• Home
  • News
  • Business
  • Democratization: Fashion Weeks’ secret to offset 600 million pandemic loss

Democratization: Fashion Weeks’ secret to offset 600 million pandemic loss

By Angela Gonzalez-Rodriguez


Scroll down to read more


Image: Carmen González for FashionUnited

The global fashion industry faces a bumpy road ahead. Not only they have to figure out their own logistics conundrums but to reinvent the supply chain, re-connect with consumers and make up for double-digit decline in revenues.

At a global level, the fashion industry posted a 20 percent decline in revenues in the 2019–20 period, with margins for earnings before interest, taxes, and amortization (EBITA) dropping almost 4 percent to 6.8 percent, as indicated in the latest edition of McKinsey State of the Fashion Report.

Fashion Weeks around the world transitioned from traditional runways to virtual shows, leaving the cities that host the ‘Big Four’ (London, New York, Paris, and Milan) of these week-long fashion shows reeling with more than 600 million dollars lost in economic activity.

Covid’s millionaire financial loss for mayor fashion weeks

Burberry was one of the four brands that were able to go ahead and show at the London Fashion Week in September 2020. Back then, Caroline Rush, the chief executive of the British Fashion Council, said designers were using the limits imposed by the virus to think of alternative ways to show off their work. That translated into hundreds of brands switching their shows and catwalks online, with the resulting slash to local businesses across hospitality, travel, retail, and related industries, which would have otherwise welcomed millions of customers.

FashionUnited’s Business Intelligence estimated LFW to generate over 300 million dollars for the city. Furthermore, Oxford Economics calculated that over 240,000 direct jobs were lost due to fashion week being hosted online. This number goes up to 350,000 if including indirect job losses. Delivered by the British Fashion Council, the London Fashion Week (LFW) is the UK’s major trade event. Right before the pandemic, from 2018 to 2019, London Fashion Week generated 110 million pounds in new orders, investment and trade, as highlighted by the Mayor of London Office.

New York, once dubbed the world’s capital of fashion, remains focused on bouncing back from the financial fallout brought on by the pandemic. Eric Adams, the city mayor since early 2021, refered to the New York Fashion Week as a “600 million dollars juggernaut” that brings the city “twice the amount that we’d make if we had the Super Bowl here”. Experts in the field point out that before the pandemic hit, the two biannual fashion weeks added about 900 million dollars to the city economy. Indeed, the annual economic contribution of New York Fashion Week upon New York City was estimated at 887 million dollars in 2016 by the CFDA.

Similarly, the Fédération de la Haute Couture et de la Mode (FHCM) calculates that the Paris Fashion Week, another of the ‘Big Four’ fashion shows, generates 1.2 billion euros in economic spinoffs yearly (about 440 million euros of fashion shows and events combined and another 725 million euros worth of trade fairs and related events.) But this is not the full extent to it, as the French fashion used to prompt an estimated 10.3 billion euros in total sales.

In Milan, the economy thrives the months that fashion shows happen, as summer and spring fashion weeks bring an aggregated 30 million euros in spending in hotels and restaurants alone, per the Italian Fashion Chamber’s calculations. In 2021, the Milan Fashion Week moved to a fully digital structure, with the odd, very limited, socially distanced shows for buyers and media. As a result, the city’s related income fell by approximately 80 percent, according to the chamber.

The power of more democratic fashion

Before Covid, access to fashion weeks was very exclusive and certainly pricey. Admission to runway shows used to be by invitation only, often reserved for wealthy consumers able to pay hundreds – or even thousands – of dollars to enjoy the front row. But as Anita Balchandani from McKinsey put it in a podcast assessing the value destruction caused since early 2020 across the fashion world, “This pandemic has forced a demand rethink, certainly in the earlier part of the crisis.” She alludes to different factors driving this needed rethink, highlighting that “A lot of the channels that a number of brands would rely on—for example, wholesale channels, independent retailers, et cetera—have actually been at the sharp end of and seen the pain from the crisis.”

Open to try new ways to connect with consumers, Milan Fashion Week turned to social media in February 2021, hosting their opening night as an Instagram Live party with a DJ set instead of an in-person soiree. They also wanted to keep the city involved, despite the dire circumstances. In a “symbolic gesture,” Carlo Capasa, the Italian Fashion Chamber’s chairman and chief executive, explained that people in the streets could watch live shows by iconic brands including Armani, Prada, Fendi and Dolce & Gabbana on big screens in strategic locations across central Milan. The initiative wanted to be “A reminder for the people of Milan that fashion is still part of everybody’s life, resilient despite the Covid crisis, still able to incarnate the city’s values: creativity and efficiency.” The welcome was so positive that following after-pandemic fashion weeks have kept that element.

Similarly, last year, Shanghai Fashion Week increased its exposure on social media by partnering with Tiktok to launch a China Independent Designer Support Program, which resulted into a new event called "Shanghai Fashion & Lifestyle Carnival". The Chinese fashion show also increased the number of participating brands (a 2.3 percent lift compared to 2020.) It was the only larger fashion week which increased the level of brands participation, exceeding the pre-pandemic levels of 2019, per China Economic Information Service (CEIS) data.

For Balchandani the pivot to digital has been huge: “If you were a player that wasn’t fully able to capitalize on that, then we’ve typically seen a deflection; brands and consumers absolutely have shown to us during the crisis that they’re open for change. They’re open to trying new brands.”

This democratization of fashion is also opening the doors to smaller businesses and newer designers who wouldn’t traditionally be able to afford participating in the top fashion weeks’ circuit. A good example of this approach is the multi-year partnership entered by Afterpay and the Fashion Weeks in London and New York. The buy-now-pay-later company looks to part ways the traditional top-down approach of these shows and shifting the focus from fashion editors and buyers to consumers. In New York, this deal has translated into fashion brands like Altuzarra streaming their runways digitally across the US via the Afterpay hub, allowing consumers to buy select looks from the catwalk. Immersive pop-up stores, digital activations at Time Square and Metaverse-first collections are being organized to bring together consumers and brands. “We’re giving small businesses exposure in a block-style shopping activation that they wouldn’t have been able to have in a traditional NYFW schedule,” says Molnar. “We’re really thinking about the whole gamete and all ends of the retail spectrum…it gives me goosebumps just thinking about it,” Afterpay co-founder Nick Molnar explained in a recent interview with ‘Grazia US’. The end game? Helping recover NYFW’s place at the helm of the international fashion circuit whilst aiding the city’s economy.

That renewed interest in alternative channels, formats, and more importantly, brands, was made even clearer in the Global Fashion Industry Index - Fashion Week Vitality Index Report 2021 published by CEIS. This report pointed out that while the global fashion industry is gradually recovering in a post-pandemic world, the digitalization of the fashion industry has been accelerated in these past couple of years, boosting omni-channel fashion weeks that combine online and offline shows to attract new consumer needs and desires. The latest edition of this report, released in September 2021, shows how Paris Fashion Week, Milan Fashion Week, London Fashion Week and Shanghai Fashion Week ranked the top four respectively, while New York Fashion Week moved backward to the fifth compared with its ranking in 2020 and China Fashion Week, Tokyo Fashion Week and Seoul Fashion Week ranked the sixth to eighth.

London Fashion Week
Milan Fashion Week
New YorkFashion week
Paris Fashion Week