A quick analysis of the fashion and ready-to-wear market, plus 3 tips from Bertrand Mahon, VP Operation Logbox at Webhelp Payment Services, whose credit management network covers 35,000 shops and more than 400 brands; a unique economic vantage point.

What a lovely surprise! Back in autumn 2020, who would have placed any bets on the fashion and ready-to-wear sector being back up and running? So many bankruptcies, outstanding debts, mass unemployment, disaffected consumers… the media was dominated by grim predictions. And yet here we are in autumn 2021, and the indicators are pretty positive… excellent even: at Webhelp Payment Services, we’re even breaking records – our monthly sales figures for September 2021 are the best since our company was founded, in 1984!

Without claiming to replace the pollsters, our “surface area” means that we really understand these markets: we manage more than 400 brands and 35,000 ready-to-wear shops in Europe and the United States, as well as department stores and online retailers. In 2021, we expect to manage more than 600,000 invoices, equivalent to 1.3 billion EUR.

Based on this, we can say today that wholesale distribution networks in Europe & the United States have weathered the storm – no doubt due to the exceptional financial support that has been offered, and thanks to the fact that brands have managed to restructure some of their debts. And we can attest to the fact that the current levels of debts and disputes are neither extraordinary nor worrying.

A general picture that is totally different from the catastrophic situation in 2008-2009, for example. This time, the market has been managed well – that’s our first observation.

Digital players have benefited from the health crisis

Our second observation will be less surprising: digital players have been able to take advantage of a period during which in-store stopping was prohibited or limited. In addition, many department stores – and even retailers – were able to develop their online sales channel quickly. In the end, the sector sped up its digital transformation, and so new buyers were recruited. But the wholesale market has still done well in this complicated, competitive environment.

Admittedly, overall, we are not yet seeing the same levels of activity as “before”, in other words in 2019, but everything is pointing towards the fact that there is some new momentum, and that it would be a good idea to make the most of that.

For 2021, according to a study carried out by Euler Hermes, a partner of Webhelp Payment Services, a rebound of +14% is expected in the turnover of French textiles and clothing, but we won’t be going back to pre-crisis levels before 2023. As for marketplaces, they grew by +27%, so twice as fast as in 2019 (according to Fevad).

Let’s allow ourselves to dream a little: what if 2022 were to surpass the performance we saw in 2019? If you spend some time at trade shows, and according to our clients, that idea isn’t as crazy as it might seem!

Tip #1: don’t be timid

Faced with this new momentum, it’s a good idea not to hold back. During the crisis, brands and the wholesale market protected themselves from risk, including in particular by reducing the number of models or collections.
Now, we need to turn over a new leaf and get away from this “crisis mentality” that holds initiatives back. Although some supply chains have been disrupted, a return to normal is falling into place. And consumers – who have saved a lot of money in Europe – are rediscovering the desire to treat themselves, to step out of the gloom and even to build a better world.
Brands that are more daring will win market share. This is backed up by the spectacular growth seen in ethical, second-hand and eco-friendly fashion.

Tip #2: watch out for signs of impending failure

We know that there are some warning signs before a shop or a retailer defaults. That’s why we advise our clients to watch out for “weak signals” that indicate a potential breakdown. In particular, levels of debt and disputes should be closely monitored!

To that end, we have created indicators, alert thresholds and procedures to detect and mitigate financial risks.

Tip #3: take national and international payment practices into account

Our extensive experience of national and international markets backs up this advice – the crisis hasn’t changed anything in this area: you need to take into account the specific characteristics and payment habits of each country or economic area. The desire to impose “unique conditions”, with exactly the same payment deadline for all European countries, for example, runs the risk of significantly penalising your business.

To sum up, Webhelp Payment Services has unique quantitative and qualitative information: we have local bases and have been pooling millions of pieces of data from brands and stores for more than 30 years. That means that we understand what really happens with payments, depending on the stakeholders and the countries, in real time. This customer knowledge is a key asset when it comes to making the most of the recovery that lies ahead.

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