Multi-brand retailers are really going through it. Last December, Farfetch narrowly avoided bankruptcy, then Matches was shut down this June – resulting in a devastatingly good fire sale. The following month, Saks Fifth Avenue merged with Neiman Marcus and this October, news broke that Mytheresa is set to acquire the Yoox Net-A-Porter group. For the brands these retailers carry, it’s arguably an even tougher time. They have to watch as their hard work gets sold off for pennies while their invoices for hundreds of thousands of pounds – maybe more – remain unpaid. Some have even been forced to shutter their own businesses as a result.
Online retailers like MyTheresa, SSENSE, and Moda Operandi are still chugging along, but the future is uncertain. “The question is, who’s next?” says Harry Fisher, the director of htown, a London-based agency that focuses on developing emerging designers with a bricks and mortar storefront in Shoreditch. For a while now, brands have been knocking on his door looking for guidance on how to navigate the rough retail waters. “Everyone I speak to is having a really difficult time on the wholesale side,” says designer Priya Ahluwalia, one of Fisher’s clients. “It’s all gone a bit… awry.” Do they cut out the middleman and double down on direct-to-consumer (DTC)? Or is wholesale a white whale still worth chasing?
Priya Ahluwalia, a London-born designer who often works with deadstock fabric, received orders from major retailers shortly after showing her colourful, energetic SS19 graduate collection – an unusual occurance, and one that she says she is “really grateful” for to this day. Opening Ceremony and LN-CC placed orders before the brand even had a logo. But the designer also started doing DTC from the beginning, building a website from scratch herself. “I think it’s important to own your relationships with your customer and to be able to control elements of their journey,” she says, speaking via Zoom. “For example, we have particular packaging and tissue paper that we use, and messaging that we share with our customers that wholesalers just can’t.” She also uses the data she gathers from website orders about who her customers are and what they like in order to develop future collections. Of course, selling directly to customers also allows her to keep a higher percentage of the profits – and who wouldn’t want that?
But DTC doesn’t come without its downsides. “It’s all well and good to have a great website, but you’ve got to get it out there,” says Ahluwalia. For an emerging brand with a small following, a few press clips and an even smaller advertising budget, getting a new customer’s attention can be difficult. Retailers help to get your product in front of people who might not have found it otherwise, locally and abroad, and established retailers like Selfridges can provide a stamp of institutional approval as well.
“There’s an obsession with the new kid on the block. Once everyone moves on, it’s hard”
spencer badu
“There are a lot of random encounters that you can’t really plan for,” says Spencer Badu, a Toronto-based designer who started his eponymous label almost a decade ago with a DTC business. “Recently, for example, we had Skepta and Kyrie Irving walk into a store and buy something, and we had no idea until they wore it and got a lot of social media attention. Those moments can’t be replicated. Unless, you know, maybe you DM the stylist 100 times and get their attention.”
Fashion is a fickle business, though. One minute wholesalers can be beating down your door, and ignoring you the next. “There’s a bit of an obsession with the ‘new kid on the block,’” says Badu. “When that happens [to a brand], it can be very lucrative in the moment, but once everyone moves on to the next designer, it’s hard for a lot of brands to maintain their business.”
“You can’t put all your eggs in one basket,” says Henry Zankov, a knitwear designer based in New York. His eponymous label has an online store, but predominantly sells through other retailers. Although Zankov requires a 50% deposit, which protects him and allows him to actually fulfil an order, it prevents him from working with any stores that refuse to work that way. Plus, Zankov deals with common problems encountered in the wholesale business: a retailer could put in an order and never pick it up, or a buyer could put in a big order one season and halve their order the next – or buy nothing at all.
As of May, the emerging jewellery brands Alighieri and Completedworks were reportedly owed more than £70,000 and £110,000 respectively by Matches. Completedworks’ artistic director Anna Jewsbury even drove to the Matches warehouse to try to speak to administrators in person when her invoices hadn’t been paid. And it’s not just small brands that are being hit hard. Matches reportedly owed Burberry more than £500,000, Anya Hindmarch more than £200,000, and Toteme £1 million.
“To say this is difficult and unsettling for the industry is an understatement,” says Hindmarch, who admits that the writing was on the wall with Matches’ slow payments and discounting. “It makes brands question the safety of wholesale as a channel and makes everyone look closely to ensure there are legally binding clauses in place for any future situations like this.”
For some, it was a sinking blow. “Despite a period of positive growth and sales, the upheaval in the wholesale market has had dramatic implications for the brand,” read a statement from The Vampire’s Wife, a Matches-stocked brand that shuttered in May. That same month, Roksanda, which had a store on the same street as the Matches flagship in Mayfair, sold to The Brand Group (TBG), citing “recent volatile market conditions.” “It is so sad for so many talented people to lose their jobs and for such a special business, that we all loved, to be gone,” Hindmarch adds.
“It has never been more important to hold a close, direct relationship with your end customer”
anya Hindmarch
Moving forward, designers like Ahluwalia are much more wary of being at the whim of others. “I would like to get to a position where my business has a much stronger DTC element because then you have more control,” she says. Eckhaus Latta, for example, established its online store in 2016, five years after launching, and its first IRL store in 2018, allowing the brand to build a local, loyal fanbase (first in Los Angeles, and now in New York) and grow at a speed that felt organic. “It has never been more important to hold a very close, direct relationship with your end customer as I think wholesale will be rocky for a while yet,” says Hindmarch.
At the end of the day, neither wholesale nor DTC is perfect; the smart move for designers today may be to hedge their bets and do a little of both. “The dream is to have a really nice mix of wholesale and DTC,” says Fisher. “That’s how you make money. Ideally, you want customers to shop directly from you, but you need wholesale to show customers your product.”
In other words, you don’t need to be in a million different stores; just the right ones. “Be strategic about your wholesale accounts and make sure that they’re spread out across the globe, and a mix of digital and in-real-life, and big stockists and small boutiques,” offers Ahluwalia as advice. “And then with DTC, try and get on that as soon as possible,” she adds, acknowledging that launching an e-comm store has its own challenges, but you have to start somewhere. “Even if you’re selling things on your Instagram, start building a customer base so you own the relationship with those people and create a website that’s reflective of your world.”
“I think adding some extra pieces that are special and unique just to your site that maybe have a more accessible price point or a silhouette that’s easier to wear can bring a different kind of customer to you that isn’t necessarily the department store customer,” adds Zankov. As the runner-up for the 2023 CFDA/Vogue Fashion Fund, he’s received invaluable mentorship and guidance. He also feels “amazing support” from retailers like McMullen and Bergdorf Goodman, who carry independent brands like his.
But he also thinks that now is the time to get creative. Over the summer, Zankov hosted an archive sale at Dae, a café, bar and homewares store in Brooklyn. The atmosphere was relaxed and convivial – it seemed like the party wasn’t over, but just getting started.
Text: Emilia Petrarca