Recessions ripple.
The waves from initial impact—felt long after the headlines—have moved on. Indeed, the 1929 Great Depression had lasted a whole 43 months, as ripple after ripple ravaged the US economy. There’s no reason to think this one is going to be any shorter. But, that can be a good thing—like a cobra shedding an old skin. It’s all about growth. But this time won’t be about growing profits. Instead, I’d wager it would be about growing collaboration. If nothing, climate change has shown we’ll all suffer the same fate if we don’t work together. Never have all of humanity been tied together for the same goal—survival.
Yet, we still live in a capitalist world, and that’s not going to change any time soon. So, can we ensure sustainability? Not just for the world, but for our brands as well? Fortunately, there are lessons we can take from the 2008 recession. While officially that recession had lasted only 18 months, the ripples on the apparel industry changed the market as we know it.
I attribute the 2008 recession to the downfall of family businesses over the preceding six years, and the scaling back of established British suppliers such as Dewhirst. Although we shouldn’t discount the globalisation of the UK’s New Labour policies too. Yet, where black holes arise, there too is opportunity. Li & Fung would not be the beast it is today without that recession. Neither would brands such as Gymshark, which have achieved similar success. No doubt their offering is inspired. But the recession primed the market.
Unlike fast fashion trends, each recession is unique. This time I doubt we will see the same increased productivity and production as times past—in part due to the rising awareness of our environmental impact, and the maxed-out credit limit of global governments. Add in the embers of a global pandemic and a Russian invasion, and it’s looking rather like the last days of the USSR. It’s all falling apart.
2006 was a boom year for many in the sports and outdoor industry. Fast forward a few years, and the market was flipped on its head. During that period, one family business had gone from being the largest outdoor company in Eastern Europe to near irrelevance. While they weathered the 2008 recession well, they didn’t see the ripples coming.
By 2010, brands such as North Face and Berghaus were using Eastern Europe as a dumping ground for excess stock, having had no foothold there before 2008. Indeed, it was rather reminiscent of the Russian markets—those coming across the border, selling their belongings to ensure survival. It coincided with the rise of Polish outdoor brand 4F, who used cheap materials to undercut the brands who were still pushing performance over price.
Today, those family brands are no more. 4F has massively expanded throughout Eastern Europe. And the well-known western outdoor brands are plodding along. After a shaky start to the year, sales have done OK. The news isn’t so good for the likes of Nike and Adidas however, who have posted warnings on excess inventory. We’ve not heard the same warnings from the outdoor brands, who perhaps have learnt from the stock dumps of 2010—ones which Nike are already starting to imitate this time around.
