazzi says she is happy with her five-strong team of multitaskers — but rather staying close to suppliers. The ‘Made in Italy’ brand is built on supplier relationships she nurtured while working in-house at bigger brands, and now those suppliers repay the favour by being flexible and helping the brand adapt quickly.
Prioritising quality in production can also help on the communications side, adds Kasell. “We’re really leaning into the luxury aspect and the heirloom quality of our products. When the market is slow, people want products they can hold onto for longer, which are special and timeless enough to pass onto their children one day.”
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