You might not know Batsheva Hay, Christopher John Rogers and Carly Cushnie. They are emerging independent designers based in New York with relatively small namesake companies.
But they have also been, over the last few years, labeled “names to watch.” They have won awards, dressed celebrities and been heralded at fashion week. In a few years, you might well have worn their clothes. Yet for now they are all sitting in their various apartments gnawing their fingernails over the same single question: Can they stay in business until the coronavirus curve has flattened and people begin to buy again?
Unlike the fashion business in France and Italy, which is dominated by big heritage brands, independent designers are the underpinnings of the American industry. And, despite the CARES Act signed last week, they are almost all at risk.
“We could lose a whole generation of younger designers,” said Josh Goldman, a co-founder of the Chicago boutique Ikram. “It is possible that the idea of being a small independent designer that is the dream of so many kids in fashion school will become a thing of the past.”
Of the 477 members of the Council of Fashion Designers of America (CFDA), almost 40 percent, by far the largest number, is made up of brands that were worth under $1 million last year. The next largest percentage, 22 percent, are brands that earned under $5 million.
And one of every three of them is headquartered in New York, both “the epicenter of the American fashion economy, and an area that has already been, and will continue to be, severely impacted by this global crisis,” as Tom Ford, the chairman of the CFDA, put it.
Disproportionally dependent on wholesale accounts — most do not have their own stores or a particularly robust e-commerce operation — many were already in trouble after the closing of Barneys and Opening Ceremony, two stores known for championing new names.
“They live from shipping cycle to shipping cycle, no matter how glamorous they may appear to the public,” Gary Wassner, a factor for 450 small fashion businesses in New York, wrote on March 21 in a letter to Governor Cuomo.
As department stores and specialty boutiques have shut their doors, “bankruptcy is a hard reality,” said Steven Kolb, the chief executive of the CFDA.
“I’m getting dozens of calls a day,” he said. “That’s what scares them.”
According to a survey of 2,136 retailers in North America by NuORDER, an e-commerce platform that connects brands and stores, 63 percent of stores have canceled orders that have not yet been delivered; 29 percent expect to reduce their next season order by half; and 21 percent expect to extend their payment terms to 60 to 90 days (15 percent want to extend past 90 days) instead of the usual 30 days.
Theoretically a designer could sue a department or specialty store for changing the payment terms, but in practice, Mr. Wassner, said it does not happen; the designer can’t afford it, and also wants to maintain the relationship with the outlet.
That means that designers could wait three or four months before seeing any money from orders they have already paid to make and ship. They are hoping the CARES Act and A Common Thread, the newly established CFDA/Vogue Fashion Fund, can get them through, but no one knows if the money will arrive in time. Here are some of their stories.
These interviews have been edited and condensed.
Christopher John Rogers
Mr. Rogers, 26, founded his company a year after graduating from the Savannah College of Art and Design in 2016. He has a signature style that combines Joan Crawford and the Cotton Club, heavy on lavish fabrics and saturated jewel tones. His clothes have been worn by Tracee Ellis Ross and Rihanna.
In 2019, he was named the winner of the CFDA/Vogue Fashion Fund, the biggest American prize for new talent. The prize, which includes mentorship, is $400,000 delivered in three tranches. The first (received around the new year) allowed him to hold his show and upgrade his fabrics; the second is due in April and the third in August.
“If I hadn’t won the fund, I don’t know what we would be doing now,” he said in a call from his boyfriend’s apartment in Bushwick in Brooklyn, where he is holed up, miles away from his SoHo studio (the one he moved into in January) making mood boards in his bedroom.
Mr. Rogers said:
“As of spring, we sold to three stores: Net-a-Porter, Forty Five Ten and MacMillan in California. We did a showroom in Paris for fall 2020 and had a lot of great international stores, which we thought could really help move us to the next stage of the business. But with the store closures and people not going to events, that is all on hold. We were planning on adding eight to 10 new stores, but all except one said they could no longer commit to fall orders.
Then Forty Five Ten announced they were closing for the foreseeable future, so their fall order was canceled, too — and they have only paid for half of spring, which has been delivered. We are still trying to get the other half of the payment. Bergdorf Goodman was the new store that didn’t cancel fall, and we have sent an order confirmation to them, but we haven’t heard back.
We don’t have our own direct-to-consumer, so we are really dependent on Net-a-Porter, which has as online exclusive with us. Their buy for fall was smaller than for spring, but it’s enough.
In a way, I think being small has protected us because we have so few employees and no store, and we do only two seasons: fall and spring. Also we ask everyone to give us a deposit so we have some initial budget to work with. My feeling is: If you can’t at least pay for me to make your clothes, we can’t make them. The problem is figuring out the future.
I’m still paying health benefits and salary to my employees, and I would rather invest in that than putting on a show. My studio costs $5,500 a month, and I have asked my landlord if I can pay half that because we can’t be in there. He hasn’t responded yet. We make everything here and fit it on a model, so we know how much fabric to buy, but to do that you need a person, which obviously we don’t have now.
I have asked to push fall deliveries back, initially to August but now September. That would be OK with a shutdown through the end of April, but if it lasts longer than that, I don’t know. We’ve been applying for some small business grants, but because I started taking in money only last year, I don’t qualify for all of them. I might have to break quarantine. We have to do fall orders if we are going to have a business. I can’t afford to miss a season.”
Batsheva Hay
Ms. Hay, 39, founded Batsheva in 2016 after a stint as a lawyer. She was at the forefront of the recent trend toward post-male-gaze prairie dress, an aesthetic that could perhaps be best described as ironic Amish. The line is now sold in about 50 stores around the world.
The day before Governor Cuomo closed all the factories in New York, she and her family (her photographer husband and two children, ages 5 and 7) moved to a friend’s house in South Salem, N.Y. She is trying to run her business from there, in constant contact with her two employees.
“I’ve been looking at oven mitts, aprons, tea towels — things we can make using the fabrics we have that people might actually want now,” she said.
“We always ask for a deposit upfront, but of my 50 stores, maybe seven will do that. And no one is paying now. Some want to pay later — some have a total freeze on outgoing payments. I am currently owed $100,000 from spring-summer orders that were delivered a month or two ago. One of my big stores in France emailed all their clients and claimed force majeure and said they were not paying for anything. They owe me $10,000.
I’d say about a sixth of the stores have not paid. I email them every day. I’ve gone from being really sweet at first to having no shame to, at this point, not knowing what to do. Should I out them to my Instagram followers? It’s a problem because I really need my spring payments to finance the next season. I haven’t ordered fabric because I don’t want to start fall-winter without more clarity.
We’re about to ship prefall, and I am afraid of the reaction I am going to get. I’m trying to reconfirm, get prepayment if possible. I’ve had about 10 cancellations and 15 confirmed orders, for prefall and fall, and I am waiting for the rest. I’d rather have a cancellation than pay to make 150 examples of one dress that I am stuck with and can’t sell.
I had to figure out my absolute bottom line. If I can sell a couple of things online through my own e-commerce site, I can pay my employees and make rent — $4,000 for the office — and just get through this. Without direct-to-consumer I would be having major problems immediately. Everyone is trying to strike a deal with their landlord. I was about to sign a lease on a store a week before the shutdown, and thank God I didn’t.
We’ve applied for grants, but they seem to largely cover payroll, not production. I need at least six figures to survive and pay my employees and rent. On days like today, when it’s 3 p.m. and I haven’t sold anything yet, I just get this creeping, worried feeling.”
Carly Cushnie
Ms. Cushnie, 36, is British, attended Parsons and founded her company 12 years ago with a fellow student as Cushnie et Ochs. Two years ago, she restructured and went out on her own. Some 100 stores now carry her trademark blend of architectural body-conscious urbanity. She is working at home in Bed-Stuy, eight months pregnant, juggling her one-year-old and her 12 employees.
She said:
“Initially we thought we would be OK, because 95 percent of what we make is produced in New York in the garment district, so we had our spring orders completed. But now that’s all been shut down.
The biggest issue for us is retail. Stores were already having problems before the virus. Now they are canceling orders or reducing them, and lots of things are on sale. We have retailers who asked to return spring, but we had to say no. We paid for the fabrics, labor, warehouse, shipping. Then they wanted to return a portion of it, or pay later.
Right now we would normally be shipping prefall, but many retailers don’t want it until June or July, or even later. Lots of retailers are calling to make cuts or cancel fall entirely because they think they will use prefall as fall. I’d say our total fall orders have been reduced by half. We’re missing a quarter’s worth of money. Payroll protection doesn’t pay for that.
It’s at a point now where everyone is really freaking out. My V.P. had to say to one retailer: ‘You have a multimillionaire backer, and we are a family-run company. The likelihood of us weathering this storm versus you is entirely different.’ I’m definitely concerned about getting through it. I haven’t even thought about September.
Every other day I game out worst case and best case with my senior team, go over what needs to be done and what cuts can be made. I don’t want to order any fabrics — or spend any money at all. For sure we won’t do a show this year. The whole senior staff is taking reduced salaries, by about 50 percent. I am doing my best to keep everyone employed, but I don’t even know what will happen by the end of the week.
Someone on my team is looking into the small business loans, but I am not overly optimistic. My VP went to Saks before the shutdown just to see what was happening on the store floor, and a sales associate told her people were afraid to touch the clothes, afraid to touch the hangars. I don’t know when that will change.”
