Black-owned fashion businesses experienced a surge of attention in mid- 2020, following the wave of protests in response to the murder of George Floyd. The focus on racial inequity also prompted many major players in the fashion industry to pledge to increase diversity.
As we enter 2022, how much has changed? The short answer is that Black representation in the fashion industry and consumer demand for Black brands have increased — yet Black brand owners still face challenges, including unequal access to funding and opportunities.
Black-owned Brands Continue to Face Systemic Challenges
The Black community is projected to have $1.7 trillion in buying power by 2022, a dramatic increase from $320 billion in 1990. However, less than 10% of fashion and accessory brands are Black-owned businesses. Additionally, less than 1% of Black-owned brands are sold in American retailers, according to The Black Fashion Movement.
Lack of access to capital is one of the biggest roadblocks for Black-owned brands. According to a recent McKinsey report, Black entrepreneurs start out with capital of only about $35,000 on average, compared with $107,000 for white entrepreneurs. Once off the ground, Black-owned businesses continue to face greater challenges. As a result, only 4% of Black-owned businesses are still in business after three and a half years, compared with an average of 55.5% for all businesses.
Impact of Black Lives Matter Movement
In the wake of 2020 Black Lives Matter protests, social media was flooded with support for Black-owned brands and designers, resulting in a meteoric rise in sales for often previously unknown brands. The increased attention also prompted efforts to create more sustainable change. Brother Vellies’ creative director, Aurora James, established the Fifteen Percent Pledge, calling on retailers to commit a minimum of 15% of their product ranges to Black-owned businesses.
More than 250 Black fashion professionals formed the Kelly Initiative and a public letter to the Council of Fashion Designers of America (CFDA), alleging that the organization has allowed “exploitative cultures of prejudice, tokenism and employment discrimination to thrive.” The Kelly Initiative published a plan for creating equitable employment access within fashion industries for talented Black individuals.
Designer Victor Glemaud launched In the Blk, which seeks to provide networking opportunities for Black designers and creatives in the global fashion industry. Another initiative, the Black In Fashion Council (BIFC), launched by fashion public relations executive Sandrine Charles and Lindsay Peoples Wagner, the current editor-in-chief of Teen Vogue, also works to increase diversity in the industry.
COVID-19 Slowed Progress
Unfortunately, COVID-19 has slowed progress. Across all industries, Black-owned businesses have been particularly hard hit, with studies confirming that they are more likely than others to be shuttered by the pandemic. Pre- pandemic, many small fashion brands relied on pop-up events and trunk shows, which were virtually nonexistent for months. While some apparel businesses were able to pivot to online sales or produce face masks to stay afloat, many did not survive the lockdown.
Outlook for Black-Owned Brands
Now that most restrictions have been lifted, there is hope that Black and other minority- owned fashion businesses will rebound. There are also signs that the industry disruption caused by COVID-19 has created opportunities for systemic change. To date, 27 retailers have taken the 15 Percent Pledge and helped 385 Black-owned brands get their products on store shelves.
The Designers Hub, a mentorship and grant initiative founded by Bethann Hardison in collaboration with the CFDA, aims “to help Black designers and Black-owned fashion brands and businesses and to provide them with guidance and opportunities to grow.” In 2020, underwear brand ThirdLove established the TL Effect, an in-house mentorship program that provides resources and a $20,000 cash grant to women of color entrepreneurs.
Pyer Moss founder Kerby Jean-Raymond and global luxury group Kering disclosed the details of their joint project, Your Friends in New York (YFINY). As Jean-Raymond told the New York Times, the community-focused platform is akin to an incubator in that it provides Black fashion designers with financing, production and planning support; however, it owns no equity in the brands it supports. YFINY’s first class includes Edvin Thompson of Theophilio, Anifa Mvuemba of Hanifa, Taofeek Abijako of Head of State and Raul Lopez of Luar.
Key Takeaway
While the wheels are in motion, much work is still left to be done to improve representation and diversity in the fashion industry. To position your business for success, it is imperative to work with experienced professionals who can help you secure funding, reduce risks when executing contracts and form lucrative partnerships that can help grow your brand.
Howard D. Bader serves as general counsel for clients in a wide range of industries on an international scale. With over three decades’ of legal experience, he has represented clients in numerous legal matters, including commercial litigation, intellectual property, bankruptcy and creditor’s rights and mergers and acquisitions, as well as numerous corporate transactions and business law matters.
Howard D. Bader
hbader@sh-law.com
(212) 784-6926
www.sh-law.com
