Downsize is an Understatement
Luxury fashion brand DVF, owned by Belgian designer Diane von Furstenberg, will all but shutter its operations in the United States. DVF is to close 18 retail locations across the country, only leaving the New York flagship store open, a location in the meatpacking district that von Furstenberg owns. The United States operation, DVF Studio LLC, lost $22 million in the financial year ending 31 December 2018, a fall from losses of $35 million in 2017.
Staff Layoffs
The brand’s announcement to close follows the redundancy of 75% of the US workforce in May 2020, leaving only a skeleton staff complement of less than 100 to oversee operations. Employee layoff was via Zoom and without input from von Furstenberg. Members of the DVF executive team were also let go in June 2020, including the VP of Production, Holliday Hofstatter, and CEO, Sandra Campos.
European Closures
The USA closures follow on the heels of DVF shutting its international businesses in London and Paris. On 26 May 2020, DVF Studio UK permanently closed the doors of its Mayfair, London flagship and the company went into administration. In a letter to UK clients, the designer stated that the brand had become a victim of the COVID-19 lockdown.
A New Business Model
Would you like to rent DVF apparel? Since February 2020, this is possible via the label’s subscription service on dvflink.com. For a monthly subscription of $159, members can rent any four DVF pieces at a time, with free exchanges and returns. Customers can also keep their favourite pieces at a discounted price. As of June 2020, shoes and accessories are not available to rent.
What these Changes Mean in Asia
DVF has a strong presence in Asia, including in China and Japan, where the brand has 26 and 12 stores, respectively. Will the USA and European store closures, along with changes in marketing strategy open up the doors in China even wider for the brand? According to ‘The State of Fashion 2020′, a report from McKinsey & Company and Business of Fashion, China accounted for 38% of global fashion industry growth across segments over the past 10 years. Will targeting China be the light at the end of the tunnel for DVF?
DVF on WeChat
Here’s an interesting point to close on: DVF has had a WeChat account since May 2013. The brand hasn’t posted anything on the social media platform since December 2018. Very strange … maybe DVF has chosen not to be active on Chinese social media, which is vital to promote a brand, a country with more than 670 million users which equates to a massive marketing opportunity.
