Discussions about the fashion industry thread

[Epaulet]

To me, it will be interesting to see where we are in 12-18 months with the few remaining luxury department stores and all of the directly competing international fashion brands with their own competing storefronts. How long can Saks or Neiman Marcus continue selling Cucinelli, Canali, LV or Gucci and remain in business when those brands have shops right around the corner from them in every major city? The era when Saks or NM traveled around the world to seek out and have high quality, specialty goods made just for them is so long gone. When they went the route of just selling the same international fashion brands that everyone else was selling, they lost what made them special.

The flagships depend so heavily on International tourists too.. specifically higher spending clients from China. I feel like tourism and travel will be the last industries to bounce back from this, and it will most likely cause a lot of luxury b&m retailers to fold.

 

[bry2000]

The flagships depend so heavily on International tourists too.. specifically higher spending clients from China. I feel like tourism and travel will be the last industries to bounce back from this, and it will most likely cause a lot of luxury b&m retailers to fold.

So where does this end up? Amazon as the only option?

 

[Epaulet]

So where does this end up? Amazon as the only option?

I think that it just accelerates trends for brick and mortar apparel retailers that were already happening. As a generalization: it's extremely difficult to maintain a large scale retail space dedicated to the usual mix of clothing, footwear, and accessories. Overhead is too high and in-store traffic is too low. Online shopping from all sources is fast, easy, and ubiquitous. Someone like Bergdorf Goodman doesn't have to worry about Amazon. But they need to worry about online competitors for both new and resale luxury goods. We saw that destroy Barneys. I think that the Coronavirus depression.. at least its impact on travel and tourism.. will probably seal their fate.

That said, branded storefronts with vertical integration (Gucci, Vuitton, etc) and multi-brand retailers with a much smaller footprint can probably see their way through this.

 

[Epaulet]

I agree with that assessment of Everlane, though. I was initially pretty enthusiastic about the DTC model and their story, and even went out of my way to stop by their original office and say hello. I stopped buying after my first few items, though, because the quality was meh and the designs were utilitarian at best.

Their men's items are really unremarkable IMO, but they seemed to have a strong lock on the women's biz-caz market. I wouldn't be surprised if their sales were about 85% to 90% womens overall. I just think that quality and design with menswear was never something that they could really execute.

And yeah, it's hard to say why they weren't profitable before this pandemic. Their store footprint is really small, their staffing costs seem manageable. Maybe they had far too much tied up in inventory? I don't get how a very straightforward and predictable business model of making clothes and selling them though a website and small storefronts is even a magnet for a crazy degree of VC.

 

[Zamb]

Their men's items are really unremarkable IMO, but they seemed to have a strong lock on the women's biz-caz market. I wouldn't be surprised if their sales were about 85% to 90% womens overall. I just think that quality and design with menswear was never something that they could really execute.

And yeah, it's hard to say why they weren't profitable before this pandemic. Their store footprint is really small, their staffing costs seem manageable. Maybe they had far too much tied up in inventory? I don't get how a very straightforward and predictable business model of making clothes and selling them though a website and small storefronts is even a magnet for a crazy degree of VC.

because hype wins, its a fake it till you make it kind of thing.
a lot of people give the perception of success when their reality is far from that.

I remember of Story of the late Bill Blass, whose business was in financial trouble, and was put up for sale. Someone demonstrated an interest in buying the Biz, and offered to pay the money in cash...…
It was Zoran, a designer whom Saks had to force to put his name on a label on his clothing. whose sales volume was about A QUARTER of that of Bill Blass, but his PROFITS were more than twice............

 

[bry2000]

I think that it just accelerates trends for brick and mortar apparel retailers that were already happening. As a generalization: it's extremely difficult to maintain a large scale retail space dedicated to the usual mix of clothing, footwear, and accessories. Overhead is too high and in-store traffic is too low. Online shopping from all sources is fast, easy, and ubiquitous. Someone like Bergdorf Goodman doesn't have to worry about Amazon. But they need to worry about online competitors for both new and resale luxury goods. We saw that destroy Barneys. I think that the Coronavirus depression.. at least its impact on travel and tourism.. will probably seal their fate.

That said, branded storefronts with vertical integration (Gucci, Vuitton, etc) and multi-brand retailers with a much smaller footprint can probably see their way through this.

on-line luxury competitors are going to see the same, if not worse, no?

 

[Zamb]

I closed my shop on march 13th and sent staff home. Business since the first of the year had been sluggish. When the broadway theatres closed and the TV/movie productions stopped i had no choice. I am now 2 hours away in upstate, NY.
.My cutter took home about 15 small orders. He lives a short drive from one of my sewers. Of course, i am not bringing in staff on public transportation to finish off the shirts.. i wanted to make some masks, i was jealous watching Justin, at Hertling still open. I just turned him on to some contacts for medical grade textiles.
The bailout is confusing. I told staff to file for unemployment. Now it seems like to qualify for certain loans, i had to keep staff on payroll.
I would run out of money before i would see part of the stimulus. NYC has grants. Hopefully they will come through.
I know business will return, just need my landlord to be patient.

I'm incredibly sorry to hear this. There is a lot of uncertainty in this time.
There is a whole lot of uncertainty as to what the government will do for small businesses. I know of a ton of persons who reached out to Gov Cuomo and heard nothing back. Not a single reply from the numbers and email that was listed,
My Wife's cousin worked in the office, and still has contact there, and not even email to people who works there has done anything in terms of a response. However I am never usually hopeful about those things. If it happens great, if not, then we have to find our own way.
A good number of my staff lives in a 5 or so mile radius. Currently we have 4 people working. I pick them up in the morning and take them home in the evening so they don't have to travel on public transport. One lady is over 60, a diabetic and scared, so beginning this week she will work from home.
We are making only masks now, and developing other things pertaining to the present pandemic. we are developing face shields etc, and a filter to be lab tested this week to see how it performs............

 

[NickPollica]

I agree with that assessment of Everlane, though. I was initially pretty enthusiastic about the DTC model and their story, and even went out of my way to stop by their original office and say hello. I stopped buying after my first few items, though, because the quality was meh and the designs were utilitarian at best.

DTC is something to be enthusiastic about. That said, it will always need to be about the product.

Their men's items are really unremarkable IMO, but they seemed to have a strong lock on the women's biz-caz market. I wouldn't be surprised if their sales were about 85% to 90% womens overall. I just think that quality and design with menswear was never something that they could really execute.

And yeah, it's hard to say why they weren't profitable before this pandemic. Their store footprint is really small, their staffing costs seem manageable. Maybe they had far too much tied up in inventory? I don't get how a very straightforward and predictable business model of making clothes and selling them though a website and small storefronts is even a magnet for a crazy degree of VC.

It’s not hard to say. It’s keystoning. That simple. Their business model is fundamentally flawed.

 

[Epaulet]

DTC is something to be enthusiastic about. That said, it will always need to be about the product.

who says they’re keystoning? They have a cotton-stretch Jean for $68 made in Vietnam. I bet they land that for $15 max.

 

[NickPollica]

who says they’re keystoning? They have a cotton-stretch Jean for $68 made in Vietnam. I bet they land that for $15 max.

That is their “radical transparency” - they break down the cost of every garment and show that they are keystoning (last I checked).

 

[Epaulet]

That is their “radical transparency” - they break down the cost of every garment and show that they are keystoning (last I checked).

View attachment 1363224

yes I know that’s their pitch, but do we think this is accurate? Like their sneakers are $98, made in Vietnam with locally sourced leather.

Admittedly I’ve never tried to make sneakers in Vietnam, but I priced out a Chinese item a few years back with a similar composition and I was looking at about $29 landed duty paid. That’s with air freight. Gotta be cheaper for Everlane with Vietnam make and much higher quantities for production and shipping. Maybe you’re talking under $20 with sea transport. Either way it’s much less than half of the $98 retail.

I just think that their cost projections are inaccurate. Or perhaps there’s some fine print that allows them to doctor the numbers. I bet they work on 70% gross margin at full price at least.

 

[dfagdfsh]

I don't understand the complaints about Everlane. Sure the clothes are boring basics, but how is that any different from Uniqlo, Gap or 75% of the products you sell at Epaulet? And how is a value statement organized around being transparent about pricing and direct to consumer any different than a value statement organized around selling US made products direct from a factory so the pricing is better? Is it because something made by Hertling is better than something made in China? Is it because Everlane is more successful? You guys remember that one of the earliest Everlane employees (back when they only sold tshirts) posted here and sent free tshirts to SF members to get feedback on the fit and quality? It'd be one thing if you don't like how they operate more like a Silicon Valley tech startup than a clothing brand, but it seems your criticism is that you don't like their marketing. Also their clothing is actually pretty nice for what it is! Their basic denim is virtually identical to $275 Geller made in USA jeans I own, so I actually do believe it costs them $60 to make - and having stores like Everlane where I can buy cheaper basics from lets me spend more money on signature pieces like outerwear and knitwear. There is still a hole in the market for well made, well cut affordable basics. Their competition is Uniqlo and J. Crew. not 18 East.

 

[NickPollica]

I don't understand the complaints about Everlane. Sure the clothes are boring basics, but how is that any different from Uniqlo, Gap or 75% of the products you sell at Epaulet? And how is a value statement organized around being transparent about pricing and direct to consumer any different than a value statement organized around selling US made products direct from a factory so the pricing is better? Is it because something made by Hertling is better than something made in China? Is it because Everlane is more successful? You guys remember that one of the earliest Everlane employees (back when they only sold tshirts) posted here and sent free tshirts to SF members to get feedback on the fit and quality? It'd be one thing if you don't like how they operate more like a Silicon Valley tech startup than a clothing brand, but it seems your criticism is that you don't like their marketing. Also their clothing is actually pretty nice for what it is! Their basic denim is virtually identical to $275 Geller made in USA jeans I own, so I actually do believe it costs them $60 to make - and having stores like Everlane where I can buy cheaper basics from lets me spend more money on signature pieces like outerwear and knitwear. There is still a hole in the market for well made, well cut affordable basics. Their competition is Uniqlo and J. Crew. not 18 East.

I don’t have any gripe with Everlane. Just chiming in about why they aren’t profitable.

 

[Epaulet]

I don't understand the complaints about Everlane. Sure the clothes are boring basics, but how is that any different from Uniqlo, Gap or 75% of the products you sell at Epaulet? And how is a value statement organized around being transparent about pricing and direct to consumer any different than a value statement organized around selling US made products direct from a factory so the pricing is better? Is it because something made by Hertling is better than something made in China? Is it because Everlane is more successful? You guys remember that one of the earliest Everlane employees (back when they only sold tshirts) posted here and sent free tshirts to SF members to get feedback on the fit and quality? It'd be one thing if you don't like how they operate more like a Silicon Valley tech startup than a clothing brand, but it seems your criticism is that you don't like their marketing. Also their clothing is actually pretty nice for what it is! Their basic denim is virtually identical to $275 Geller made in USA jeans I own, so I actually do believe it costs them $60 to make - and having stores like Everlane where I can buy cheaper basics from lets me spend more money on signature pieces like outerwear and knitwear. There is still a hole in the market for well made, well cut affordable basics. Their competition is Uniqlo and J. Crew. not 18 East.

same, I’m also not criticizing their products or pricing. I don’t find their menswear exciting but that’s subjective and some people probably think the same of what I make.

I do think that their costs are overstated and their graphics are misleading. But most people probably just buy the stuff because they like it and the end price is acceptable.

and I’m still good friends with that former Everlane guy that you mentioned. It’s a far different company now. FWIW I’ll often recommend them to any women trying to find business casual wear. I think that their stuff is great for that.

NYC is definitely grateful for places like Hertling and Hickey Freeman right now. They’re churning out a lot of masks and doing so in short order. If accounts like me and customers like the SF community didn’t support them - even with the availablity of low-cost imports - this stuff would be further out.

 

[crazn]

i find everlane boring. uniqlo is quite boring but has occasional surprises. but mostly boring. the footprint of uniqlo gap and other basic stores are such that u don't really need to consider everlane and online clones since there isn't much value add just to switch online and buy something.