Sunday on Friday

Good Morning,

How can we profitably maximize top line sales in this environment? The uncertainty surrounding the ability for large brick and mortar stores to remain open nationally is growing. As the virus spreads in many areas of the country, doubt is once again being cast upon third and fourth quarter projections. So how can we mitigate this and position ourselves appropriately to better manage contingencies?

First, we need to understand the mindset of today’s consumer. If you know your customer, and it’s more critical that you do today than ever before, then it’s essential that you cater to them very personally. Personal attention and genuine concern is desperately needed. We’ve all be sequestered, and we’ve all had to learn and accept a new way of living. Physical interactive deprivation has changed everyone. This is not easily replaceable by digital contact, but it is our best alternative at the moment. Consumers are not interested in purchasing new apparel or accessories for the same reasons that they did pre-pandemic. In the past, we shopped for events, we shopped to impress, we shopped to make a statement in public, we shopped to enhance our self-image in the physical world. We shopped knowing that we will be seen. Though we might not admit it even to ourselves, we shopped knowing that in some way, shape or form, we will be judged by anyone who sees us. Getting dressed every morning was purposeful. If you had a meeting scheduled, a business lunch, a class, a social event, you thought about the impression you would make. This isn’t vanity in a bad sense. It’s human nature. And even if you are the strongest of personalities with a bullet proof ego, what you choose to wear expresses this about you. Who we appear to be in the world may differ from who we really are, but nonetheless, each of us has control over how we represent ourselves to others, and it dominates our choices. Even for those who deny caring and dress accordingly, that too is a choice and it is reflected in our appearance.

So, what in the world does this have to do with managing sales contingencies today? Everything! Individuals now are looking inward. We’re not dressing for events, for meetings, for travel. Many are dressing for comfort and many just to make themselves feel purposeful in a cloistered world. We are dressing to avoid depression and complacency. We are dressing to remind ourselves that we are alive. If a tree falls in the forest and no one is around to hear the crash, did it really make a sound? Yes, it did. Do we need others to see us in order to validate our existence? Clearly no. The new emphasis is now on how we appear to ourselves, and how what we choose to wear makes us feel each day. It isn’t any longer about how we are being viewed or judged, simply because we aren’t being viewed or judged like we were in the past. And therefore, every company and brand selling consumer products needs to fully respect this and design accordingly. This is a fundamental change in perspective, and one that requires true analysis. For those who are willing to spend the time on thinking through what this means for your brand, it will pay off significantly.

As everyone searches for channels of distribution today that will protect the brand and generate cash flow, the quest should be for as risk free an option as feasible and practical. It is more critical than ever to communicate with your customer as directly as possible. Small, personal venues feel safer to many now. The commercial rent landscape has shifted so dramatically that brick and mortar can once more be seen to be very viable going forward. The capex is of course still an issue, though landlords are proposing many options on all the expense fronts. Commercial rents are dropping precipitously, as companies shrink their work forces, work from home, and explore all the alternatives to traditional office space that they never contemplated before. We are seeing 10% – 15% drops in the PSF pricing in the NYC commercial rental market, and I expect this percentage to continue to grow over the next 6 months. Renegotiate your leases, both retail and office. If you had been contemplating opening a store pre-covid, rework your projections. The scenario is very different today, and it might actually be the best time to start planning this again. There are several options to doing this on your own. Risk free or reduced risk opportunities with a quantifiable downside are out there. One such is Leap, which I’ve mentioned before. http://leapinc.com Since then, several clients have contracted with them for both pop-ups and permanent store fronts. Their platform develops and operates the retail store for you. They make the opening of a store turnkey and thus less risky, and if this idea is on your table, I suggest you explore it with them.

We are all dealing with a new world, a new consumer, new platforms for sales, both wholesale and retail, as well as a totally altered and constantly changing panorama of the future. But basic business best practices regarding safeguarding your cash and cash flow, margin retention and margins in general, risk management, concentration in your wholesale distribution channels, as well as overhead and credit protection, still remain critical to your ability to move forward profitably, along with new models and needs foisted upon us by current circumstance. Diversification and nimbleness have proven to be categories, the lack of which the pandemic has brought front and center, particularly regarding your channels of distribution, your sourcing, product development costs and time, and your various product categories. The bottom line is, rethink all of the above, never forgetting that ultimately, the best product for the new consumer’s mentality will prevail.

Stay Safe. Stay Strong,

Gary

Good morning everyone,

I hope you are all well.

After almost 16 weeks of crisis, i must ask this question as we hopefully emerge from the lockdown – Will we be smart this time? Can we keep these past four past months, no matter how painful, in the forefront of our minds as we re-engage with the world? Too often crises force change upon us, but as soon as the light begins to shine again, we forget just how dark it was out there, and we revert back to our old and tired habits.

There is so much we learned, or should have learned, by now: The reenvisioning of the values we lived by, the hurts we ignored, the undercurrents that went unnoticed by so many, the joys of social contact and freedom, the stark realities of an unequal society, the fragility of our lives and livelihoods, the superfluity of much of what we thought we could never live without both personally and professionally. The list goes on and on. At least for me.

When it comes to business, all of the above apply as well. During this crisis I’ve had the opportunity to talk with so many in the industry deeply impacted by the shut downs. In fact there are few who weren’t. This crisis respected no boundaries, no social norms, no economic differences. There were no sacred cows. Everyone was hurt. And the hurt went deep. It wasn’t just economic. It was social as well. And it has changed us. Fear changes us.

What should we be better at? What should we not repeat? What do we really need to be happy and fearless again? What do we need to do to make this a truly respectful and fair society? To make this a country we want to live in and work in and raise our families in? It’s not enough to simply recognize the need for change.

Life should become simpler after something as devastating as this has been. Priorities change and less becomes more. And though it’s not over yet, we’ve begun the process of finding our way in the new reality. Coming out of this crisis, I know that I need less to survive. We’ve all learned that, I believe. Equality, family, a semblance of financial security, freedom of movement, the ability to socialize, the ability to feel that tomorrow will be better than today – these are the things I cherish most. I am surely not the only one who feels this way. How much have we truly learned as an industry? As a society? As a world? I’ve lived through many periods of change and upheaval, but this one feels different to me. It is global as well as very very personal for all of us.

For our industry, the lessons have been sharp. We need less merchandise. We need stronger margins. We need fewer promotions that undermine profitability for everyone. We need fewer employees and fewer accoutrements that we always felt were the signs of success. We need a delivery calendar that is based upon the consumer’s shopping needs and patterns. We need to respect the bottom lines of our businesses’. Most of all, we need dialogue and collaboration between all the various spokes in the wheel of fashion, that allow it to turn. And respect.

I’ve benefitted tremendously from speaking with all of you each week, as well as all the off-line conversations I’ve been having for the past months. Just by putting my feelings into coherent words and messages to you has allowed me to think them through and weigh them on the scales of my life. I’m sure it has been the same for many of you – the re-thinking of your businesses and of your lives. I’ve benefited from the dialogue I initiated with the CEOs of our major high-end departments and specialty stores. I hope it continues. I’ve benefited from being a part of ‘Re-wiring Fashion’ and rethinking the official calendars. I’ve grown by virtue of this crisis and I’m grateful for that at least. I’ve benefited immensely from seeing the varied reactions of my peers to this horrible disease and the tidal wave of change it brought on. But in the end, how we all absorb and act upon the lessons we’ve learned is what really matters going forward, isn’t it? It’s not what we say or hope for or want that counts. It’s what we DO in life that matters.

To a certain extent, there’s truth to the old adage that adversity teaches you who your friends really are. Adversity also brings out character. And I’ve learned that as well, first hand, We’re all strugglers and survivors as well as visionaries. Some rise up to that reality and some do not. There is nothing more important than knowing who your friends really are. And the final question that will remain on my lips when this is all over, the question I will not stop asking myself henceforth, both of my personal and professional relationships, is ‘Can I count on you?’.

Have a great day.

Stay safe. Stay strong.

Gary

It’s not Sunday, I know. I just thought everyone might want a break from my emails for a bit. But there is still something I’d like to express that probably shouldn’t wait. So….

Businesses are in flux. Like never before, retail is being challenged. No footprint or concept has been spared. As stores reopen in the year of a pandemic, every one has to clear a path for the consumer, and trust me, no one has perfected the formula yet. Uncertainty will plague us for quite some time, but life goes on and imagination and creativity will ultimately prevail.

As we navigate our way through these troubled waters, please remember to be open minded. Assessing the credit worthiness of any retailer today is a very difficult job. Balance sheets have been decimated, P&Ls are smeared with red ink. Though none of these numbers are surprising anyone in the credit markets, they are very hard to analyze without knowing if and when the world will resume turning in an uninterrupted fashion again. The retailers we’ve always counted on, the ‘majors’, are consumed with problems. Understandably so, like the magazine world and the record industry, they were weakened prior to this crisis, so digging their way back to the surface, to a break even, is even more difficult now. We will get there. I’m not in doubt of that. But the road will be rocky and rough. And we at Hilldun are tasked with the job of providing credit approvals to you in the most uncertain and hard to read environment I’ve ever experienced.

As I said, we will get there. But at this very moment, each approval we issue is riddled with risk and harder to provide. Many stores chose to hoard their cash and not pay any invoices since the lockdowns began. Hence they are considerably past due and still short on cash. PPP and other government assistance helped keep employees paid, despite the lack of work for them, in many cases. But that has run its course. Now old bills need to be paid, plans need to be put into place to guaranty the flow of new, incoming merchandise, and money needs to be spent on reimagining the retail floor space. Without credit, business grinds to a halt. Everyone needs time to generate cash in order to keep their payables current. And until now, there was barely any opportunity to do that. Retailers are strapped, in many cases with a legacy of bloated overheads, too many stores, too much merchandise and no sense of how quickly the consumer will return to their locations in any significant numbers. It’s a crap shoot with no precedent and no definitive end to the crisis.

Essentially, what I’m saying today is that we, like you, are looking for answers and information, but I don’t anticipate finding any easy ones. We will approve as many orders for you as we possibly can. We are never trying to hamper your ability to ship against your orders. The opposite is the reality. And we are working tirelessly to assess risk, speaking daily to retail executives, CFOs and controllers in an effort to find the comfort level we need to guaranty their payments. I’m not complaining. This is our business and our job, just as you have yours. I’m explaining. Our credit department and our collection department, as well as our back-office, pre-payment collectors are doing everything possible to make it easier for you, and still they cannot always satisfy your immediate needs. I apologize for holding orders past start ship dates. I apologize for declining orders from stores that we formerly approved without thought. Old invoices need to be paid though if we’re going to approve new deliveries. Not all at once. Not in one lump sum. We’re working with all the stores with regard to payment plans, big and small. Fortunately, the specialty store industry has really been fantastic during this disaster. Literally, thousands and thousands of checks have continuously been mailed to us on your behalf and many retained their former credit lines. Many of those who withheld payments all this time are now beginning them again. But, they will have to catch up and rebuild their credibility before we can approve orders from them in any significant dollar amounts. Nonetheless, light is evident at the end of the tunnel. Each day another store we’ve been pursuing (as gently as possible) for payment is sending checks to us, who hadn’t paid since March.

It will take some time to recover, and we’re pushing as hard as we can to assist the market. Please understand that every approval you want, we want to provide. But it’s harder now, and it takes longer to process the orders. So when you get frustrated, please believe us when we tell you we’re doing everything we can. We don’t want to cause you any more pain or delays than you’ve already had. We will do everything we can to provide you with what you need, though I cannot state with a good conscience that you’ll get everything on your wish list. Please just be understanding and believe that time, understanding, patience and collaboration will cure much of this.

On a different note, times like these make people thing long and hard on their previous actions and policies. Many retailers are looking to find new ways of doing business with all of you. We are having an ongoing, brainstorming conversation with Pete Nordstrom regarding how to increase sales incrementally for the brands they carry, without relying upon returns and swaps. Rather we’re searching for ideas that allow transparency into the final amounts to be paid at the end of the season, so that no one needs to be hit with demands for margin help, returns etc at the back end of the season. We want purchase orders to be purchase orders, not veiled consignment sales. Nordstrom is a great retail opportunity today. The company’s credit is strong and its network of stores is larger than Saks, Neimans and Bloomingdales’. Nordstrom, out of these four retailers, has also never ceased to make regular payments during the entire three months of crisis. Hence, Pete Nordstrom and I are working hard to develop new terms and new ways of attaining profitable growth for you and for them. I will keep you posted on all developments.

While we work on new ideas, another immediate opportunity has arisen. Nordstrom is looking to buy summer merchandise that can be delivered immediately. It must be fresh and new, appropriate for the environment we’re currently in, buy now/wear now, and priced appropriately for whatever category it falls into. Those of you who have considerable inventory from summer that fits the qualifications, please let me know asap. Our relationship with the Nordstrom family allows us to share prospects with you that others are not privy to. Let’s make the most of this opportunity.

Stay safe. Stay healthy.

Gary

Good Morning Everyone. I hope you are all well.

Black Lives Matter. This isn’t a slogan. It isn’t another platitude. It’s a deep and meaningful expression derived from centuries of oppression and unfair treatment. It’s a cry for justice and perspectival change. It’s a plea for humanity. It’s also an opportunity for deep self-examination. The roots of injustice lie within us individually, whether or not we have been taught to fear and hate from childhood, or we’ve been swayed by weak examples and false prejudices coming from the company we’ve historically kept and perhaps currently keep. But the fact remains that we are all human, and we all deserve equal opportunity and fair treatment. The long chain of abuse has not been broken. And the disadvantages this abuse and bigotry has perpetuated over 400 years in this country, have handicapped an entire race in all categories and in each and every aspect of economic, educational, social and political opportunity. This is wrong. It’s unfair. It’s cruel. And it must end. No one deserves to die because they are of a different race, religion or color. No one deserves to have to work twice as hard to reach the same place that basic human rights and even playing fields bring to someone else. Look deep inside of yourself. What do you fear, black, brown, white or yellow? Nothing could contribute more to the failure of a society than hate and prejudice. So if you fear diversity because you think it threatens your lifestyle, well-being and your future, think again. You are so fundamentally wrong. Hate and prejudice themselves cause the pain and threat, not the false causes we attribute to them. They alone represent the greatest threats to the foundations of our society than anything else. They are self-perpetuating, and unless we are willing to put an end to the individual and personal, internal dialogue of bigotry, fear and hate, our society will come apart at the seams. Cleanse your hearts of this deep seeded and learned bias and intolerance, and you’ll save the world for everyone. It starts and ends with you. Black Lives Matter.

The country and the world are reopening, and it remains to be seen just how successfully this evolves. We’ve learned so much over the past few months, all in regard to unchartered territory. As we endeavor to find a pathway to ‘normal’, we must implement so many of the ideas we’ve contemplated during the lockdowns. But as I stated to you all a few weeks ago, there are silk linings inside this thorny and tattered coat. I’m working with the group, Rewiring Fashion https://www.rewiringfashion.org/, as part of my personal initiatives to do what I can to change things for the better, and create a clear and fair pathway to profitably for an industry. Please go to the website and look at the platform. It’s a work in progress. We meet weekly and work hard to find answers to the dilemmas that have been plaguing both wholesaler and retailers. And I believe we’re making unique progress. I’m also continuing my meetings with the retail CEOs in order to mitigate what many see as opposing positions. This Thursday I am conducting our second video dialogue to present this calendar, as well as to delve deeper into the serious cost to us all of the promotional disarray and inevitable discounting in the industry. I will, of course, keep you all posted, and I encourage your comments and thoughts.

I’m not going to take more of your time this beautiful Sunday morning in NY, so please just review the proposed NEW attached calendar that Rewiring Fashion is developing. All comments are welcome.

Stay Safe. Stay Healthy. Stay Smart.

Gary

n lieu of all that’s going on in our world and in our country, I decided to post a poem I wrote for one of my books. Sorry for imposing by emailing this rather than something more businesslike, but it seemed appropriate today. Ordinary words couldn’t properly express my emotions.

Caught between the thoughts that give
and those that take away…
A longing to go forward,
the reasons yet to stay.
Perched upon the steepest edge,
with choices still to make,
A step onto the fragile ledge….
All others to forsake.
A move that takes you to a place
from which you can’t go back.
Is it need that drives you forward so,
Or is need exactly what you lack?
What motive lures your spirit on,
Who beckons you to dance?
Is it fortune that brings you to this choice
Or is it merely chance?
Is it destiny?
Is it pride?
Or is it simply fear?
Is it virtue?
Is it envy?
Or is it fate that brings you here?

Does a pure heart know the difference
Between the image and the dust?
Is the light so bright you cannot tell
what can be from what must?
To go, to stay…
Will you find your way
‘Tween credence and mistrust?
‘Tween a love that’s true and lust?
‘Tween the righteous and unjust?

Do you see the contrast yet
between what you give and what you get?
A bleeding heart is all that’s left
when reason turns to rage.
Within the mists can you discern
the path of peace for which you yearn,
a language they have yet to learn,
The devil from the sage?
The paper from the page?
The actor from the mage?
The payment from the wage?
The prison from the cage?
The moment from the age?

What is weak and what is strong?
Are you right or are you wrong?
Could you be the Dark One’s pawn,
Content to merely go along
And trudge on blindly with the throng,
Do anything to just belong,
And pray this darkness yields to dawn,
Before the founts of strength are gone?

Or will you race against the storm?
Struggle for the yet unborn?
Heal the wound, extract the thorn,
Subdue your fear of evil’s scorn,
Look with hope upon the morn,
Boldly blow trust’s fearless horn,
Fulfill the noble pledge you’ve sworn,
Be all you can; be bold, be strong,
Be the herald of tomorrow’s song?

Stay safe. Stay healthy.

Gary

Good Morning and Happy Memorial Day

In the worst of situations, if we dig deep enough, we can almost always find a silver lining. Let’s just call it a silk lining for our purposes now. And the silk lining that I am talking about is the rethinking of the entire fashion and consumer goods cycle. It has become so obvious during this pandemic that the way the consumer goods, (particularly fashion) industries have operated, those classifications that sell their products to major retailers, whether brick and mortar or DTC, hurts every link in the supply chain.

Yesterday I participated in a zoom meeting with a group of exceptional and creative, independent retailers, brand owners and managers, and CEOs on the subject of re-wiring fashion, originally facilitated by the Business of Fashion. The focus of the group to date was on resetting the fashion calendar, reimagining fashion weeks and breaking the syndrome of promotions, markdowns and chargebacks. During our two- hour discussion Friday, we concentrated on how to force change in the industry, and we reached consensus on multiple, vital areas.

I have been fighting the fight for years now, since we at Hilldun have such a clear window into just how devastating to independent brands and small retailers the current pattern has been. We hear the stories and we have seen the damaging results over many years. The big fashion-brand conglomerates set their own rules. They can. They are omnichannel, in many cases vertical as well, and they have achieved a level of power and influence that permits them to dictate their own terms regarding discounting, seasonality and how their brands are merchandised. Independents cannot do this. They have little leverage. Often the choice they face comes down to whether to sell to a particular retailer or not. Negotiation is always a gamble. Fighting back against unreasonable terms often leads to cancellations of potential orders. The risks ostensibly outweighed the benefits up until now. But, this pandemic has changed everything. Major retailers are frightened. Their futures are uncertain. Large venues are no longer the keys to greater top line sales. Versatility, creativity and personal attention are all more viable in the smaller footprints of specialty stores and brand-owned settings. Current circumstances make it clear that now is the most opportune time to change the dynamic and re-wire the system. There is power in numbers. A unified voice will be heard. There is no reason why independent brands cannot band together and speak to retail in the same ways that LVMH does. Retail is vulnerable now. Everything is vulnerable now. Hence, there is opportunity like never before to find a more collaborative answer to margin deterioration for the sake and benefit to all. But for this to happen, each of you needs to get on board. The leverage that fashion conglomerates have is based upon the need on retail’s part to carry their brands. It is quite clear that without that clout and implicit threat that they will not sell to certain retailers if their conditions are not accepted by them, terms are dictated, not negotiated. Once more, the small player is the victim. Hence, independent brands should endorse and support a new and fair balance of power as a group. This is the only way the playing field will ever become level.

The changes needed require a multi-pronged approach. As I discussed with you last Sunday, legislative action is a necessity if any semblance of order is going to be established regarding promotions, sales and markdowns. Spain, Italy and France all have designated weeks when sales are permitted. Authorities determine when promotions begin and end. In Spain, the law states that twice a year sales can take place, and they must last at least one week and no longer than two months. In Italy, once sales begin, they can go on for no longer than 60 days. In France, sales can go on for no longer than six weeks, and any sale products must have already been available to consumers for at least one month at full price. In Germany, winter sales and summer sales begin on the last Mondays in January and July. They continue for two weeks. Though in Germany this is no longer governed by law, they maintain the structure. And it works! Why can’t we do something similar here?

In addition, and just as important, is the need for independent retailers to get behind the effort to enable major changes. Specialty stores and independent retailers who can clearly serve the needs of their patrons better now than ever before should recognize this unique opportunity now. They too suffer extensively from the promotional cycle dictated almost randomly by the major retailers. There is power in numbers. There is no reason why independent retailers cannot band together and speak to the majors and to government on their own behalf. Retail is vulnerable now. Everything is vulnerable now. Hence, there is an opening like never before to find a more collaborative answer to margin deterioration. They need to express their concerns and regain some control over the market. Margins are very slim for many privately owned and operated retailers to begin with. They are casualties of both sides of the supply chain. The fashion conglomerates demand extensive buys and often relentless and unreasonable terms of their own, further diluting a small store’s margins. Independent retailers also have no jurisdiction over their own pricing. When the majors discount, they have no recourse but to follow their leads or lose their consumers. This must change. If our legislature claims that the changes we are discussing constitutes price fixing, how do they then allow the imposition of specific pricing terms on the industy by the European fashion conglomerates?

The situation is clear, as are the remedies. We at Hilldun can speak to both sides of the equation. I have joined the group hosted by BOF and I will do whatever I can to make this industry better, stronger and more profitable. There is no enemy here. Everyone is suffering and It is thus in everyone’s best interests for the major retailers to thrive, just as it is in their interests for the independent brands and specialty stores to flourish. Homogeneity from retailer to retailer will only seal their fates and further dilute prices and margins. Consequently, we all must work in partnership to establish new guidelines that will serve everyone’s needs. I will be reaching out to our vast database of retailers for support as well. Without an organized response to this broken system, nothing will ever get repaired. Our industry needs to collaborate and get behind the re-wiring of fashion. The bottom line is that ALL of retail will benefit in the end from the fairer treatment of every party, realistic delivery schedules, systematized markdowns and a level playing field. All of you will also be able to recapture lost margins, take comfort in the elimination of price wars, and sell on reasonable and equitable terms. And finally, if legislative action is every going to happen, the consumer in the end must be served. Structuring the confusion and chaos of pricing, making it more predictable by creating order out of the current anarchy, will surely serve the top of the food chain, the consumer better.

Stay Safe. Stay Strong.

Happy Sunday. I hope everyone is healthy and staying safe.

Have you prepared your business for a return to work? If not, it is time to do that. It’s so important for all of us to ease our way back to a working life. Nothing will be normal, but with time, we will adjust. Be resilient and be empathetic at the same time. Remember that each employee of yours will have different fears and expectations. Be cognizant of them. What may seem irrational to one person may be critical to another. Respect everyone’s concerns and do your best to compensate for them. These are extraordinary times, and it will take extraordinary people to manage them. Time to step up!

Below is a guideline that Governor Cuomo distributed. It’s clear, succinct and simple to implement.

Business Precautions: Each business and industry must have a plan to protect employees and consumers, make the physical work space safer and implement processes that lower risk of infection in the business.

1. Adjust workplace hours and shift design as necessary to reduce density in the workplace

2. Enact social distancing protocols

3. Restrict non-essential travel for employees

4. Require all employees and customers to wear masks if in frequent contact with others

5. Implement strict cleaning and sanitation standards

6. Enact a continuous health screening process for individuals to enter the workplace

7. Develop liability processes

**************************************************

On a completely different issue, we at Hilldun have been pursuing the issue of how retailers and brands can engage in discussions surrounding the precarious promotional environment that has been propagated over the last ten or more years. What was intended to spur on sales has morphed into a syndrome that undermines full price value and leads to margin losses for everyone. But even initiating a discussion requires legislative action.

If the industry wants coordinate on matters like discounts and pricing, it must find a legislative solution to overcome American antitrust laws. We are in discussions with some of the best lawyers in this industry. What we’ve garnered from our preliminary meetings is that there is an opportunity in the ‘Phase Four’ stimulus process now before Congress, to help retailers and vendors reestablish some order now and going forward, and prevent a ‘pricing bloodbath’ when the stores reopen for business.

Typically, the legislative process is slow and unpredictable. But a Phase Four stimulus law will likely come soon (around July 4) and, in this instance, we have a sense for what the key policymakers want. House Democrats want to appropriate money directly to states, municipalities and individuals to fund mitigation; Senate Republicans — perhaps also willing to spend significant sums to restart the economy — want no-cost solutions like liability shields to protect companies that reopen from potential lawsuits by employees and customers who might get sick in their stores.

It seems to me that our best chance for success is to offer a similar ‘no cost’ solution to Congress that can be included in the Phase Four bill as an economic recovery measure. We should develop and propose legislation to provide antitrust relief (perhaps temporarily) so that (certain) retailers can coordinate receiving merchandise and planning things like promotions and markdowns. Part of our message would be that without Congress’s help, counterproductive price wars will harm brands and stores in the short term and ultimately hurt consumers in the long run.

This is a novel idea and should be introduced to policymakers as soon as possible. Since the pandemic has inadvertently altered the shipping and selling seasons for apparel and consumer goods, and an entirely new perspective on seasonality is evolving, now is the time for even greater changes. The Senate Judiciary Committee is the place to start, and particularly the Subcommittee on Antitrust, Competition Policy and Consumer Rights, chaired by Sen. Mike Lee, an alum of the law firm we’re using for this.

This initiative will unfortunately necessitate a considerable amount of legal expenditures in order to see it to the end. I intend to address this with the retailer group I convened last week, in the hopes of getting their conceptual support for this, as well as their financial support. I am also hoping that some of the larger apparel companies in the industry will see the value in such an undertaking and choose to participate as well. If any of you reading this have contacts or relationships with firms you believe would both benefit and be willing to endorse and contribute to such an effort, please let me know. Ultimately, everyone will profit if a promotional structure can be put into place to guide the industry. Big changes take courage. I sincerely hope that all the stake holders in the fashion/beauty industry recognize the potential near and long term benefits of this effort, and get on board.

Necessity is truly the mother of invention.

Stay Safe. Be Strong.

Gary

First, Happy Mother’s Day!! It’s a shame that all mothers and children cannot spend it together this year, but what is in your hearts matters more in the end anyway.

In my continuing crusade to establish a more cooperative, productive, fair and profitable relationship amongst brands and their retail partners, last week I organized and moderated what I believe was an unprecedented video discussion. The CEOs, CMOs, Presidents and buyers of all the major retailers in the better contemporary, designer and luxury space participated. The purpose of this was to garner from them what they are anticipating the future will look like, and what they will be looking for in terms of delivery dates, product and quantities. I wanted to begin a dialogue that should and must continue. Guidance for everyone now is critical. The goals are many and leadership is essential. It’s imperative that brands and retailers recoup the losses that have been and still are accumulating in the fashion/consumer goods industries, establish a more realistic calendar, alleviate the dilution that being over-inventoried helps to create, and to ultimately devise a better and smarter partnership and path forward in order to achieve these objectives.

Everyone whom I invited attended and participated. On the leadership side, attendees were Marc Metric, Pete Nordstrom, Geoffroy Van Raemdonck, Darcy Penick, Elyse Walker, Jyothi Rao and Tony Spring. From Hilldun, I along with Cris Wassner, Josh Kapelman, Tim Moore and Grace Ree were on the call. All the participants willingly engaged in this discussion. As I said, I hope to continue this dialogue that we began on Tuesday, and with a bit of luck and hard work, create a more engaging and collaborative environment between buyers and sellers, going forward.

The global pandemic has broken the cycle of showing, buying and selling that has prevailed for so many years. There WILL be positive outcomes due to these awful circumstances. The areas that everyone agreed upon are those that will reshape the industry.

Knowing full well that clear and precise answers are not possible yet as we work our way through the crisis, much of what I’ve been relating to you over the past weeks is aligned with the retailer’s thoughts and intentions. Everyone wants to extend the shelf life of the merchandise they buy, but currently consumer demand does not match the receipt of goods. Fall receipts of goods should reflow in order to achieve the proper cadences. The seasonal terminology as we now know it has changed and in many respects is meaningless to the consumer. The timing and content of the deliveries is more critical. Seasonless was a word frequently used during this dialogue. Buy now, wear now was the focal point of everyone’s go forward plan. In the past, up to 80% of fall deliveries were completed by the end of July. They would like to see these percentages shift from 80%/20% to around 50%/50%. Deliveries of merchandise for high summer are an invitation for markdowns. The selling period is too short to achieve profits. This year and going forward, few felt that assets should be devoted to holiday/resort product. Few consumers are thinking about spring weight apparel at that selling time. Rather the retailers would like to see capsules created for November and December sales, and allow fall product to sequence on the shelves longer. All hoped that the industry can ultimately align around appropriate delivery dates.

Newness and diversity! Each and every retailer emphasized how important freshness, personality and individuality are to them. They also reasserted how vital entrepreneurial, independent brands are to them. Without all of you, the consumer might as well shop online based strictly on price. Emotionally engaging product that is refreshing and novel, as well as tried and true core product that trademarks your particular brand and guarantees healthy sell-throughs, are the desires. There is too much merchandise being ordered and delivered, and compounding this, it is being delivered at the wrong times for the consumer’s wants and needs. Design less and smarter. Deliver in smaller, stretched out waves.

Some suggested that, in order to deal with all the cancellations of spring goods, and the lack of a spring/summer selling period this year, that brands reassort their inventory and offer it, as appropriate, to the buyers for January/February deliveries. There is and will be so much inventory in the system that will need to be liquidated between now and when Fall products begin to be delivered, that it might be smarter to hold on to it, rather than dispose of it now. Talk to your buyers about this. One retailer did say, though, that you should fight back harder against outright cancellations of orders. Propose options. If the consumer hasn’t yet seen the product, then for the consumer, it’s new regardless of what seasonal label is put on it by the trade, or when it was originally manufactured. Normally I suggest that fashion inventory be liquidated as soon as possible, since the value drops so dramatically once the season it was designed for ends. But these times are unique. The consumers have not seen summer product yet. For them, it could easily be early spring if you assort it properly. I am not suggesting that you hold onto summer goods without orders for Jan/Feb delivery from your retailers. Just explore the opportunity.

Finally, we discussed sourcing. Part of the challenge for everyone is the lead time it takes to produce merchandise after the orders are placed. I would encourage everyone to work as hard as possible at pushing your suppliers to shorten the span. The retailers said that it has become harder and harder to predict the consumer’s interests, and if brands are able to accept orders closer to the delivery dates, then those brands have an opportunity to do more business going forward. If you can produce capsules or larger runs in eight to twelve weeks, then you should let your buyers know now. You will have a significant advantage over your peers in the industry. This coincides with retail’s need for newness on the racks, and it removes risk for the retailers and for you. If they can predict trend more accurately, and gauge need by demonstrated demand, then full price sales will be enhanced, and both you and your retail partners will achieve much better margins in the end. Your COGs may go up, but your dilution will inevitably go down. Weigh one against the other. These comments by the retailers also echo some of my prior Sunday remarks about taking more control over your sourcing when possible, and communicating with your distribution channels regarding what your capabilities are. Most of the retailers have no idea. You definitely want to enhance your future prospects however you can, now more than ever. Shorter lead times also translate to better cash flow for you. The time between fabric buys and manufacturer deposits, and when you deliver to the stores would be shorter. Each and every lever you can pull will help in your recovery.

We were not able to discuss markdowns, pricing and promotional cadences. Such a discussion would have violated anti-trade laws and could be considered price fixing. Everyone was cognizant of this issue before the call, and we intentionally avoided the subject completely. We at Hilldun are working now with counsel to petition the Justice Department to allow us to have these discussions going forward. Until that time, unfortunately, this subject is off limits. What we did achieve was an open, honest dialogue, as well as consensus on some other vital issues. As this dialogue evolves, we will work hard to provide ongoing guidance. This meeting was meant to establish a forum within which critical problems and concerns can be aired, and in that sense alone, the summit was a success. Though no earth-shattering conclusions were reached, the spirit of cooperation was evident. Retail can only survive if you are strong and creative. You are the food the feeds them all, and they recognize this despite the gut wrenching decisions everyone has been compelled to make these days.

I hope this is helpful. It’s a new world, and everything now is a work in progress.

Be safe. Stay strong. Stay healthy.

Gary

I’m sure you all sense that things are beginning to move in a more positive direction. There is no denying that we all have been changed by this crisis. Hopefully, we will be able to cull from the dire circumstances we have all been enduring, the positive elements. There are positive elements to come from this! Hopefully, we will all be guided by what we have learned and experience and make the requisite changes to our businesses and lives accordingly. Times like these force us to acutely reevaluate our personal and professional needs. Change is the inevitable outcome, but it’s incumbent upon us to be the effectors of that change, and not its victims.

What we have not yet determined regarding any of the consumer goods industries, particularly those dominated by seasonality, is what the stores are going to want, when they are going to want it, and most important, how the consumer will behave once the doors begin opening again. We are fortunate that retail will roll out selectively as opposed to everywhere, all at the same time. It will give retailers the opportunity to learn, on a smaller scale, what they will need to do operationally once they are fully functioning, to make the consumer comfortable again in their venues. And this rollout is beginning right now.

What results do we really want to achieve? Certainly, everyone wants to see their cash flow resume, their payables negotiated so that they will be manageable going forward, to begin the re-hiring of essential employees, for design, production and delivery to resume and so much more. But what we are lacking in the apparel, home and beauty industries is guidance from the major retailers. No one knows for certain what the future will bring, but what we do know is that logistical plans regarding hours, hygenics, and personnel are being put into place at every large and small business for their re-openings. But the planning regarding the issues which directly impact the vendors haven’t been shared in a meaningful way. The food chain of consumer goods begins and ends with the consumer, of course. But the next link in the chain is the distribution channel. Many aspects of this link are in your full or partial control – DTC sales and marketing, your own brick and mortar should you have it, and marketplace websites like TMall, Amazon and Alibaba. But by far the largest channel of distribution is still the wholesale channel. Everyone needs guidance from this critical network.

The big questions that need to be answered before you can resume a semblance of normalcy are manifold and crucial to everyone’s future. Will our retailers finally provide product to the consumer when the consumer actually wants it and needs it? If they do then hopefully the markdown syndrome will be mitigated to a large extent, and retailers and vendors can earn a reasonable margin together. What will the new relationship be between the vendor and the retailer? The brands cannot continue to bear the weight of meeting margin agreements and arbitrary markdowns of their products, as well as the demands for returns, swaps and discounts on orders that were generated by the retailers for product chosen by their representatives. Much of this problem can be solved by a more appropriate calendar of deliveries and a better assortment of product. There also needs to be a desire on the part of retailers to see merchandise live longer at full price. This requires a concerted effort to reeducate the consumer, but it also means that vendors must provide less product and more desirable product, and it means that retailers must respect full price sales longer. It seems almost as if retailers have been throwing more and more product against their walls in order to see what sticks, instead of choosing more carefully at the onset, working with the vendors more closely, and providing the consumer with what it will ultimately purchase and feel emotionally aligned with. The syndrome of buying and then charging back the vendor for whatever does not sell through has virtually turned net terms into consignment sales, and this isn’t sustainable for the vendors.

What should vendors expect regarding budgets and numbers of deliveries per year? How do vendors plan design and production without guidance? Will seasonality as we have known it change? If fall is delivering much later than in the past, will there be a need for resort collections? What expectations will retailers have regarding replenishment during the months of November, December and January? What product are they planning on selling?

There are so many questions that absolutely need to be answered. And our major retailers who still make up the bulk of most apparel sales must establish new guidelines. If they don’t provide leadership then the industry will take much longer to recover, and profits will elude everyone. Retail cannot succeed without you! Homogeneity among all the majors won’t sell product. It marginalizes it instead, and it simply becomes a question of price for the consumer. Large brands cannot pivot as easily and quickly as smaller brands can. The retailers recognize this, and they recognize the essential value of diversity and specialness. You are all positioned to seriously take advantage of your maneuverability and design talent, to provide unique and not overly distributed product to a starved consumer who will need emotional gratification and who will crave the ability to make personal choices once again.

I intend to press our major retailers for answers to the questions I and many others have raised. I’m in constant contact with those that many of you do the bulk of your business with – Saks, Nordstrom, Neiman Marcus, Bergdorf Goodman, Intermix, Bloomingdales etc. – and I will continue to speak with each in an effort to obtain the guidance that the industry so desperately needs. I will of course share any relevant the information I’m able to obtain, with all of you. What we do as an industry now will impact everyone’s revival going forward. We must get it right.

Stay Safe. Stay Healthy. Stay Hopeful.

Gary

Hi all! I hope you are doing better today than yesterday. Day by day by day…

I’ve sent out quite a few emails to you on many and varied subjects, and I’ve participated in interviews and Webinars, all with the intent of finding some things that are realistic, constructive and positive during these tough times. I’ll continue to do this until our world stabilizes. It’s a time for thoughts and reassessment. Thoughts about who we are, what matters most to us, what frightens us and what gives us comfort. Reassessment around the way we have lived our professional lives prior to this devastating virus. What do we need the most now? What have we missed the most during this crisis? What can we live with and what can we live without? What really matters?

Daily, I reevaluate my life now. I mean this. When I wake up in the morning, I take serious note of the thoughts that I begin my day with, and I try very hard to redirect those thoughts if they’re not productive, if they’re not proactive, if they’re not lifting me up, but instead, they’re dragging me down. I focus on what I can do, not what I wish would be done. Control gives us power as individuals, but we see so pointedly that we cannot control everything. Learning to say NO to negativity gives us extraordinary power as well. No, I’m not in denial. I’m acutely aware of how tough these times are. Stress and anxiety are part and parcel of our world at this time. Our minds can be our greatest enemies, but they are also our salvation. We are survivors. Humans are survivors. And we will all survive this, but we need and must direct our thoughts positively. What can I do today to plan for tomorrow?

Over these past weeks I’ve made many suggestions regarding business policies in our respective industries, tactics, opportunities and ideas. Now let’s be practical. Are you ready to reopen? Have you planned what you’ll need to do to create a safe and comfortable environment in your office? How are you going to regulate social distancing? Will you require everyone to wear masks? What about lunch hours and common spaces? What working hours will you implement? Do you have a cleaning service that can disinfect your premises at least once a day? How will you monitor deliveries? When the mail is delivered, who will open it? Who will touch all the paperwork that comes in? How will you present your product to the market going forward? What products will you develop? How do you protect and maintain your fulfillment and logistics? Is your supply chain secure, or at least, secure enough that you can start up again as soon as circumstances permit? What will your messaging be when you re-open? Which relationships have been meaningful and add value to your business and your life, and which have been absent and insignificant during this crisis? There are so many questions that need to be answered now, while we have time, while we’re still in lockdown.

During the years since Sandy, we at Hilldun focused on building a fully functional disaster recovery plan. And fortunately, we implemented it just in time thanks to our brilliant IT department. We’re all working remotely on our cloud-based systems which every employee can access as if they were at their desk. It has been a life saver for us. We’ve been able to process everything we need to without interruption. All our departments are fully functional, with the exception of our physical mail room, and thus, we’ve been reaching out to each of you during this calamity to gather every email address for your customers that we might have been missing. We receive thousands of paper checks from retailers globally, and we’ve been able to process each and every one daily, including all the scans you need to reconcile your internal books with. We have a phone system that functions remotely as if we were in the office, so everyone can communicate using their usual phone extensions. We’re not perfect, and during this remote awakening, we have learned what areas we need to perfect and develop for the future. All positive things that have come out of a great tragedy.

Do you have such a plan? Were you prepared to be out of your office for an indefinite period of time? Regardless of what functions you perform in the office that you assume you can only do there, you need an alternative way of managing these unforeseen interruptions. Now’s the time to brainstorm with your partners and your staff and formulate one. Now’s the time to think positively about your future, knowing what a catastrophe actually feels like, and how it affects every aspect of your professional and personal life.

If you spend your time and energy actively planning for the future, you’ll be less afraid of it. The unknown is always more frightening that what is known. And certainly, you’ll be ready to start up again quickly, which we’ll all need to do. This should not be wasted time. Use these moments and days to make yourself stronger and safer going forward. Please remember that everyone is drifting on this very same boat now. You’re not alone. All of humanity is in this together. What may seem like insurmountable obstacles ahead, are all lessons. Don’t make the mistake of not listening and learning. The financial impact of this unimagined closure is pervasive, but we will figure out how to manage the damage together, just as we’re learning how to mitigate a pandemic together. Be positive. Plan. Be ready to go back to doing what you love. Fear can never rule the heart.

Be safe.

Gary

We are not there yet, but we will be eventually. Will you be ready? I ask myself this all the time. At first I assumed that when this crisis is over, things will go back to the way they were. At some point in time, I still believe that will be the case. But now I’m more inclined to adjust my thinking to living in a changed world. Will I want to travel by air? Will I be comfortable in a packed movie theater or concert venue? Will I want to wander around the shops at Hudson Yards? Is the thought of going into Macys Herald Square a panic attack inducing one? What about restaurants? Sports events? My dentist’s office? I don’t have answers to these questions, even for myself. But I do know that they will be on my mind for a long time to come.

What will this new mindset mean to the apparel industry and consumer goods in general? We’ve all already discovered the convenience of Amazon and buying commodities online. It’s easy. And we all recognize the reach that Net a Porter, Matches, ShopBop and Revolve have. Department stores have been struggling with this reality for years now. Convenience means a lot to so many. As brick and mortar worked to re-invent itself over the past few years, the words on everyone’s lips were engagement and experiential environments. Make environments friendlier and entertaining. Keep the consumer involved in the shopping experience by offering all kinds of choices in order to distinguish shopping in a store from shopping online – make it personal. But now what? Even these recent catch phrases to revive retail have quickly become obsolete.

During the down time we are all suffering while we wait and hope that our world will once again open up, and we’ll be free to wander and connect, participate in life socially, we must reassess our priorities. What will our businesses look like going forward? Where should we be investing our time and attention? Clearly, DTC will dominate the marketplace. If you do not have a robust DTC website, now’s the time to put one in place. Shopify makes it easy. Use this down time to construct it and/or perfect the one you have. So many people are out of work and willing to take on projects they can do while sequestered, at very reasonable rates. I realize it’s hard to compete with the majors as far as the dollars needed to acquire and retain the consumer. But that’s always the case when industries that are entrepreneurial born and driven, mature and grow into behemoths. We’re not confronting a new phenomenon in this. Now we have to focus more intently on how we can distinguish our companies, our brands, from the pack. And we must be cognizant of the new concerns the consumers will have when they shop. Hygiene, safety and packaging, in addition to style and fit and price. Messaging by everyone is now critical. How is my company, my brand, my product addressing the consumer’s concerns? How will we make ourselves relevant tomorrow?

As we all sit and ponder the future, worried, frightened, feeling uncertain and unstable, and even more distressing, out of control, we need to take back that control where we can. And we control the messages we send to our consumers via social media and ad spend, as well as in the products we design. Think long and hard, while you have the time, about who you want to be, what you want to represent, how you want to communicate with the individuals who buy your products. It’s not and won’t be business as usual when the economy begins to reopen. Start planning now regarding the reallocation of the dollars you have to allocate. We’ve all suffered from what the major retailers have been doing to take care of their needs and circumstances. Do you really want to spend as much as you have in the past, on product development for brick and mortar giants (unless it’s your own)? Do you want to get back on the merry go round of seasons and promotions and allowances and margin agreements and mark down contributions? I’m not saying that you should forsake those channels completely, but this crisis has put their value into a new perspective. You may need to take on more inventory risk, as what you go into production on will not be pre-sold. But there are ways to mitigate the risk reasonably, and there are ways to finance it.

A new definition of partnership must come out of this disaster. Simply referring to a vendor as a partner isn’t enough. Those retailers who are working with vendors to create a path forward, while acknowledging the extraordinary circumstances, and are willing to share the pain, are the ones you need to build stronger and stronger relationships with. During times like these, we all see whom we can count on and whom we cannot. And though in commerce, memories are often short when the opportunity for revenues is at stake. The treadmill we’ve been running on in the apparel industry in particular, has not been a level one, and the harder we run the steeper it seems to get. One way to get off of it is to speak honestly and directly to your customers. Build a later native distribution channels. So formulate your messaging now! Fully understand how what you are offering fits into the world as it will be, not as it was. Be ready and able to articulate that, both in your words and in your products.

Bottom line, plan, plan, plan. Be prepared. The one fact that I repeat so often when I speak to designers, business associates, students and colleagues in the fashion industry, is that regardless of what state the world is in, when we get up each day to go out (or even to stay in, as we are doing now) we get dressed. We will always need apparel, and we’ll always want products to embellish ourselves with. We remain vain enough to care about how we present ourselves to the world. Whether what we purchase is inexpensive or costly, fashionable or just plain comfortable, statement making or subtle, practical or impractical, we will continue to buy things to wear. So take heart during these dark times. Unlike so many industries and great companies of the past, yours will NEVER be obsolete. What you do will always be needed. Now it’s up to each one of us to make sure that we tell our own stories and create our own narratives, that we emerge from our isolation with a better perspective and a clear, concise, sustainable plan, as well as the most thoughtful and appropriate product we can create. It’s a new world.

Gary

Happy Holidays to everyone.

This certainly is a time to be contemplative. We all have a lot on our plates, and though many of you probably feel frustrated, uncertain and frightened, we have endured past the panic point by now and we’re still here. Now it’s time to plan for the future, and it’s time to readjust the relationships in our respective industries that haven’t been working properly or fairly for quite a while.

With this in mind, what has this crisis taught you so far? Think hard on this. For me, it’s been a manifold lesson. The crisis has reinforced my belief in clear and honest communication. It has emphasized the cooperative nature and needs of our professional and of our personal lives. It has taught me that when we recognize we’ve lost control of many important aspects surrounding the way we conduct business, it’s poignantly unsettling. It has also taught me that we can survive much more than we could ever have imagined.

Hence, what should our go forward best practices be? How do we formulate and realize a new set of expectations and needs, as we re-enter the business world?

Brands and manufacturers must level the playing field with their retail partners. Margin agreements, sell-through percentages, swaps and outright end of season returns, must all be reconsidered. Since the brands/manufacturers must lay out all the funds upfront for design, development and production, and then wonder what margin they will ultimately end up with after the season is over, it’s obvious that the formula is wrong and the relationships are one-sided. When Purchase Orders stop being contracts we can count on, it’s obvious that the relationships are one-sided. When terms of payment can be arbitrarily changed without mutual consent, it’s obvious that the relationships are one-sided. When retailers break price whenever they choose during a season, forcing sales and promotions globally, it’s obvious that the relationships are one-sided.

It’s also obvious we won’t be able to correct all the above problems that impact the vendors to retail so seriously, but there are multiple things we can start doing immediately, company by company that will help begin the process. Don’t sell to a store if you know that the net margin you will achieve won’t be enough to make the sale worthwhile. Be more selective in your channels of distribution. Demand better terms on your purchase orders, or walk away. Be reasonable with your retail partners, when in fact they behave as partners. Some problems must be shared. But there are numerous options, as we’re coming to realize now, that can be offered to retailers that can still guaranty you a reasonable margin.

Spend less on product development, develop fewer seasons and fewer styles. Be much more diligent on your edits. Assort better for the new normal so you are confident that what you’ll be distributing has the best chance of appealing to your consumer. Seasonal demarcation will become less important. Think more about when your products will actually be in the stores and what your consumer wants from you at that time. Don’t produce limited runs of product that end up reducing your margin due to minimum quantity requirements from your factories, or excessive costs of development. Learn to say no.

Take control of the sale. Avoid distributing to locations where you do not feel your product will be received well. Conbsider taking your in-house sales team off of commissions, at least for the majors! Instead, incentivize them based upon their ability to sell into styles that perform best. You all know what your sell-through percentages are at the majors. Award your sales team for identifying those styles that performed the best. Focus on bottom line over top line. If dilution is excessive in any one distribution channel, learn why and don’t repeat the same mistakes that caused it in the first place.

Chasing DTC sales when you’re not netting a reasonable percentage on them is a futile endeavor. Success in DTC channels is in the data. Study it and plan ahead. Spend thoughtfully on digital marketing, and know where you can and cannot compete.

Finally, the leaner your organization is, the better you will be able to withstand adverse circumstances. Maintain an overhead that is manageable. Do away with whatever isn’t a must have until you’re on your feet again and able to use profit to build growth with. The perspective that more top line volume will inevitably lead to more profit is not a certainty.

This pandemic is testing our will, our skills, our business plans, our outlook on business and life in general. It feels as if the game we’ ve palyed for so long is finally over and a totally new one is soon to begin. What I’ve learned so vividly in these past weeks and months is that we cannot be in control of everything, but those aspects of our personal and professional lives that can take contorl over, we must exercise and we must do so prudently, honestly, with integrity and with vision. Hard choices need to be made during the recovery, once the world reopens for business. It won’t be easy. Q2 will be a loss for just about every industry and there’s nothing we can do about it. Take the losses in stride and devote your energy toward planning for the future. If you can get past the reality of this loss emotionally, you’ll inevitably find it easier to get through it financially, and be better positioned to make rational choices on your way to prepping for the new normal.

Be safe, be smart and stay healthy.

Best,

Gary

Good Afternoon,

I realize it’s Sunday and usually a day to relax, but circumstances dictate otherwise. I hope that all our recent emails are not clogging your inboxes or becoming annoying in any way. We are trying our best to be informative and proactive, as well as sensitive to today’s situation.

We keep saying that these are unprecedented times. Well, they really are. And during times like these, both the best and the worst in humans tend to rise to the surface. We at Hilldun are doing everything possible to be the best we can be under the trying circumstances. From the responses and correspondences we are getting from everyone in the Hilldun universe, you are all meeting the challenges as well.

I’m sure you are not just concerned about health issues today, but also about your businesses and your financial welfare. We are here to help as much as possible. We realize that when this is over, and it will be over at some point, there will have been significant damage done to all of our enterprises. We will work with each and every one of you as you develop plans to manage cash flow and to move forward. This incredible disruption in business is affecting every single aspect of our professional and personal lives. We understand this acutely. The reality though is that life will go on, just as it has after every global upheaval or War. And we must keep that moment in the forefront of our thoughts.

Our intent at Hilldun will be to consider all reasonable options that you propose so we can continue to support your businesses and be both prudent and diligent in the process. You can count on us to be there to help you, but you must do your part simultaneously. Be prepared. Do your homework. Be realistic and conservative when you do your financial planning for the months ahead. As for us, we will be honest and forthcoming with advice and suggestions. We may not be able to say yes to every request, but we will take every one seriously and thoughtfully. That you can be assured of.

Now is the time to assess what the future will look like when the shipping windows open up again. Start formulating cash flows that we can review with you. These are things you and your accountants or financial advisors should prepare. Most of you do this already as a matter of course. But particularly now, the more ready you are, the faster we can all regain a sense of stability and future opportunity, and the faster we can determine what we are able to do to help.

There are so many lessons to be learned from this, and we’ll have many years to discuss them and evaluate them. Surely, our world will be changed forever. The apparel industry’s focus will definitely be altered. Supply chain considerations, seasonal cadences, how we show and sell, relationships with retailers, and the industry’s vulnerabilities and strengths, will all need to be rethought. But right now you need to be smart and hopeful, sensible and cautious, and strategize for the future of your individual businesses, even under these worst of circumstances. The cream rises to the top. I’m confident that over Hilldun’s 60 + years in business, we’ve cultivated the highest level of client in all of you.

Stay safe and healthy,

Gary, Cris and Josh and all of us at Hilldun