How Is Pass'S Unprecedented Stress Test In Fashion Industry?

?

In the field of fashion and luxury, few people mentioned "stress testing" in the past. Perhaps we all agree that this is a traditional industry that does not have many "accidents". Although uncontrollable factors such as climate abnormality and public relations crisis can also affect performance, in general, there are few strong waves in fashion consumption market. Even under the impact of the economic crisis, the impact is relatively slow and slow release.

?

The sudden outbreak of the new crown virus has forced the entire global fashion industry to carry out a large-scale, ultra high intensity "stress test" in real situations. Behind the news of widespread landslides, layoffs and pay cuts, we need to know more about whether the fashion companies are resilience and flexibility to cope with such extreme conditions, whether they can withstand risks to the greatest extent, reduce the degree of damage to disasters, and achieve faster recovery.

?

?

The 22 major luxury listed companies in the world have been hit by a series of strikes, such as China's suspension, Europe and the United States suspension, retail retail suspension and supply chain disruption. In the first half of this year, sales will decline considerably, while fixed costs such as manpower and rentals still need to continue to spend all or most of them.

?

However, opening up the financial statements of these luxury companies found that even the enterprises with general performance in recent years have different risk resisting capabilities. Let's take two typical companies for example, do a simple stress test:

?

For example, the mid size luxury brand Salvatore Ferragamo (Ferragamo) - the long history of Italy's business has been lingering in the past few years, with sales of 1 billion 380 million euros in 2019, gross profit of 890 million euros, and sales and administrative expenses of 760 million euros, that is to say, assuming Ferragamo annual sales and gross profit decline. 15%, even if the operating expenses have to be paid as usual, the company can still break even. If the cash reserves of the company account for 220 million euros, the annual sales and gross profit will shrink by 40%. As Ferragamo's financial position has been good, its asset liability ratio is only 2%, and more financial support can be obtained through bank credit.

?

Looking at the industry leader, the French luxury giant, Herm s (Hermes), which is called "a hundred drugs not to be invade", has a cash account of up to 4 billion 380 million euros at the end of:2019, while the annual sales and administrative expenses are 2 billion 390 million euros. It can be no exaggeration to say that if Hermes does not cut a single person, it will not be closed to a store, but only rely on the surplus grain (cash reserve) in the family, and it can persist for two years in the case of "zero" sales revenue.

?

It is no wonder that in the harsh times of the French epidemic, most of the production bases in France were named by Hermes, who will pay the basic salaries of all 15 thousand and 500 employees as usual, without seeking any government subsidies.

?

?

channel

?

An old Chinese clothing company has been sorting out and upgrading the sales network of all levels of cities in the past few years, so that we can really get the same step and do our best. After the resumption of work, although Kita Kamihiro and other big city shopping malls are still scarce, but relying on the rapid recovery of the three or four cities, the sales volume has recovered more than 70% in one month.

?

user

?

An international women's clothing brand with thousands of stores in China has been polishing the localized CRM system for many years. The salesperson has established personal contacts with customers who visited the stores, whether or not they purchased products, through WeChat. With almost all stores closed, salesmen rely on close interaction with customers and strong CRM backstage support on WeChat. They still maintain about half of their sales, and have successfully transformed some non purchasing customers who just visited the store in the past.

?

product

?

A top luxury brand sold poorly in January and February during the peak of the Chinese epidemic, but after the resumption of work, consumer enthusiasm rose rapidly. The March performance outperformed China's market in the first quarter of this year. The attraction of "good products" located at the spire of Pyramid to high-end consumers in China has not been faded by the epidemic.

?

Globalization

?

A fast fashion giant in Europe has quickly transferred the goods originally prepared for the European market from the domestic logistics center to the revival Chinese stores under the outbreak of the European epidemic. The return cargo aircraft also brought in urgent supplies of masks and protective clothing from China.

?

Although the local factories have to close because of the epidemic, their cooperative factories are scattered in different corners of the world, to a certain extent, to ensure the continuous operation of the supply chain.

?

With the closure of thousands of stores around the world, its brand business in more than 200 countries will play a bigger role.

?

A few days ago, Dior creative director in Rome home segregation and Maria Grazia Chiuri, a female designer in Italy, expressed their feelings about the epidemic in plain language: "I mainly focus on the present day, do things steadfastly every day and seek asylum in creativity. I don't think it's wise to try to predict the future. I just think we need to make some adjustments. We must be prepared to meet these changes. "

?

For fashion designers, "change" and "adjustment" are the right thing to do. For every season, the new product that leads the trend must be created out of nothing. Failure or success can never be accurately predicted, and no matter what the result is, the next season must come back to zero.

?

For fashion entrepreneurs, the "sense of crisis" has always been the same. Even if Arno, the world's number one luxury group LVMH, is shining, no matter how brilliant his performance is, every time he holds the shareholders' meeting, he will repeat like Xiang Linsao repeatedly: the next economic crisis is not far away from us. We must be prepared.

?

The strategic vision of creativity, flexibility, meticulous management and precaution must be a necessary weapon for the fashion industry to withstand greater risks and bear more pressure.

?