The economic hardship and challenges of the world have become more evident and affected almost every sector of the economy. The fashion business world is no exception. The world is a dynamic place and things are evolving almost by the second. Fashion icons don’t have to wait for a whole season to produce new styles or collections. In order to stay ahead of the game regardless of the downturns, Achim Berg and Leonie Brantberg have five rules that any fashion company can equip:
–Adopt a consumer-driven mindset: It is necessary to understand the consumer’s trend and the decisions they take to satisfy their style needs. It will enable them to adequately set product offers, prices and promotion so as to satisfy the needs of the consumer when it arises. They also need flexible response to currency fluctuations so as to consider all customers spread across the world.
–Establish operational readiness: Companies have to increase the end-to-end transparency and agility of their supply chain stores in order to minimise demand surprises, excess inventory and compliance issues. Doing that permits them to nearly foresee supply dangers, including financially vulnerable sellers, and oversee inventories to adapt to the money related effect of higher capital expenses and changes in remote trade rates. On the business side, good retail, channel administration and first class client experience will help in holding profits.
–Diversify the brand, category and geographic portfolios: The ability to acknowledge diverse market will help a company survive volatility. Companies therefore should reduce their dependency on a single country, brand or geography. This can be achieved by getting other customers in other locations, and adding or eliminating (sub)brands. Since the future is uncertain, the companies have to make sure that the brands added or eliminated still bring in as much profit even in the most challenging of financial environment.
–Ensure cash flow and manage cost: During volatile periods, cash is the priority especially in the business of fashion. The company should raise cash while they can in order to protect their balance sheets. Another factor to watch is managing fixed cost. If it is possible, the company can own the building it works from as real estate is always fluctuating. Labour and other cost can be kept as flexible as possible.
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–Develop an agile organisation model: Unpredictability makes pulling in and holding ability more troublesome. The best reaction for style organizations, which have since a long time ago battled with “ideal” authoritative structures, is an attention on long haul hierarchical wellbeing. Notwithstanding reasserting their organization values and making coordinated structures to send assets all the more quickly, they ought to create projects to upgrade working conditions, for example, work planning (especially for retailers), advancements and motivations.
Despite the unpredictability of the economy, the fashion business still strives. However, it is still imperative to take measures that would give better financial stability, if and when the time comes.
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Written by Nkem Ikeh
Images: https://kokoreview.files.wordpress.com, http://cdn.startupfashion.com, https://fashionindustrylaw.files.wordpress.com, http://fashion-angel.co.uk