One of our Retail & Fashion and Private Client associates, May Delaney, attended the European Fashion and Luxury Law Conference in Milan from 20-21 June 2018.
Here’s her top three take-away points from the event:
The Rise and Fall and Rise of Brands
This year has already seen a rise in corporate activity, at both the high fashion end of the market and amongst high street retailers. In terms of luxury, as people become more familiar with major sources of instability, such as Brexit and other global political developments, they are realising that they cannot put investments on hold indefinitely. Stella McCartney has bought her business back from Kering, Missoni sold a nearly 50% stake in their business to a mid-market equity firm, and the rumour is that Acne is working with Goldman Sachs to find a buyer. Turning to the British high street, barely a week goes past without another major player announcing difficulties. This corporate activity across the fashion industry requires both tactful advice and well-structured solutions.
Corporate and Social Responsibility
Businesses are becoming increasingly aware of their corporate and social responsibility, particularly those in the fashion industry. One example of this is the growing backlash against fur with Gucci this year becoming perhaps the biggest name to announce that they would no longer be using real fur. This presents an opportunity for disruptors and start-ups who will be looking to capitalise on this trend and replace traditional producers. We anticipate that the fashion and retail markets are going to be flooded with these alternative and environmentally friendly businesses.
The supply chain too must now be more transparent than ever. A recent report by an international watchdog group is alleging that a number of high street retailers have largely ignored reports of violence and other serious abuses against workers at an Indian clothes factory. The reputational risk of not knowing how, who and where your products are being produced can be potentially very damaging for brands.
2018 is undoubtedly the year of the influencer. According to a survey of 600 fashion industry professionals in Europe and the US by the data analytics provider Launchmetrics, in 2017 78% of brands implemented influencer marketing campaigns. This is an increase of 13% from 2016. Launchmetrics also found that brands raised their budgets for influencer campaigns by 3-6% in 2017, with $2 billion being spent on influencer marketing overall and fashion and beauty accounting for at least 40%.
This new way of advertising has brought with it a necessary host of legal pitfalls. The British Advertising Standards Authority led a crackdown on influencer posts towards the end of last year with several brands and influencers being called out by the authorities. We expect to see a rising number of influencer contracts this year and, as a result, continuing attempts to regulate this area.
If you would like further advice on any of the above issues please contact a member of our Retail & Fashion team.