Beachwear, Resort Retail Weather Coronavirus Storm

MC2 Saint Barth's spring 2020 swimwear collection.

Among the myriad of concerns the coronavirus outbreak has created, consumers worldwide are starting to question their summer vacations. Will they be able to go away — and, if so, will they be able to go to the beach?

Since its spread, the pandemic has seen travel both between and within countries almost disappear, with many airlines cutting capacity by 90 percent or more. As with almost everything about the pandemic, it’s hard to predict what the upcoming summer season will look like in the Northern Hemisphere. European Commission President Ursula von der Leyen said in a recent interview that finding “smart solutions” will guarantee summer vacations will be able to go ahead as planned.

Despite her positive projections, according to research conducted by the World Travel Organization, or UNWTO, the global flow of tourism could fall by 20 to 30 percent this year compared to 2019. That translates into a loss of $30 billion to $50 billion in spending by international visitors. By comparison, during the 2008 and 2009 subprime financial crisis, the flow decreased just 4 percent.

“COVID-19 has impacted travel and tourism like no other event before in history,” said UNWTO general secretary Zurab Pololikashvili, speaking earlier this month ahead of the agency’s Global Tourism Crisis Committee at its Madrid headquarters. “With tourism suspended, the benefits that the sector brings are under threat,” although the industry, which accounts for 10 percent of global GDP, might lead the recovery, he said.

With fewer travel opportunities for consumers, swimwear and beachwear brands that typically generate the majority of their sales during the May-to-September period could see a sharp decline in sales this year. Global swimwear brands alone generated sales of $21.4 billion in 2019, according to Euromonitor, which, before the health emergency hit, had predicted a 1.6 percent increase in 2020 to $21.8 billion.

“The season will be hurt, first of all because the number of deaths will cast a shadow on the summer season, which is typically a joyful moment of the year,” said Massimiliano Ferrari, cofounder and chief executive officer of Italy’s MC2 Saint Barth. However, the executive is convinced beachwear will “represent a business savior for a lot of physical and online retailers. Summer is going to happen, albeit in a different way.”

“At a time when sales of fashion might decline, I see the category being less impacted, because it is aspirational in referencing a joyful, vacation mood, although a lot of people might not be able to actually go on holiday,” he added.

Vivek Agarwal, founder of U.S. eco-friendly swimwear brand Ookioh, echoed that sentiment. “I am an optimist, and I always try to look for the sunnier side. Travel-related buying could be severely impacted in the near future; coupled with cautious social distancing, it will have a dramatic effect on sales. However, I have always believed that a good product stands the test of time,” he said.

Ferrari acknowledged a decline in sales is unavoidable, but he described beachwear’s emotional undercurrent as pivotal in engaging customers after a few weeks of confinement, especially in the brand’s key markets such as Europe, the U.S., the Caribbean, the Middle East and Russia.

So too, believes Vera Drossopulo Bogdano, cofounder of Italian footwear brand Manebí, which launched in 2013 offering revisited espadrilles and subsequently added a full resortwear line also encompassing beachwear. She downplayed the much-hoped-for attitude of  “revenge buying” among consumers after they are free from lockdowns, but she expects binge purchasing will be a reality for luxurious and niche fashion.

“Manebí is probably not luxury but it’s strongly aspirational, which is not an easy goal for a premium label. Keeping a consistent identity within a niche market helped us to be recognizable and make a name for ourselves and probably in a moment of crisis like this, I think customers will tend to turn to specialty brands, scaling back on their purchases yet still tapping into niche products,” she offered, noting the whole resortwear category might benefit from this outlook.

Agarwal believes a single-product brand like Ookioh can benefit from “developing a more in-depth knowledge of the category and mastering it.” He also thinks that the outbreak will usher in a new era where customers will be “more aware of their needs and wants and will be more thoughtful in their spending, and the selection process in picking the products will be more nuanced.”

Ookioh’s spring 2020

To that end, he noted that eco-friendly brands like Ookioh, which employs Italian fabrics made entirely of post-consumer polyamide yarns and regenerated waste materials, would benefit from the shift in customers’ habits. “We have never tried to greenwash our customers and always wanted the customers to buy the product because it makes them look good and brings them joy. We have never been in-your-face about sustainability because we wanted them to enjoy this feel-good factor when they discover that Ookioh is an earth-friendly purchase,” he said.

“I think that people will still spend money on clothes, but…on key pieces, made sustainably and that have a certain element to them,” echoed Georgiana Huddart, creative director of British swimwear brand Hunza G. The designer joined forces in 2015 with the brand’s founder Peter Meadows, who established the label in 1984 banking on a flattering crinkle-stretch fabric intended for one-size-fits-all styles. “The advantages in being a single-product category brand are that you become then a one-stop shop for that thing,” she added.

In the aftermath of the COVID-19 outbreak she expects customers will tap into practical products, rather than upscale and trivial fashion, hence “as long as it’s a product people can feel they will use, I think being a single category works. Luckily for us swimwear is not something that is considered luxury; everybody needs a swimming costume or bikini,” even for domestic holidays, or to go sunbathing at the park, she said.

“I know our swimwear is more expensive than a high street door’s but everybody still needs one…I expect a sales decline but I don’t see it being a completely irrelevant product,” she contended.

As the majority of physical stores have been shuttered for the past few weeks across Europe and the U.S., concerns are mounting over the reliability of wholesale partners.

“We can rely on trustworthy wholesale partners that understand our products and can represent an opportunity,” Ferrari noted, adding MC2 Saint Barth didn’t experience order cancellations and that its partners pledged to accept delivery of the summer collections when the lockdown is lifted and stores eventually reopen.

“We’re committed to supporting those clients which comply with their orders, by postponing deadlines and payments…while the retailers that would withdraw them would eventually be pulled from our list of stockists,” he said. “It’s important to keep the pipeline intact, with suppliers, manufacturers, retailers and end customers getting together, each one complying with their commitments, so to safeguard employees, clients and the entire supply chain.”

Similarly, Manebí’s Drossopulo Bogdano said Italian retailers — which typically receive the summer collections in March and April — turned to the brand “voicing concerns over the uncertainties they are facing and asking flexibility, which we are committed to offer as long as we can hold out,” she said, adding Manebí’s styles are mostly carryovers that can be sold across seasons. Meanwhile, international wholesalers, which account for 70 to 80 percent of the company’s wholesale revenues, received their orders between November and February, ahead of the crisis.

A consistent design proposition is also helping Hunza G to dodge the worst, as retailers “can always shift their stock, and a reason is that it’s not discernible that that [specific] collection is three years old and therefore no longer relevant. Our products are pretty timeless and people pick and mix things that our wholesalers make it bespoke to their stores and customers,” explained Huddart. “We don’t get rid of all the old collections, we keep selling all of them so that people can pick what they want from each collection and that means the stock never really becomes old.”

Hunza G

Hunza G — which is available at Net-a-porter, Browns, Selfridges, Neiman Marcus and LuisaViaRoma, among others — has experienced a few canceled orders but Huddart praised the company’s business model, which is proving resilient. “We make to order, so we’re in a very good position. Lots of the orders that would typically ship in the summer or in May, some of them we haven’t even started to make so we’re not circling with tons of stock that is not going to ship,” she said, explaining production has been ongoing, as it doesn’t rely on big factories but rather on a single “old-school” manufacturer and a dyer, both operating on their own in the British countryside. Huddart added that the brand is also keeping up with deliveries, although logistics operations can now count on four employees instead of the usual 14, but nobody has been furloughed or laid off.

The COVID-19 outbreak proved bad timing for Ookioh, which had just started pivoting from a direct-to-consumer model to inking wholesale deals with select retailers, mostly in the U.S., as well as in Tokyo and London. “Luckily, there weren’t many orders to cancel. However, there is a looming uncertainty and a constant fear of receiving an e-mail canceling the order or delayed payments,” said Agarwal. These include the 2021 order from Urban Outfitters, where the brand landed in January and was sold out within weeks. “These discussions have taken a backseat for now. I am optimistic that we will be able to resume these conversations later in the year,” he said.

Meanwhile, production has been hit twice as the pandemic spread across the world. Ookioh’s bikinis and one-piece bathing suits are produced in China, where the lockdown has delayed manufacturing by six weeks, forcing the women’s swimwear brand to postpone the launch of the spring collection to mid-March.

Other special projects have also been walloped by the pandemic: A capsule collection made in Los Angeles that was scheduled for Earth Day had to be postponed, ditto for a tie-up with The Standard Hotels, which Agarwal expects to revive soon, while the drop of a special lineup done in partnership with Lou & Grey is under execution and will launch online shortly.

Hunza G, too, had to reschedule some of its projects, including an ad campaign shooting in Los Angeles for a drop coming out in May, and reconsider the launch of a children’s wear range. “We’re going to try and adapt and still be able to launch it,” noted Huddart. “We are going to have to cut down on styles because it’s too complicated to offer a whole range as production is at low capacity.”

Manebí, which last year introduced beachwear manufactured by a Bergamo, Italy-based company, had to find a plan B for the launch of its spring 2020 collection. “All things considered, it’s probably better to launch it at better times. We will probably unveil it in a couple of weeks as a pre-order,” commented Drossopulo Bogdano.

Some of these specialty brands, including Manebí, have been pushing hard to secure premium spots at international resort destinations, banking on the strength of the beachwear category to develop a retail network.

MC2 Saint Barth’s 42 flagships, including units in Saint Barth, Ibiza, Capri and Mykonos, are all currently shuttered, but Ferrari was confident in a return to operations at least in Italy from May 4. In 2020, the swimwear brand had planned three new openings — in Portofino, Italy; Juan-les-Pins, France, and Puerto Banús, a marina located in southwest coasts of Spain — and Ferrari stressed those units will be unveiled as planned. Although he expects a decline in footfall this summer, Ferrari noted “the summer season might last longer: People will probably go on holiday in September and October that are usually back to work in those months.”

Conversely, Drossopulo Bogdano argued that she expects “to feel the impact of a shorter season…and seasonal employees who cannot even benefit from wage support measures,” she said, lamenting a lack of official guidelines.

The Manebí flagship in Ibiza, Spain.  Courtesy of Manebì.

Manebí’s seven flagships are all shuttered, including the only international outpost in Ibiza, Spain. Three additional openings, in Rome and Taormina, Italy, and Saint-Tropez, were scheduled for April “but were put on hold because we were unable to finish the renovation works for which March should have been a crucial month. We will definitely unveil them this summer, but it’s hard to tell what to expect in terms of performances,” Drossopulo Bogdano said, adding plans to add other locations in 2021 in key resort destinations, such as Mykonos and Santorini, might be postponed to the following year. In 2019, Milano Investment Partners–MIP, a fund management company specialized in venture growth investments, acquired a minority interest in the company to help its expansion.

For the 2020 summer season, she forecast some of the stores might perform better, especially those located in seaside resorts where beaches are more spacious and social distancing will be easier, while a drop in footfall is expected in locations such as Milan, where the number of tourists will likely drop, and on the islands of Sicily and Sardinia that are harder to reach.

As both proprietary stores and retailers are impacted by lockdowns, online sales have been gaining momentum, helping brands big and small navigate the uncertain environment.

“Our [e-commerce] performance has experienced two different steps: March was disastrous because of the weather conditions that did not help drive sales, in addition to an uncertain outlook on the situation. So we had a slump compared to the same month in 2019,” said Drossopulo Bogdano adding they had instead forecast a 70 percent year-on-year increase before the outbreak. In April. “The situation started to normalize, people began to be less frightened and to look for a gratification in their daily lives and we registered a 40 percent increase — a figure that’s growing.” Footwear has been particularly strong and beachwear is also performing well, according to Manebí’s cofounder.

Ookioh’s e-commerce revenues are also spiking. “Our sales are increasing month-to-month, and revenues have doubled year-on-year, without spending on ads. Our repeat customer rates and online store sessions rate have increased by 65 percent compared to last year,” explained Agarwal, noting sales in the first quarter have already exceeded the entire 2019 performance.

“Our direct online sales are actually really not bad considering the fact that nobody can leave their homes,” said Huddart, acknowledging they’re lower year-on-year. “People have very quickly adapted to their home lives and so there’s a lot of celebrities and influencers that are trying to find a little bit of summer on their balcony. People are adapting to being at home and it’s not like everybody just stopped doing what they were used to doing.”

Originally printed in WWD, By Martino Carrera