SA fashion industry covers up for meltdown
What effect will the global financial meltdown have on the South African fashion, clothing and textile industry?
Internationally, a huge amount of the world's wealth has been wiped out thanks to the major credit crunch experienced worldwide. This has had a major effect on consumers and businesses across all industries, with consumers spending less, further compounded by a significant reduction in access to credit.
This slowdown has had a direct impact on retail fashion spend, with UK retailer Marks & Spencer reporting a 6,2 percent drop in general merchandise sales - that includes fashion. The UK has also seen several businesses close their doors recently, most notably Woolworths UK. This slowdown highlights the lack of financial liquidity now being felt by the middle- and lower- income earners, and industry analysts are expecting a similar drop to be reported by South Africa's credit retailers.
There are indications that the luxury retail sector has also felt the impact of this downturn. For example, Chanel has announced that it will be cutting 200 jobs in its manufacturing division due to the downturn. This is in line with predictions by JP Morgan that the luxury market will see sales slump by four percent in 2009.
The pinch is also being felt in New York, with the upcoming New York Fashion Week next month only having confirmed 52 shows this year.
The full effect of this crisis is still to be seen on the fashion industry. Locally, some retailers, such as Mr Price, have reported good returns - is there anything South African designers can learn from this?
In an effort to understand challenges facing the industry globally, and in South Africa specifically, the owners and operators of the Audi Joburg Fashion Week, African Fashion International, and the Motsepe Foundation, will host a discussion on the effects of the downturn on the local industry.
The aim of the discussion is to help those in the industry to better prepare for the bad times ahead, and to take advantage of the economic recovery when it happens.
The discussion will take place at Sandton Sun on Friday at 2pm. For more information, e-mail evan @africanfashionintenational.com