About 10 years ago, Americans (and much of the developed world) suffered the worst effects of the Great Recession. Net worth declined while unemployment rates skyrocketed, and consumer spending drastically changed in ways that are still being felt today.
One would think that would make the period between 2008 and 2009 the absolute worst possible time to launch a fashion brand, but one would be largely wrong. A number of the industry's most unwaveringly successful brands — whose businesses remain strong a decade later — launched in the midst of the Great Recession: Prabal Gurung, Victoria Beckham, Altuzarra, Reformation, Lisa Marie Fernandez, Garrett Leight, Cushnie et Ochs, A.L.C. and Christian Siriano among them.
While the economy is in better shape today, consumer habits continue to shift in ways that could be seen as comparable to that time, at least in terms of magnitude. Yes, we're talking about the so-called "retail apocalypse" — a pretty tired and overused term, we know. But it's a fact that as newer fast-fashion companies, online retailers and direct-to-consumer brands have gained millennial and Gen-Z market share, we've seen older brands and retailers crumble.
That the brands who both launched and thrived during the Great Recession are the same ones who are coming out on the other side of more recent industry upheaval, we posit, has been no coincidence. So, we reached out to a few designers who launched during that time to find out why they fared so well, and why they continue to do so.
While disposable incomes may have dwindled for many people during the recession, those who had been buying luxury fashion likely still had money to play with; however there were also social forces working against frivolous spending — it was seen as poor taste to wear flashy displays of wealth while people were losing their livelihoods. In other words, rich people were more discerning with how they spent their money.
"People didn't want to stop buying things, they were just being more selective," says Garrett Leight, who has a namesake eyewear company with stores in New York and California. (He opened his first boutique in 2009.) Knowing this helped Leight to narrow down his vision as he conceptualized his brand. While the timing of his decision to start a company (he'd been working for his parents, who founded Oliver Peoples during the 1987 recession) was a coincidence, it majorly informed his price point and choice to produce in China in an effort to keep prices down and profit margins high. He filled a niche by creating eyewear that wasn't cheap, but that cost less than luxury brands.
"[Launching after the recession] gave me guidelines and something to stand behind and create around rather than maybe launching... when things are really great, you don't have that discipline," he says. "It demanded that I focus on value and understanding what creates value — price, service, exclusivity — and product that just lasted longer, which is why I explored made in China." While historically, consumers preferred eyewear made in Italy or Japan, Leight felt that millennials like himself wouldn't really care about the provenance of their sunglasses as long as they were good quality, and he was right. He adds that because so few new brands were launching at that time, there was less competition in the space than there would be during a healthier economic time.
"The buyers told me they thought newness was something a customer would spend for [versus] something they already had," says Lisa Marie Fernandez, a former fashion editor who launched her namesake line of high-end swimwear in 2009. She largely owes her success at the time to creating an entirely new product — neoprene bikinis — in a time of very little innovation or variety in the swim market. She was also thankful that, because of tighter budgets, her initial orders from retailers were small; had they been much larger, she may not have had the resources to fill them while maintaining the attention to detail and fit that make her wares so desirable.
For Reformation founder Yael Aflalo, it was the recession that effectively put her in a position to start the brand. Her previous fashion label, Ya-Ya, went bankrupt as a result of it, and she was forced to start over. As she did, the fate of her previous business helped guide her new endeavor. "I think it just made me very frugal," she says. She began by selling refurbished vintage dresses out of storefronts in New York and LA and that eventually turned into a full-fledged, direct-to-consumer brand. "I realized people still wanted to buy clothes, but there weren't a lot of affordable options, so I really wanted to create a brand that had good quality, fun, fashionable clothing at an affordable price point," says Aflalo. Again, value was key. "It was a new price point," she adds.
Carly Cushnie owes much of the initial success of her line Cushnie et Ochs, which debute in 2008, to its timelessness. "The consumers that were willing to spend money at that time wanted pieces that were timeless — pieces that could last throughout the seasons," she says. "Our collection was really sleek and modern, not too trend-specific."
"It was still hard to get retailers on board, and most didn't the first season, but a season later they did and then we just kept building and building," says Christian Siriano, who also launched his eponymous label in 2008. The climate at the time inspired him to partner with mass retailers that consumers were still shopping. "Timing is everything and that is why I started to partner with bigger brands like Payless, Victoria's Secret, Starbucks, Puma, Disney, LG, etc., all in my first two years of business," he says. "Those partnerships helped grow and gain a customer that will always be shopping at that type of retailer. We gained a designer customer and a mass customer and we knew that would help grow the business into so many interesting categories."
Aflalo, Fernandez, Cushnie and Siriano all point out that the brands hardest hit by the recession were those which had already been in business for a while and suddenly began seeing significantly lower sell-through, which could result in problems like excessive inventory, difficulty paying employees and making rent for offices and stores.
"I think that if the collection had launched the year prior, there would have been greater setbacks as the company would have risen and then quickly tanked. Instead, the brand grew slowly and cautiously," says Cushnie. "Because we had no business the year before, we honestly only could move forward and up, so that helped us a bit," echoes Siriano.
"I think the recession was terrible for a lot of businesses, but I think it presented a lot of opportunity for innovation and disrupting industries," says Aflalo. "When you have companies going under, it presents opportunities for new companies."
For many of these designers, the things that kept their businesses afloat and the lessons they learned during the recession have helped them survive to this day. Fernandez has remained focused on innovation: She regularly develops her own proprietary fabrics including ones like seersucker and denim that are not traditionally used in swim, and became a pioneer in the resortwear category. She's also kept her team small and nimble and resisted pressure to expand into other categories and open stores. "There was a lot of talk about expanding quickly and all these categories and you should be doing this, doing that. They were just churning out merchandise." she recalls. "People had to shave categories."
Siriano also kept his team small and tried to hire people with multiple strengths. "My director of sales that is doing millions in sales a year with us started as an intern that we found on freefashioninterns.com and I think that is special. She has been with me now for almost 10 years," he says. It also informed his offering: "We needed to make great clothes that women would actually wear, so that is what I did. We also need to make clothes for many different types of women. All sizes, all countries and cultures, etc. We tried to have something for everyone."
"Too much too fast can be a problem for a lot of brands. Going slow, staying calculated and always being aware of how quickly a market can change is really important," notes Cushnie.
Leight says launching at that time probably helped him stay disciplined. "Over time, you just have to keep watching everything that's going on and be focused," he says. "It's a constant learning experience growing a brand and entrepreneurs are constantly at risk on a daily basis of losing everything and that's a reality."
Similarly, having her first business fail made Aflalo realize how quickly things can change. "I'm aware of economic downturn, that it's always possibility and to be prepared for it, and not over-leveraging yourself — that's a dangerous position to be in," she says.
Ultimately, it might all go back to the old adage/Kelly Clarkson lyric: "What doesn't kill you makes you stronger."
"Nothing could have been harder than 2008 and all the struggles that came only with it," says Siriano. "Designers that are launching now are not dealing with a horrible economy like it was. Customers literally were not shopping then; it was dead, so many brands didn't recover. I think we were strong, worked hard and pushed through."
"It does give me hope that if the business survived a time like that, successfully pulling through to the other side, then it can survive almost anything," says Cushnie. "It's just important to always remember what the brand stands for and what you're capable of with very limited resources. Sometimes success can make you forget how dynamic you were when you were just starting out, when the brand had very little."