Declining market capitalizations, a direct reflection of the recent fall in stock prices, are wreaking havoc on fashion companies’ earnings and financing arrangements, and the worst might be yet to come.
For many public companies, the problem has been compounded by — and is at the same time linked to — weakening balance sheets and deteriorating financial results. Companies in the unhappy position of being worth less in the eyes of investors just as the financial cushion of cash on hand dwindles face steep impairment charges and further erosion of their credit ratings as well as increasingly less interest from investors in their stocks.
A Stella McCartney sketch of a custom dress made from protein-based silk in partnership with biotech lab Bolt Threads. The dress will be displayed at The Museum of Modern Art's upcoming design exhibition, "Items: Is Fashion Modern?"