With the coronavirus forcing shutdowns across Europe, small independent labels are under pressure as they struggle to stay afloat under challenging conditions.
While the situation is critical, governments are stepping in with multibillion-euro aid packages, many factories still remain in operation and news the Chinese economy is beginning to recover is giving hope.
“Things are changing day by day,” says Arianna Casadei, communications and marketing director of Casadei. She is basing herself between her home in Rimini in northeastern Italy and the company factory and headquarters in nearby San Mauro Pascoli, where factories can open as long as they have no cases of the virus and adhere to strict safety precautions. All staff wear masks and gloves and they are operating at reduced capacity to allow workers maintain a safe distance.
Casadei’s acceleration of an omnichannel strategy has paid off as brick-and-mortar sales stall. January to March e-commerce figures were up 12% to 15% over the previous year. The team also created video line sheets to facilitate remote buying of fall ’20. The Chinese market is also showing signs of recovery, which is encouraging, she says. “We received orders from China yesterday as they expect things to be better by fall. China is a very impactful country for the market and has the power to turn things around like flipping a switch.”
The situation is more challenging for others.
“It’s harder for newer labels,” says Samuele Failli, who didn’t have the budget for an online showroom or video lookbooks. “So many clients cancelled their appointments or orders as they were scared, so our fall ’20 selling campaign did not go well. We do have orders pending but are still awaiting confirmations.”
However, he stresses that production continues, at least right now. Orders are being produced at his regular factory, five minutes from his home just outside of Florence. “Everyone is wearing masks and gloves, and every morning we clean the workplace with alcohol, spray everything down, wait for nine minutes and then wipe,” he said.
Marre Muijs founded the seasonless label, Essēn, in 2015. The brand, focused on making each of its styles in small batches, keeps its production in family-run factories in Italy and Portugal. While Muijs’ Portuguese factories remain operational, the Italian ones have been forced to shutter.
“The situation they’re facing is heartbreaking,” she says. “Production cancellations, factory and store closures are a new reality now. Small businesses are in trouble, and it’s difficult knowing what to do at the moment. But it’s the hard times that define the integrity of any business, so we’re taking each day as it comes.”
For Francois du Chastel, founder of Chatelles Slippers, the main challenge is not defaulting on payments. He has suspended all workers whose salaries are being paid via state unemployment — part of the 45 billion euro ($50 billion) aid package pledged by the French government. Italy has also rolled out a 25 billion euro ($26.7) plan to help the country’s businesses.)
Du Chastel said that banks have supported him by freezing loan payments, but he still has to pay the rent for his business premises. His shoes are made in factories in the north of Portugal, which are still operating, and he has been able to negotiate longer payment terms of 90 days as opposed to 45, as previously required.
“It will be fine if the shutdown only lasts a couple of months, but if it’s six, then that will be another story. If one business goes down, then it will be a game of dominoes,” du Chastel said.
With his brand’s Rive Gauche store shut, he is relying on income from big wholesale accounts in Tokyo and Germany, while increasing the focus on his e-commerce site. On the bright side, the founder believes that the brand’s direct-to-consumer roots will help it continue to perform well digitally.
Paris-based Julien Martinez of Martinez Souliers said the French’s government’s aid has been crucial as many international buyers canceled their fall appointments at the last minute and two retailers scrapped fall orders completely.
Martinez is working with online showroom Le New Black to enable partners to view the collection and order from a distance. “The biggest issue now is that the leather suppliers and the factories we use in Spain are closing between today and Friday,” he said, “but thankfully spring ’20 is being shipped as we speak so we got it done in time.”
His main challenge now is reorganizing fall production. On the plus side, his handwoven uppers are made by a network of Spanish home-based workers, but he is still reliant on the factories to assemble the shoes.
Overall, Martinez is looking at the crisis as an opportunity to take a different approach and be more creative with the resources at his disposal. When it comes to spring ’21, he will present a smaller collection using the leatherwear stock that is already available, recycling as much as possible and reinventing his best-selling styles. “Our brand was already based on the value of timeless products, local production and local sourcing, and this crisis has given us even more incentive to continue down this path,” he said. “We remain very positive and are reorganizing our business plan in order to emerge stronger than ever.”