While the novel coronavirus presents a unique set of challenges for the fashion industry, it’s certainly not the first hurdle to come our way. Some of the world’s greatest fashion houses have survived significant disruption over the decades… including the threat of bankruptcy, major world wars, and restrictive sanctions. They all bounced back to return to greatness; in fact, every one of these fashion houses are larger and more successful than before those hard times hit.
Here are three stories about Dior, Gucci, Salvatore Ferragamo, Tiffany & Co. and Tommy Hilfiger for inspiration…
Bankruptcy is the last word one thinks of when they hear the word, “Dior”, yet the financial woes of the fashion house’s former parent company from 1978 to the early 1980s could have resulted in the fashion house’s demise. Thankfully, a prescient businessman named Bernard Arnault purchased the company in 1984. Today Dior is part of Arnault’s luxury conglomerate, Moet Hennessy Louis Vuitton (LVMH). Dior is a thriving fashion house (even selling cosmetics and baby apparel); much of Dior’s financial success can be attributed to the consolidation and strengthening of the brand due to Arnault purchasing over 350 licenses to bring them back in-house.
The resilient Italian fashion house of Gucci was forced to forgo leather and other imported materials in 1935 due to a League of Nations Italian embargo. They could have closed their business, but instead, they developed a signature woven hemp to serve as a replacement. It wasn’t until the late 1940s, after World War II, that Gucci was able to produce leather goods again. Gucci may have been around for long, but they were nearly bankrupt in the early 90s due to family business disputes spanning decades. The Tom Ford Gucci era in the late 1990s and early 2000s turned the company around, along with a wise sale to PPR (PPR is now Kering). Gucci is one of the most successful fashion brands in the world and at the top of luxury consumers’ minds; the company was among the top five, most-searched luxury brands last year and 2019 revenue totaled €9.63 billion.
The iconic Italian luxury footwear, apparel, and accessories house, Salvatore Ferragamo, managed to not just survive – but thrive, after filing for bankruptcy in 1933 after orders dried up in The Great Depression. Hard times struck again, during World War II. Materials were scarce as the use of certain materials such as leather was restricted by law to support military supply and production needs. The Florentine company founded in 1927 got creative, working with unconventional materials such as cellophane and raffia as replacements. Ferragamo was hit hard financially a third time, thanks to the Great Recession. The company had 20 new stores scheduled to open in 2008 and revenues were hit hard. Salvatore Ferragamo annual revenues for 2019 totaled €1.38 billion.
Tiffany & Co.
Despite a thriving U.S. economy, Tiffany & Co. sales decreased 1% in the 2015 holiday season, driving down the publicly-traded company’s shares by rates as high as 15%. Their financial woes came from several sources, including creative failures, expensive international currency conversion losses, dealing with the impact of a hard-hit economy in their biggest market outside of the U.S. and Americans still spending conservatively in the years following the Great Recession of the late 2000s and early 2010s. Today, business at the iconic American company is a study in contrasts. Tiffany & Co. reported $4.4 billion in sales for 2018 – a 4% increase in comparable sales. They’re also in the process of an LVMH acquisition… a $16.2 billion deal.
Hilfiger launched his eponymous brand in the 1980s, enjoying plenty of commercial success. Then in 2000 when his brand fell out of favor with his largest consumer group, he lost a significant portion of sales- and took a hard hit to his personal fortune. Hilfiger continued working on his label’s turnaround until it recovered to profitability; he managed to sell the company for $1.6 billion just six years later.