The business model that could save fashion—and why it isn’t everywhere

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Enormous piles of unsold clothes are languishing in warehouses across the United States. When the lockdowns began in March, many people lost interest in buying fashionable clothes, saddling brands with millions of dollars of inventory.

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That wasn’t a problem for designer Misha Nonoo. Three years ago, she pivoted her eponymous brand to on-demand manufacturing in factories in Peru and China that only start sewing a garment after a customer places an order. So when many women stopped buying dresses in favor of sweatpants, Nonoo was able to adapt, without wasting product. “My business model allows me to pause my operation from one day to the next,” she says. “I haven’t had to worry about putting unsold product on sale, or figuring out how to offload it.”

COVID-19 has exposed how tenuous and fragile the business of fashion has become. Iconic department stores such as Neiman Marcus and Lord & Taylor have declared bankruptcy. Mall brands, including Brooks Brothers and J.Crew, are dying. Creative business models that once seemed niche and not exactly scalable are now a much more promising lifeline for the fashion industry. Thakoon, for instance, has pivoted from designing for the runway to launching a direct-to-consumer brand focused on elevated women’s basics. On-demand manufacturing could be another strategy that helps fashion companies survive in 2020 and beyond.

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