Last week, labor disputes shook the fashion industry. Meanwhile, Matthew Williams’ 1017 Alyx 9SM got a big jolt of new funding and Burberry saw its sales slow way down. Don’t forget to subscribe to the Glossy Podcast for interviews with fashion industry leaders and Week in Review episodes, and the Glossy Beauty Podcast for interviews from the beauty industry. I’m sure –Danny Parisi, sr. fashion reporter
Labor disputes across the industry
The outdoor apparel and accessories retailer REI is in a labor dispute with its own workers, as of last week. Workers who are represented by two different unions — United Food and Commercial Workers International Union and the Retail, Wholesale and Department Store Union — accused REI of multiple bouts of union-busting, including stalling bargaining with the unions, retaliating against employees who led unionization efforts and restructuring jobs to weaken union representation.
The complaints have been brought to the National Labor Relations Board, which will hear the complaints over the coming weeks. In the meantime, REI has denied that it has retaliated at all — but these complaints aren’t new. Union reps aired many of the same grievances in July of this year. REI, despite its progressive reputation, has vocally been against unionization at its stores. It hasn’t voluntarily recognized any unions, forcing the workers to vote for representation instead. REI CEO Eric Artz said last year that a union would get in the way of the company’s ability to respond quickly to the changes in the market.
That’s a classic anti-union talking point, similar to ones espoused by other CEOs eager to curb collective bargaining at their companies. In 2015, Buzzfeed CEO Jonah Peretti said unions were great but “not right for this company.”
REI’s labor dispute comes at the same time as an even larger and more pressing conflict is playing out in Bangladesh. The country is the second largest producer and manufacturer of apparel behind China, and unionized garment workers in Bangladesh are currently striking for better pay. It’s likely that, thanks to the pressure from unions, as well as an open letter sent by a group of more than 2,500 fashion brands and retailers that source goods from Bangladesh, the workers will get the pay they’re asking for.
Matthew Williams gets funding for his personal brand
1017 Alyx 9SM, the extravagantly-named fashion brand from Givenchy creative director Matthew Williams, is set for an expansion. WWD reported that the brand, which Williams sometimes refers to as just Alyx, secured investment from Hong Kong businessman Adrian Cheng.
Cheng took a majority stake in the company on Friday with Williams saying he planned to use the funding to open boutiques for the brand, likely starting in Paris. Expect to see more from Alyx soon.
Burberry isn’t immune to luxury slowdown
Like many in the luxury industry, Burberry is feeling the pressure of slowing demand for high-end goods. The British brand reported quarterly earnings last week that showed only a 1% growth, meaning it will likely miss revenue estimates for the year. Shares dropped around 10% on the same day the news came out.
CEO Jonathan Akeroyd blamed the macroeconomic environment for the slowdown. He’s right, in the sense that almost every luxury brand, even the top players like LVMH, are reporting slowing sales right now. But Burberry is in a transition phase with new designer Daniel Lee and needs to make a good impression with shareholders right now.