What Fashion Can Expect From Biden’s Stimulus Plan | The Week Ahead, BoF Professional

What Fashion Can Expect From Biden’s Stimulus Plan | The Week Ahead, BoF Professional

NEGOTIATING A RESCUE

  • This week, Congress will debate the particulars of President Joe Biden’s $1.9 trillion economic stimulus package

  • The final bill is likely to include spending at or near the original figure, but a provision to raise the minimum wage is in jeopardy

  • US House Speaker Nancy Pelosi has said she expects a final bill to be passed and sent to the Senate within the next two weeks

The contours of the stimulus package that Congress will take up this week were set practically from the moment Biden took the oath of office last month. His administration wants to spend $1.9 trillion to jumpstart the economy, including $1,400 cheques to individual taxpayers. Starting Monday, lawmakers will debate the particulars, though the cheques, as well as tens of billions of dollars to boost Covid-19 testing and vaccine distribution, are expected to make the cut. Both will be welcome to fashion brands and retailers, which need a roaring economy and a speedy end to the pandemic.

Less certain is the fate of a provision to increase the minimum wage to $15, which would amount to a substantial raise for many retail workers. Political prognosticators say the provision is likely to be stripped from the final bill to get moderate Democratic senators on board.

The Bottom Line: Weaker-than-expected unemployment data shows how badly the industry needs this aid bill to pass. Retailers cut jobs in January, even as the last round of stimulus cheques were still going out.

BOOSTING BLACK-OWNED BRANDS

  • Ulta, Gap, Nordstrom and other major retailers have recently announced plans to improve their record on diversity and support anti-racist causes

  • Marketing emails mentioning Martin Luther King Day more than doubled this year compared with 2020, according to Edited

  • Organisations and campaigns including the 15 Percent Pledge, Harlem’s Fashion Row and Pull Up or Shut Up are boosting the profile of Black-owned brands and pressuring companies to change how they operate

The fashion industry appears to have learned a lesson from the harsh reaction to the black Instagram squares and generic statements of solidarity during last summer’s protests. Was it the right one? The amount of marketing around holidays such as Juneteenth and Martin Luther King Day has exploded. (Data tracking firm Edited found no record of any marketing emails mentioning Juneteenth prior to 2020.) The messaging has gotten more sophisticated, however, with brands featuring Black voices in their ads and pitching consumers on capsule collections featuring Black artists rather than empty slogans.

Those campaigns are still largely about selling clothes and makeup, however. More impactful is the recent spate of initiatives that include pledges to diversify executive ranks and carry more Black-owned brands in stores. These are meant to give teeth to the promises many brands made last summer and to show they are committed to addressing systemic racism within the fashion industry.

The Bottom Line: Activists say the work has just begun, and plenty of consumers are watching to see if in a year or two retailers will have meaningfully changed how they operate.

ANOTHER LOST HOLIDAY?

  • China has seen the most new Covid-19 cases in nearly a year

  • Travel during Chunyun, the 40-day holiday period around Lunar New Year (Feb. 12) is expected to hit a three-decade low in China

  • Brands typically see a big jump in spending on luxury goods from tourists and travellers visiting family and friends

Covid-19 has flared up again in China, just before hundreds of millions of people were planning to travel to celebrate the Lunar New Year with family and friends. Officials predict one billion trips will be made over the 40-day Spring holidays, a heady figure that nevertheless represents a three-decade low. The pandemic’s reemergence throws a wrench in the narrative that China’s economy, which came roaring back last year, can provide some security for global brands while lockdowns drag on in the West.

All is not lost, as Zoe Suen reported last week. Chinese consumers forced to stay home may opt to splurge online – an echo of last year’s “revenge buying.” And with a vaccine in circulation and the current outbreak relatively small, the long-term prognosis for retail – even in airports and tourist destinations – remains strong.

The Bottom Line: One sign the luxury industry is shrugging off the latest outbreak: Many duty-free retailers are ploughing ahead with expansion plans in China, clearly betting the muted Lunar New Year will be the last lost holiday of the pandemic era.

The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to brian.baskin@businessoffashion.com

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