LONDON — Already on war footing as it helped businesses prepare for Brexit, the British Fashion Council is putting together a coronavirus fightback plan, including a survival package known as the BFC Foundation COVID Crisis Fund and digital initiatives to replace runway shows during men’s fashion week in June.
While the British government has already laid out a 330 billion pound package of guarantees for businesses; promised to pay 80 percent of the wages of workers on furlough due to the virus, and set out financial compensation for the self-employed, the BFC wants to do more and is adopting a twin-pronged approach.
It is lobbying the government to help with the specific needs of the fashion industry and looking to support the fashion community directly. It is urging designers to swap runway shows and presentations for content-rich online events and is pooling already-existing funds to help brands at most risk of failing.
Earlier this week, the BFC outlined its asks to the government, and on Thursday it held a virtual town hall meeting with men’s and women’s wear designers to discuss plans going forward.
Unlike in fellow European cities Paris and Milan, many of London’s fashion businesses are small, generating under 10 million pounds annually; they don’t have deep-pocketed investors, and they suffer from cash flow problems.
Even before COVID-19 took hold in the U.K., Peter Pilotto and Henry Holland both decided to wind down their businesses and pursue other projects, while Cath Kidston, the retro clothing, home and accessories retailer, confirmed last weekend that it was urgently seeking a new investor.
In an exclusive interview, BFC chief executive officer Caroline Rush said some British businesses “are going to need support very quickly if we’re going to help them get through this.” Rush added that many of the problems stem from the immediate season and the cancellation of orders.
“These designers are sat on millions of pounds worth of stock. They’ve been refused by stores because demand has dropped off the cliff. Orders have been canceled and that’s providing significant challenges” for wholesale and direct-to-consumer businesses alike, she said. “We’re looking at how the government plugs that gap — in a way that is very specific to the fashion industry.”
While some stores have honored orders, Rush added, others have taken a blanket position of canceling them or trying to renegotiate terms. This isn’t just in the U.K., it’s globally, in France, Italy and the U.S., putting a particular strain on smaller designers, for whom cash flow is a perpetual problem.
In response, the BFC has drawn up a survival fund, pooling the money that would have gone into its 2020/21 talent support initiatives — NewGen, Fashion Trust, and the BFC/GQ and BFC/Vogue Funds.
The BFC Foundation COVID Crisis Fund will award 1 million pounds mainly to designer businesses, with a portion of the money going to students. Alongside the new fund, the BFC is launching a fundraising company, asking businesses and individuals alike to donate to the pool, and to enhance the support the BFC is already giving to designers.
An announcement is expected today.
Rush said the allocation of funds will be based on need, and the ability of companies to demonstrate how those funds will help them survive during the crisis. “It’s one of the things within our control. At least we feel like we can do” something to help, she said.
The fund will open in the next week, with applications closing in early April. The BFC said it is looking for established, U.K.-based designer ready-to-wear, accessories or fine jewelry businesses that are independent, without any outside equity funding.
The BFC is working on other fronts, too, including how to transform London Fashion Week Men’s, which was planned for June 13 to 15, into an event in this new age of lockdowns, social distancing and limited international travel.
The organization is examining what the men’s wear shows will look like, and there is no doubt they’ll be virtual.
“It’s important that there is not a void. Particularly for our industry, there needs to be a platform. And actually, it’ll be a good time to reflect and for the designers themselves to have a voice in terms of where they are, what they’re thinking and how they’re responding to this whole situation,” Rush said.
More details about the June event will be released in a few weeks’ time. It is still too early to make any decisions about the September spring 2021 shows, although designers are being urged to make their pre-spring, men’s and spring 2021 collections work together as much as possible.
“We’re a very creative industry, and the idea that we could create a platform for content conversation, storytelling to keep the continuity through the season is going to be incredibly important,” she said.
Rush added that the organization is scenario planning for the rest of the year, including the staging of the British Fashion Awards, which are due to take place on Nov. 30.
“Right now, we’re prioritizing what we can do to get support to businesses over the next two weeks. Then we can start looking at the other scenarios and talk to partners. I think in two weeks we’ll have a better sense of where the U.K. is on this curve, and where the other fashion capitals and international fashion brands are, as well,” she said.
In the meantime, Rush said the BFC will continue to urge the government to pay more attention to the specific needs of the industry.
As reported earlier this week, the BFC has been meeting with members of the government.
It is asking lawmakers to help businesses that are dealing with challenges of canceled or suspended orders so that they can finance the production of future collections, pay their employees and manage risk through loan schemes that won’t need to be paid back if retailers don’t honor their contracts. They are also lobbying for relief on business taxes, and rent relief.
Rush added that the government also needs to address the network of freelancers or seasonal, self-employed workers on which fashion businesses rely.
“There needs to be a very specific stimulus that does work for creative businesses, particularly businesses working from serviced, group or incubation type offices,” said Rush, adding that the COVID-19 challenges were most acute for freelancers who’ve essentially lost 100 percent of their income due to social distancing and business shutdowns.
“It’s terrifying for those individuals. They’ll have rents and mortgages and the stress of just being able to meet and pay their bills,” she said.
On Thursday evening, Britain’s Chancellor of the Exchequer Rishi Sunak unveiled a package of measures to help freelancers, a result of pressure put on the government from fashion and other creative industries. He said the self-employed would be paid 80 percent of their declared profits, up to 2,500 pounds a month, to help them cope with the COVID-19 crisis.
The money will be paid in a single lump sum, but will not arrive until the start of June, Sunak said, adding the grants would be available for at least three months, and possibly longer.