Many challenges lay ahead for small brands but addressing them early is a good place to start.
The current COVID-19 pandemic that has gripped the world has forced several large retailers such as Gap, Ikea, and Nordstrom to temporarily close their stores or lay off staff. But while multinational chains have the capital to cushion the revenue lost, smaller brands simply don't have that luxury.
Slovakian-born model Michaela Vybohova is the founder and designer of her own luxury shoe brand Michaela V. But as the pandemic increases, so does Vybohova's concerns about the future of her business â and other smaller brands.
"Huge department stores in the USA are closing, and no one is sure what will happen to smaller boutique stores. It is unclear where the future lies," Vybohova contemplates.
With global uncertainty, financial strain is being placed on boutique owners to reduce their overheads and cut back on importing and purchasing. For Vybohova, this means that her brand has been forced to change the way they do business if it wants to succeed.
"Boutique stores usually buy their stock directly from us. But now many of them have shifted over to a consignment model, where I only receive the revenue from the product once it is sold in the store," she explains.
This places a massive burden on Michaela V, as all the risk is assumed by her until the stock is purchased. During the recent riots and subsequent looting of stores in the US, Vybohova suffered as a result.
"After some of the boutiques that sell my products were looted, I had to go to each store to do a stock count. It is difficult and time-consuming as I have to go in-person to see what has been damaged or what has gone missing."
To make matters worse, many small businesses and brands couldn't foresee the riots and looting and thus didn't have insurance against instances of public violence. Larger designers and luxury brands, on the other hand, are.
"Small brands are really struggling. It was a very different situation for Louis Vuitton during the lootings, since an international brand like that is well-insured. In fact, they didn't even worry about boarding up or protecting their shop windows," Vybohova laments.
She added that she has had to spend a lot of time in the warehouse in which her stock is stored, as she needs to reconcile what's missing. "As a small brand, my insurance is only for issues that occur when shipping of products, not looting. That is something that I never considered, and now I'm taking a huge hit as a result."
In Bynder's COVIDâ19 edition of the State of Branding Report, it was revealed that 57% of those surveyed believe COVIDâ19 will have a lasting impact on their brand. Just under 20% of the survey's respondents indicated that they need to make drastic changes in the way they do business.
In order to survive in the cutthroat world of luxury fashion during a global pandemic, Vybohova isn't planning on scaling back just yet.
"The first thing we did was to offer free worldwide shipping from our online store, and we also worked hard to negotiate with online retailers in order to have them stock our brand," she reveals. "We're also looking at expanding to India and Europe in order to help us cut down on shipping and warehousing costs."
She also has a word of advice for other fashion brands and boutique stores who might be buckling under the pressure.
"Don't get discouraged â be persistent in achieving your goals. I have learned the hard way that it's better to address challenges quickly before they become larger and handle them in a personal way. If you do that, you're more likely to succeed."