Optimising Wholesale for the Future

Over the last 40 years, Informa Markets Fashion’s advanced contemporary and contemporary womenswear, accessories and footwear event Coterie New York has established itself as a key player in the market’s growth, helping launch, relaunch and scale brands from Helmut Lang to Alice and Olivia.

Pre-pandemic, the rise of direct-to-consumer saw the prioritisation of wholesale wane, but now, retailers and brands alike are bolstering its comeback. Following the e-commerce boom during Covid-19, large luxury department stores in the US have seen an uptick in foot traffic and brick-and-mortar sales.

An evolving landscape, the wholesale industry is shaped by supply chain disruption, pioneering technologies and demands for improved sustainability. As a result, fashion brands and retailers must adapt at pace to meet shareholder and stakeholder expectations. For instance, in the BoF & McKinsey State of Fashion 2022 report, 43 percent of fashion executives said they plan to reduce product development lead times to avoid overstock — although on average, large publicly traded apparel retailers’ inventory levels were 27 percent higher in June 2021 than a year prior.

Wholesale is still a critical channel for branding strategies, increasing market awareness and diversifying revenue streams for emerging and established brands. This season, womenswear label Silk Laundry, denim brand HNST and activewear line Magnlens were among the showcasing exhibitors incorporating wholesale into their retail strategies

To discover how leaders are optimising their wholesale strategies for success, BoF hosted Reece Rackley, CEO of Silk Laundry, Kate Linstrom, design director of Magnlens, and Lander Desmedt, co-founder and CEO of HNST, on stage at Coterie New York’s September 2022 edition to hear how they are overcoming nuanced and complex challenges to drive growth.

Below, BoF shares key takeaways from the event.

Diversify operations to protect revenue stream

RR: We need to embrace flexibility. When our stores closed [due to Covid], wholesale really dropped off. It’s [about] not having a single focus but to disperse risk, looking at the opportunities they present — be aware of risk and make pragmatic decisions. Just be flexible — we have best laid plans but ultimately, you can’t foresee it all the time.

We started out as a small direct-to-consumer business online only but moved into wholesale […]. For us, it’s meeting new markets. We’ve been in Australia for the last seven years building a business and we’re starting to get more presence in America, we’re also in Canada a little bit. That’s what we’re excited about, to bring what we do to these other markets and see where that wholesale goes.

Guide wholesale strategy with D2C insights

KL: It’s great to see how things are selling in our store. One of the best pieces was a modular jumpsuit that […] we thought was maybe too avant-garde, but it ended up selling out, so that’s exciting as we can better sell them into our wholesale accounts because we can kind of tell them that we have proof that it’s doing well.

It’s about how our consumers react to specific messages and what translates back into sales.

Our consumers, online and in-store, ask a lot of questions. They really care where their products are coming from, they really care about sustainability, and that helps us on the design team know that we need to be able to produce for them and make it truly a great product that is sustainable and be able to answer those questions.

LD: We directly see what kind of colours work well, what kind of fit works well, but also, it’s about how [our consumers] react to specific messages and what translates back into sales, which is the most important. […] Sometimes, we reach out to our community and ask what [they think] is missing in action — what we should make to help convince you to wear circular denim.

We also try to leverage technology to see what kind of messages correspond best with the consumers. […] For example, explaining that the amount of water used for making a pair of jeans is the same as showering for 19 hours. We use that to explain to retailers in our onboarding on the topic.

Extend ethical, sustainable practices to wholesale

KL: The main thing that we do is produce less and be very tight with our orders, and we get to oversee the whole process from beginning to end [as a vertically integrated company].

I think that, both within our personal wardrobes we don’t need as much as we have […] and then also within the design process, again quality over quantity. Don’t make a tonne of samples — throw them against the wall and see what sticks. Be very mindful in what you make and then also in the production, be very mindful of how much you’re making.

As a community, [Coterie] is bringing us together to really try to find the best way to move forward in fashion.

RR: Very few things are truly sustainable. There’s always an impact — there’s energy use in whatever production you use, and solving every single piece of the puzzle is a huge, monumental task. So I think the important thing for us is that we are conscious of what we’re doing and we’re always looking for ways to do better across the business.

My wife Katie [Kolodinski], who is the designer [of Silk Laundry], is very passionate about animal welfare. She comes up with prints that represent endangered species, but it’s not something we broadcast to the world. We build it into who we are.

LD: I would always start from the design. If you design your products to be recycled, you will automatically see where your circular design programme benefits. Then, it is a step-by-step process to overcome any circular design mistakes.

One piece of advice in implementing more sustainable fabrics and more sustainable patterns — don’t start to combine natural substances like cotton and polyester as today, we can’t recycle them. In the future we will, and while it might [seem to] be a more sustainable product, in the end, we don’t have the tools or materials [to recycle it yet].

Optimise a wholesale strategy through co-opetition

KL: For this community, I think just sharing the information we find is what’s most important for all of us. I’m learning every day. Here, as a community, [Coterie] is bringing us together to really try to find the best way to move forward in fashion and do the least amount of harm on the environment. I look forward to working with other like-minded individuals.

LD: We force ourselves to be transparent on every step that you take in the process. […] We share everything that is good but also force ourselves to share where we fail, which we call our Hall of Fail — where we share our fuck ups, to be honest. Those have to be shared as well, so as a company, as you force yourself to be transparent and the things that you do, you will always keep that mission that was there from the very beginning — you keep that promise.

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