Independent fashion labels are struggling

Victoria Feldman and Tomas Berzins’ ascent in fashion is a story not dissimilar to that of other emerging talents. The designers met in 2009 at French fashion school Esmod. During their studies, Berzins worked for Alexander Wang, while Feldman gained experience at LVMH-owned department store Le Bon Marché. When they graduated in 2011, they invested €10,000 in savings to launch their namesake brand Victoria/Tomas.

“We had no business experience or contacts,” recalls Feldman. “We were just two young designers with a passion to show our vision.” A turning point came in 2013 when Victoria/Tomas was selected as a finalist — the youngest ever — for the Hyères International Festival of Fashion, Photography and Accessories. Luxury retailers including Neiman Marcus, Harvey Nichols and Colette came knocking thereafter and sales soared.

In 2017, the brand staged its first fashion show in Paris. A year later, it was making about €1mn in sales — not an unusual figure for a small label. Business was growing steadily, which gave the duo confidence to manage their own distribution (until then, the brand had worked with sales showroom Riccardo Grassi, which also handles sales for Erdem, Holzweiler and Farm Rio, among others). “We thought, OK, we’re on the right track,” says Feldman.

Yet, in June, Feldman and Berzins announced that the brand would no longer be operating after years of struggling to cope with challenges including a contracting wholesale market — its primary distribution channel — spurred on by Covid. At the beginning of the pandemic, the brand lost 70 per cent of turnover, says Feldman. “Every day we received cancellations on existing orders. And while there were some clients who still made orders, factories were shutting down and we couldn’t get production done.” 

Even after lockdowns lifted, business never fully bounced back, says Feldman. Seeking to excite buyers, the designers experimented with new concepts such as reversible clothing. But it was a tough idea to sell virtually, she recalls. Even when buyers could travel again, many still preferred online appointments to in-person meetings, due to a busy calendar. It was also difficult to win over new clients because “they wouldn’t place an order on designs they had never seen [in person] and touched”. 

Limited distribution channels were the death knell for Victoria/Tomas, which joins a growing list of independent fashion labels to have closed their doors this year. American designer Mara Hoffman called an end to her eponymous label after 24 years in May. That same month, British womenswear label The Vampire’s Wife said it would cease trading; Australian brand Dion Lee went into voluntary administration; and Chinese designer Calvin Luo said he was calling it quits with his namesake label. 

Others have had to make a necessary pivot: in February, ahead of New York Fashion Week, Puppets and Puppets founder Carly Mark announced that she would halt the fashion label in its current iteration and relocate from New York to London, where it would have a second life as an accessories brand. London-based womenswear designer Roksanda narrowly escaped administration by selling her company to The Brand Group in May. 

Business is tough for founders of independent brands, who often find themselves trying to maintain a healthy cash flow while being dependent on wholesale partners for distribution and extra support with marketing. That in itself isn’t new. But the fashion landscape has become more fraught and volatile amid a luxury slowdown, with the wealthiest shoppers prioritising investment purchases from high-end companies. 

“The economy is under stress and one of the byproducts of that is the fashion business has suffered,” says Mark A Cohen, a consultant who this month retired from an 18-year tenure as director of retail studies at Columbia Business School.

“It’s a very difficult environment for emerging brands that are in the $200mn-$450mn range or less,” says Gary Wassner, CEO of Hilldun Corp, a New York-based group that finances and factors more than 400 brands, including Isabel Marant, Golden Goose and 2024 Andam Grand Prize winner Christopher Esber. Against the backdrop of market volatility, financing has been drying up. For private equity firms, “fashion has become a ‘don’t invest in’ category,” he says. “Generally speaking, they don’t want brands that people haven’t heard of.”

Brands big and small have also been hit by the closure of luxury multi-brand store Matchesfashion (creditors ranging from Prada to Toteme are still owed millions of pounds) and the fire sale of luxury marketplace Farfetch to Korea’s Coupang (Farfetch’s long-term bond holders are owed more than $400mn). Smaller independent boutiques have also reached the end of their lifeline. In June, Alyssa Lau announced that she would be halting New Classics, the multi-brand ecommerce site she founded in 2014. In November 2023, speciality retailer LCD said it was closing down after 11 years in business.

“We started with $15,000 and grew it slowly, investing all profits back into the company,” says Lau. At its height, New Classics brought in $400,000 in sales annually. But it became tough to keep up with the pace of fast fashion and the discounting increasingly offered by luxury retailers, she says. “Growth really started to take over things. You need to have more budget to carry more collections. We needed to make money off our margins and we couldn’t keep up with the steep discounting. Considering how much [the business] was generating, it just really wasn’t worth it.”

The implications of luxury’s retail shakeout are far ranging. One London-based designer, who has not been receiving payments on time from their wholesale partners, has had to ask their parents for additional funds, as well as take out a loan, in order to pay their suppliers, they told the Financial Times on condition of anonymity. With many independent brands hanging on by a thread, the fashion week landscape could look very different in September.

Meanwhile, surviving stores are more risk-averse than ever. “They are not being adventurous because they don’t have that room in their bottom line,” says Hilldun Corp’s Wassner. “They’re buying items that have great sell-throughs and a dedicated repeat consumer. So many brands that are emerging don’t yet have a significant following. In the past, [stores] might have nurtured them, but right now they’re not taking those chances.”

As the industry has evolved, so have the requirements for a successful operation. “Spending a lot of money on flagship stores and fancy fashion shows and marketing campaigns is an indulgence. That’s not wise unless you’re so flush with cash that it doesn’t matter,” says Cohen.

“Young brands have to look at all of these things and create efficiencies in their businesses that allow them to maintain enough cash to continue on,” agrees Wassner.

Feldman and Berzins now see fashion as an outlet that has allowed them to express their creativity. Since closing their atelier, they have turned their hands to collaborations and other creative endeavours. “The business gave us the possibility to make ourselves more known, because people who are interested in fashion — they are also interested in, or come from, other fields, like music, art and other creative direction,” says Berzins. 

“Since we took this decision, we’ve received requests [from other brands and collaborators] and have not stopped working,” says Feldman. “We’ve got a lot of projects coming up. So, for today, the Victoria/Tomas brand has ceased to exist, but Victoria and Tomas as individuals? We carry on.”

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