Last week, layoffs came into vogue, the economic outlook continued to look bleak, American designer Tremaine Emory announced a partnership with Dior, and Kanye West sealed his fate. Don’t forget to subscribe to the Glossy Podcast for interviews with fashion industry leaders and Week in Review episodes, and the Glossy Beauty Podcast for interviews from the beauty industry. –Danny Parisi, Sr. fashion reporter
This week, H&M announced that it will lay off 1,500 employees, most of them in its home country of Sweden. British fashion market Lyst was also hit by layoffs this week, along with Amazon two weeks before and Gap in September.
Outside of fashion, layoffs have swept across the media and technology industry. Rising inflation together with increased costs for processes such as air and freight have put pressure on the companies’ balance sheets. In an age where profitability is increasingly desirable, fashion companies are looking for any way to cut costs they can.
Layoffs are likely to continue across the industry in the coming months. Cutting jobs is a quick way to make a balance sheet look more favorable in the short term, but it comes with long-term risk. Just look at Twitter, where entire teams with decades of experience were gutted, leading many inside and outside the company to speculate that key features are likely to start breaking down without employees maintaining them.
While Twitter’s work situation had other extenuating circumstances, the principle remains. More layoffs may come, but the short-term gain of cutting costs may be more damaging in the long run.
The economic outlook for the rest of the year is worrying
In earnings reports last week, a number of fashion brands posted disappointing sales and a gloomy outlook for the future. Victoria’s Secret, with earnings reported on Wednesday, saw a 9% year-over-year sales decline and a 19% drop in profitability.
On the same day, Farfetch reported for the first time in a quarterly report a decline in sales. Operating losses widened to $218 million in the third quarter, but the company revealed that it plans to cut costs (see the previous section on layoffs for a possible way that could happen). At the same time, the costs keep piling up. Farfetch said it will establish new partnerships with companies such as Neiman Marcus, which will cost an additional $170 million to establish.
Target cut its own holiday outlook two weeks ago, as did Urban Outfitters last week.
Tremaine Emory to guest design for Dior
Tremaine Emory, the creative director of Supreme, is co-designing a capsule collection for Dior that was revealed in Cairo on Friday. It’s not through Supreme, but through Emory’s brand, Denim Tears. Through Denim Tears, Emory has collaborated with a number of major mainstream brands from Levi’s to Uggs.
Emory was one of the first fashion figures closely associated with Kanye West to publicly condemn his recent actions.
Speaking of Kanye West…
I won’t link to what West said most recently in an appearance on Infowars with Alex Jones, but it’s safe to say it’s probably the final nail in the coffin for his mainstream fashion career. West had already lost partnerships with Gap and Adidas and the respect of pretty much the entire fashion world. His latest comments are so beyond the pale that I can’t imagine any way for him to come back from it.
While Yeezy designs will live on at Adidas, Yeezy’s time in fashion could easily be over for good.