Fashion Is Broken, Extreme Makeover Time
By Dawn McGregor 18 September, 2020
Fashion is going bankrupt with 20+ filings in 6 months. CWR's McGregor says it is time for a makeover, in order to survive
Fashion is broken. The industry has been struggling for years, from an old industry with little innovation, its dirty & thirsty ways, the mountains of waste & microplastics it creates and its oil & plastic addiction, but the final breaking point, COVID-19, which exposed its deep vulnerabilities.
Fashion has been struggling for years but COVID-19 was the final breaking point
This is true for the luxury sector with new consumer priorities and less discretional spending. The highbrow Tiffany acquisition by LVMH worth more than USD16 billion is in tatters, in part to the damage caused to the luxury industry by the pandemic.
It is especially true for the fast fashion sector (we wrote about its death here), which operates on a low margin-linear model that is heavily reliant on quick and cheap but highly disparate global supply chains. It’s not surprising then that it has been battered by the pandemic but the number and speed at which the dominoes fell, was. It’s been a retail apocalypse. Since early April, I have counted 23 bankruptcy filings between fashion brands and retailers. And there are some very well-known and big names in those, like, J.C. Penney, J. Crew, Aldo, Brooks Brothers, Neiman Marcus and it goes on; and there are others on bankruptcy watch. Some wonder if they all really needed to file for Chapter 11 or if they are using bankruptcy as a way to ride out 2020.
20+ bankruptcy filings in last 6 months…
…then 20% of cotton is potentially not viable anymore
And if that wasn’t enough, there is now also big uncertainty around 20% of the world’s cotton – a key fashion staple -, which comes from Xinjiang in China. The factors behind this are a bit more of a mixed bag with geopolitics, changing markets and some pressures from the pandemic all playing a part. There has been mounting pressure on the treatment of the Uighur population in China and forced labour allegations. In March 2020, the Better Cotton Initiative (BCI) – leading global NGO on cotton -, suspended activities in Xinjiang, following these forced labour allegations.
The matter has continued to escalate. BCI’s investigation into the allegations in cotton has been delayed due to the pandemic. Then, the US government announced on 14 Sep 2020 new restrictions on the import of products from Xinjiang, especially cotton and apparel. The industry is struggling to replace this huge chunk of cotton. A potential option is to turn to India, already a major global producer but the country already suffers from severe water scarcity, so it is not a viable option. As Amy Lehr from CSIS says, “Similar vertical capacity in a single country or region at such a scale does not currently exist”.
Being broken is devastating but is a real opportunity for an extreme makeover, one that changes fashion for better forever
As devastating as it is to be broken, for the industry, markets, people and economies it does present a real and unique opportunity for an extreme industry makeover – one that charts a better climate future (yes, fashion matters to the climate, see here), operate within planetary resource boundaries, more modern and more innovative. This should be an opportunity everyone takes.
Yes, we can build back better, and it is good that 50+ leading organisations signed the Ellen MacArthur pledge to do just that, but can we do even more? With the broken pieces, we can find new ways forward.
What if factories were more than just places things are made, like Esquel’s award winning factory in Guilin that even to be built, used sustainable products (bamboo etc.) and has a garden to help feed its 1,500 workforce? What if the agriculture used in fashion could all be regenerative? Patagonia has started doing this. What is everyone had a corporate biodiversity strategy – the next frontier in fashion sustainability? Kering with the University of Cambridge Institute for Sustainability Leadership has published their strategy. What if fast fashion finally ditched the perpetual lowest price saga – a crux permeating many of fashions’ problems? What if the ‘what ifs’ you just read and other came true… that would be a good looking makeover. Let’s make it happen.
- Sustainable Fashion Today: A Sweet But Short High – 2019 has been a busy year for sustainable fashion but with sweet but short highs as CWR’s Dawn McGregor highlights. Given fashion’s huge climate impact, McGregor laments the need for more strategic solutions
- Fashion Has The Power To Shape A 2℃ World – If fashion were a country it would have the fourth highest carbon emissions behind the US, China, & India. China Water Risk’s Dawn McGregor & Debra Tan question why the industry is not under the spotlight like coal and call for faster disruptions
- Fast Fashion’s COVID Death & Virtual Revival? – Fast fashion is dying – from broken supply chains and no demand thanks to WFH. CWR’s Dawn McGregor and Debra Tan reimagine fashion’s future – a virtual realm where our avatars attend Zoom drinks and digital supermodels walk the runway
- The Status Of Fashion’s Redesign – Fashion, an industry not often associated with climate change & technological innovation has been redesigning itself to change just that. With growing global focus on the environment China Water Risk’s Dawn McGregor takes a look at the status of this redesign
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- Hong Kong & Asian Investors Jump On First Lever VC Asia Alt Protein Fund – Investor interest in alternative protein is at an all-time high and with a bullish Asia region. Lever VC secured USD23 million in capital. Green Queen’s Sally Ho expands
- The Water Footprint Versus The Water Handprint – Corporate water stewardship is stalling. It is time to adopt a water handprint strategy with its positive and broader impact focus, seen already in the ICT sector, says William Sarni, Water Foundry CEO
- Are We Feeling the Shark’s Teeth? – With clear material water risks posing even more exposure to global systems, the Climate Disclosure Standards Board is working to better corporate water disclosure with a new guidance. Their Francesca Recanati expands
- A Practical Approach To Factoring Climate Risk Into Financial Valuation – It is not a matter of ‘if’ but ‘when’ physical climate risks are appropriately taken into account. So, Intact Centre on Climate Adaptation’s solution are sector-specific Climate Risk Matrices as their Kathryn Bakos outline
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