THE RECESSION: WHAT DOES IT MEAN FOR FASHION AND HOW TO PREPARE

A new year means new self care resolutions, new exciting fashion trends...and, apparently, new economic changes. If you've been keeping up with the whispers spreading through the halls of the biggest fashion companies and organizations in the world, then you know that rumors of an impending recession are swirling around. Here we're going to break down what exactly is a recession, how the fashion industry will be affected, and most of all how to prepare so you're not stranded in the midst of it.

Let's get the obvious question out of the way: what IS a recession?? As defined by Investopedia, “A recession is a significant, widespread, and prolonged downturn in economic activity.” In the simplest of terms, this means money is down and prices are high. A recession usually comes about after some huge "financial, psychological, economic shift" like, say, a global pandemic we all may be familiar with. Between millions of people losing their jobs, an influx of spending and stocking up on essentials, the slow of production in multiple industries, providing resources and support to those in need and much much more...it's safe to say the state off the economy may never be the same. While society has quickly tried its best to regain any sense of normalcy left, a recession of sorts is almost inevitable at this point.

So second things second: are we realistically looking at a recession in 2023? The short answer is yes, yes we are. What this could mean is resources may become more scare than "usual" and, god forbid, people will start fighting over toilet paper again. But seriously, what does all this mean for fashion you ask? Well although 2022 was actually an incredibly successful year for the fashion industry and companies in general since the start of Covid-19, it's clear that the industry is going to suffer in some ways. Due to many global political tensions from the war in Ukraine to human rights violations in Iran, supply chain industries are suffering and there is now an energy crisis spreading throughout Europe. It seems that regional differences will come to the forefront, possibly more than ever. Many businesses may have to localize their business partners, which positively, may help the economy grow in those specific regions. In terms of international business, it could suffer.

Internally, fashion companies may rethink and restructure their businesses in order to combat the onslaught of issues on the way, such as creating positions to improve supply chain management complications or laying off workers to cut business costs. Furthermore, a recession may very well mean that fast fashion could unfortunately be looking at an all time high, with people not wanting to spend any more than they have to on clothes. This also in turn could mean that luxury brands and retailers may suffer significantly. Brands will have to work extremely hard in order to still remain attractive to consumers. This may look like investing more in online presence, since thanks to the pandemic the market for online business absolutely boomed. Phew. It might be time to start looking into that spring/summer wardrobe!

However despite all of this, a recession absolutely doesn't have to create a negative effect on your livelihood. Here are just a few ways you might want to consider preparing in the wake of a possible new reality:

1. If there’s any time to start expanding your personal skill set, it’s now. Usually a recession entails workers being laid off and in times of uncertainty, it’s best to rely on the value you bring to the table. Companies will only be interested in retaining the most qualified and valuable employees in these situations. Leveling up your skill set could also open the door to expanding your own business and/or service.

2. Finding creative ways to increase your income is a huge plus. Start delving into side hustles and finding smaller ways to earn some extra cash. Every penny counts!

3. Absolutely work towards paying off any debt you owe and keep it to a minimum. Larger payments like car/student loans you might want to hold off on, but smaller areas of debt like credit card payments are better to deal with sooner than later.

4. Really take the time to sit down and (re)evaluate your monthly budgets, cut off any excess fat and focus on your absolute needs. You also should ideally want to have an emergency fund that has enough money to cover three to six months worth of expenses in case of any recession related emergencies, like being laid off.

Even though it does seem that we are gearing up to head into some sort of recession this year, if you are thoughtfully as prepared as you can be you may find yourself not really being affected at all. Just like the fashion industry, the economy is forever changing. Keep up to date with the changes that are happening and you will always be in style.

Sources:

Amed, Imran, and Achim Berg. “The State of Fashion 2023: Resilience in the Face of Uncertainty.” The Business of Fashion, The Business of Fashion, 1 Dec. 2022, https://www.businessoffashion.com/reports/news-analysis/the-state-of-fashion-2023-industry-report-bof-mckinsey/.

Team, The Investopedia. “Recession: What Is It and What Causes It.” Investopedia, Investopedia, 19 Dec. 2022, https://www.investopedia.com/terms/r/recession.asp.