An Election Result that Expedited Ambiguity in the US Fashion Industry?

Many are still struggling to come to terms with what the leadership of the controversial President-elect, Donald Trump might mean for the United States and the world in the future. This presidency might mean a lot of uncertainty on the future of fashion in the US and even globally with his stances on trade and immigration by far which would leave a devastating impact on the supply chain and the workforce contributing towards this creative industry.

In a country and in the industry that celebrates openness and inclusiveness, his demagogic rhetoric could not only hurt sentiments but also damage the reputation and commercial activities of American brands globally. It offers little support and encouragement to the fashion industry with retailers experiencing slowed down business or brands filing for bankruptcy. Consequently, fashion retailing seems to be bearing the brunt of this outcome and is in fact already reflecting the damage. Post-election ongoing protests, demonstrations and street closures on the prime stretch of Fifth Avenue near the Trump Tower, a hub for many upscale retailers, has severely disrupted business in an otherwise crucial shopping period. While some retailers have attracted a crowd out of curiosity, others have issues with barricades blocking main entrances that are minimizing the footfall (Womenswear Daily, 2016).

Majority of the luxury brands also rely heavily on tourist traffic in driving full price transactions which would probably endure a long-term effect of Trump’s harsh remarks to curb immigration. The availability of new consumers would also decrease in place of such a regulation that would promote government-led or self-deportation increasing pressure on retail demand (Drapers, 2016). Inhospitable environment created by such policies would also act as a barrier to having a diverse workforce limiting the creative potential in an industry that thrives on it. The anti-Trump parades occurring in some major US cities’ key retail hubs signal more tough times for the luxury sector which is already struggling with the economic crisis and implications of the Brexit. In an already characterized poor performance quarter from some US retailers, the prevailing uncertainty and shock could further impede revenues and growth margins.

Trump claimed to bring back apparel manufacturing to the US to create employment – an almost non feasible task and in complete contrast to his own business that comprises of products often exclusively made overseas (WGSN, 2016). Cost of labour to allow a ‘Made in America’ to be incorporated in label tags would affect price points compromising on regional consumers’ love for great deals. The commitment of reshoring without thinking of the picture at large could cost the fashion businesses a fortune to recover from. Disruption to international trade would also restrict American brands from pursuing any global expansion or investment plans thereby shifting focus to domestic growth. Trade agreements that increase import duties on foreign products could trigger retaliation by countries that experience the impact, restricting American brands’ access and tarnishing relations with international retailers and e-tailers. The President-elect has already issued a video statement proposing intentions to quit the Trans-Pacific Partnership (TTP) which would result in severe implications for the apparel and accessories business as it would kill a free trade deal by 12 Pacific Rim countries (Business of Fashion, 2016).

Prominent members of the fashion fraternity have expressed concern and disbelief. A few are hopeful of American fashion sustaining its shine despite the implications with Melania and her stepdaughters’ public appearances generating retail traction.  Fashion has had a very rewarding relationship with Michelle Obama during her time as the First Lady with the fashion statements in countless public appearances. But will the fashion community that was devoted to and supportive of Clinton come to love and interact with Melania Trump, the new First Lady? To date designers have expressed disbelief with the decision, some have chosen to boycott dressing her altogether urging others to follow suit and no brands have issued press releases promoting her as their brand ambassador or even endorsements of their products.

While much of this may be Trump’s pre-election hyperbole, many brands are re-assessing their priorities and steps ahead.  Brands that continue to demonstrate value in its broadest sense despite pressures on their traditional retail models will emerge as winners. Trump’s election victory has caused an unforeseen headwind to businesses in the fourth quarter disrupting sales in a key holiday selling season. Whether or not Trump’s America realises the economic importance of this industry and is supportive of trade policies to keep American fashion vibrant abroad remains to be seen. Come January, the fight to control damage and keep the American apparel market relevant for the next four years begins.

The author is Pallavi Moghe, currently a fashion buying apprentice.

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