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Brands and Retailers Hold On During the Shutdown – Vol. 3

Our third volume in the series and while our quarantines may be nearing their end, the long-lasting repercussions of our nearly two months off are only now beginning to take shape. For this installment, we hear from Johan Lam of 3sixteen, Jason Pecarich of Division Road Inc., Phillip Proyce of Lady White Co. and Christophe Loiron of Mister Freedom.

Johan Lam of 3sixteen

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3sixteen flagship in LA. Image via businessyab.

Who are you?

My name is Johan Lam, I’m the co-owner of 3sixteen and also a partner in Self Edge LA and NY.

Where are you located?

I live in Los Angeles.

What are the restrictions currently in place there?

We have been under a statewide Shelter in Place order here in California since mid-March. We had decided to shut down our retail stores about a week prior and have been operating online solely since then.

How have the last couple weeks affected you?

The effect on 3sixteen has been so huge that I honestly don’t know if we’ll fully understand the ramifications until months after things open back up. We started seeing delays as early as January, when China was being hit hard with the virus and shutdown, halting our production of trims and product packaging with our new branding.

When California ordered everyone to shelter in place, our factory in San Francisco immediately stopped operating, with a ton of our product near completion or still on the sewing lines. As states across the country started shutting down, many of our retailers simply could not take their wholesale orders and have had to either cancel or ask us to hold them until further notice.

Now, we’re planning and adapting to how this might affect fall 2020 production as we start to bring in fabric from Japan without knowing when our factory will open up again or which retailers will still be in business when it comes time to deliver. Not to mention, we are in the middle of building out a flagship store in New York that was slated to open in early May, which is a huge investment in and of itself.

At this point, we have no idea when the actual open date will be. Fortunately, we still have a thriving online presence, which has, so far, been enough to keep the lights on and keep paying our staff’s salaries and benefits.

What does your business need to weather this crisis?

Anything would theoretically help, but the truth is that a huge number of businesses will not be able to survive this. The issue is that pretty much every businesses’ revenue has decreased massively during the shutdown. If our landlords are kind enough to defer our rent, that just means we’ll owe a huge sum of money once everyone goes back to work.

The government funding that was passed for small businesses would help a lot to cover payroll and rent, and would be forgiven if used properly, but the money has already run out and most of the businesses that we know did not receive the benefits. At this point, we can only rely on our customers to continue purchasing enough for us to stay alive and weather this storm.

What (if anything) is bringing you peace and calm right now?

I have always been an optimistic person so despite the inundation of constant bad news, I haven’t felt too much stress. The numbers in California and the nature of our state’s geography give me hope that we can start to open things back up sometime in May.

I see everyone staying home and doing their part to sacrifice everything for the sake of those who are most at risk and that is really encouraging. My wife and I are fortunate that we’re still able to work from home and earn a paycheck. Our two boys are absolutely loving every minute of it. We’re doing our best to cherish this weird time that we get to spend all day everyday together as a family.

How do you see this crisis changing the fashion/retail landscape?

I think all of our lives will be changed forever from this and the effects will still be felt years from now. I think commercial real estate will take a huge hit as many businesses realize they don’t need to spend money on offices when they can be nearly as productive with their employees working from home, or retail stores when they can do a lot of business through their online presence.

I think people in general will be a lot more conscious about their overall cleanliness and limit their exposure to crowded spaces and avoid physical touch with strangers. Most of my in-person credit card transactions these days do not require a signature so I don’t see why anyone would need to sign when swiping their card going forward.

Every business is going to need to adapt to the new normal in order to survive.

Anything you want to tell customers or the community?

If you’re one of the fortunate ones, who is able to continue working from home and getting a steady paycheck, please consider supporting your favorite independent local businesses in some way, especially the ones that are continuing to take care of their staff. Every little bit helps right now.

Phillip Proyce of Lady White Co.

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Lady White Co. HQ in Silver Lake. Image via Phillip Proyce.

Who are you?

Phillip Proyce, designer and founder of Lady White Company.

Where are you located?

Los Angeles, CA.

What are the restrictions currently in place there?

All non-essential businesses are currently closed, which includes our Flagship store in Silver Lake and most factories.

How have the last couple weeks affected you?

Very thankful that loads of people are shopping online since the shop is closed. Our factories are currently shut down unless it involves PPE. Certain releases will be postponed like our summer restock on 2-Pack T-shirts. FW20 production is held up as well but it looks like we are nearing the end and facilities will start opening soon!

What does your business need to weather this crisis?

Small businesses need all the help they can get right now—but it’s not coming so easily. Paycheck Protection Program had a promising look to it, though it wasn’t very effective. Our biggest concern is making sure our staff and customers are safe and healthy.

We’ll be back at it soon enough. A little help from the government is always good, but our customers are really the ones that make everything turn day to day.

What (if anything) is bringing you peace and calm right now?

To be honest I feel pretty calm and collected through the whole situation. I’ve been quarantined at the studio just making sure everything is in line for when things reopen. All we can do now is get prepared. The website has kept us really busy throughout and luckily we had a couple product releases planned before the crisis hit.

How do you see this crisis changing the fashion/retail landscape?

Some people think the fashion calendar will be disrupted, I don’t know about that. More importantly, I hope people focus on source of origin after this. Just look at the medical mask debacle. This virus made everyone realize how important domestic manufacturing can be, well beyond T-shirts and sweatshirts.

Anything you want to tell customers or the community?

Thank you all for such support during these uneasy times. Truly blown away by the amount of orders and overall enthusiasm we have seen. Our second sneaker collaboration releases next week (LW x Reproduction of Found)!

Christophe Loiron of Mister Freedom

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Mister Freedom HQ. Image via Christophe Loiron.

Who are you?

Christophe Loiron, worker at Mister Freedom. We are purveyors of vintage-inspired clothes under that brand label, a collaboration with Japanese Sugar Cane Co, with production in USA and Japan. Our store also offers a selection of vintage clothing from the 1800s to 1980s, collected around the world.

Where are you located?

Our operation is located in 7161 Beverly Blvd. Los Angeles, California 90036. This 3,200 sq ft building in Hollywood is our sole location, with everything under one roof:  HQ/atelier/office/show room/retail space.

What are the restrictions currently in place there?

Clothing stores are non-essential businesses. For safety and as our civic duty, we decided to close the shop to the public on March 16th, a few days before official city orders on March 19th. The shop is still closed as of May 5th.

How have the last couple weeks affected you?

We decided to take our computers home by the third week of March, and improvised in order to not let our ship sink. We quickly set up a system to have only one person of our small team present at the HQ to accomplish precise tasks. This efficient military-like operation approach both keeps our team safe, and maximizes our chances of still having a job after the storm is over, whenever that is.

With staggered hours, the key is communication, synchronization, hard work, and impeccable customer service. Our online patrons have been very kind and patient, and all of us are working longer hours than before the crisis.

Early on, we decided to slash prices as an incentive on our webstore. Having 30% off sales is definitely not our business model, considering our smalls margins. This is not sustainable but we decided to take a hit on perfectly fine inventory rather than sacrificing our jobs.

Regarding production, everything will be delayed this year, we have no idea what to expect.

What does your business need to weather this crisis?

At our small company level, we will do everything in our power internally to not add to the economic burden. Our landlord offered rent deferment, but this idea of a large balloon payment in December is the sword of Damocles, no thank you.

I knew from the beginning that we had to adapt, and on the quickness. The time at home won’t be about binging on Netflix but about anticipating and adapting, the only way to survive this year for many.

What (if anything) is bringing you peace and calm right now?

Our strong team, the knowledge that our clothes are not seasonal fads but valuable investments, and the generosity and support of our customers.

How do you see this crisis changing the fashion/retail landscape?

It will all depend how long this soup sandwich lasts. Many brick and mortar businesses will sadly not see the other side. Distributing giant online hubs will benefit from that vacuum, but I believe the trauma might make a dent in rampant consumerism, and eventually make consumers a bit more regarding when it comes to Country of Origin, quality, and necessity of the clothes they purchase.

Anything you want to tell customers or the community?

We do have a few industrial machines to make samples at the HQ, but chose to have our operator stay home during the lockdown, so no in-house production. I made a few jersey protos, but soon decided not to try myself at flimsy selvedge denim masks or the likes.

The idea of producing facial protection without proper specs (so much conflicting intel from official sources out there!) was too much responsibility considering the consequences. If I ride my motorcycle with a baseball cap thinking I got a DOT helmet on, I’m in trouble. And if you think a bandana will keep you safe from virions, we’re all in trouble. On this one, I’d rather look forward to the government upping its game regarding PPE, because medical equipment is way above my pay grade.

Instead we figured that doing our part would be to both stay safe, and avoid contributing to a potential global depression on the horizon. So we are not abandoning ship, and are doing our best for the many individuals connected to its activity in the US and Japan.

To the many who are helping us ride that storm, we thank you from the bottom of our hearts. You all stay safe and TCB and we’ll catch you on the flip flop!

Jason Pecarich of Division Road Inc.

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Division Road Inc. Image via Division Road Inc.

Who are you?

Jason Pecarich, Proprietor of Division Road, Inc.

Where are you located?

Seattle, Washington and online.

What are the restrictions currently in place there?

There is a statewide Stay-At-Home measure; Shutdown outside of a limited scope of essential businesses.

How have the last couple weeks affected you?

Seattle has been informally shut down since late February when offices emptied and homes filled, so we’ve been impacted for two months now. Of course, physical volume was slowed, then nonexistent. However, we continue to operate online and instead of doing “Sales/Promotions” we’ve been taking and donating a share of our Gross Profits (which does not represent our profitability) directly to on-the-ground action plans for our local area which has been severely impacted by the crisis. Our customers have rallied to the cause, continue to be loyal, and that’s all keeping us afloat.

Everything is affected when you shut down major economies, regionally and globally. From supply chain logistics, to production timelines, to being able to receive and release, it’s been ground to a halt and there are huge disruptions to plan around daily for all of us in the business.

The real issues aren’t today, but the domino effect that will occur over the next year. Our business from raw material to product is really a two year cycle, so it’s going to get real interesting. We do a host of collaborations, sourcing, and are regularly and closely in touch with all of our manufacturing brands so we’re constantly thinking and planning through this event and the ricocheted effects for today and the future. There is going to be overage and shortages, and many things outside of all of our control.

We also know the impact this is going to have on our manufacturing brands, as they’ve all had cancelled orders on SS20 product made and there will be even more in FW20 where they’ve ordered the materials and are somewhat into production, from retailers who probably won’t make it or will just let them hold the bag.

So, the first thing we did before everyone got locked down was have our brands ship everything they could of our orders for Spring-Summer, paid them in full and even some deposits on Fall-Winter so they had capital flows to keep their business alive, employees retained, as much as possible.

Economies are chains, so while we are a team of three, we have over 30 vendors, who have bigger teams, and they source from others who have teams, so we can’t save ourselves without trying to save others.

What does your business need to weather this crisis?

Ha! Something more than it’s getting? Loans are dangerous, because you’re just digging a deeper hole to climb out of, but Federal Reserve direct lending at the 0% they’re at, would be a stopgap. We went into rent negotiation right away, and that’s also a partnership. I’m hearing a lot of nasty things about people bailing on rents, yet still operating in the space to a degree. We’ve got to be careful of creating bigger mountains to climb and more resistance to the economy with some of these policies and practices.

Small businesses that really need relief (PPP, EIDL, etc.) are not getting it. Big business and politically motivated groups will get the assistance. We removed a lot of market dynamics in ’08 that proved that and are being repeated.

We’re not planning on anything meaningful from governments; local, state, or federal. Technically, we’re the business that meets all of the requirements perfectly, but how the money is being distributed and to whom will fall short of the what’s being advertised.

So, we’ve got to look at how we make this work without any assistance. In these regards, we’re very pessimistic, yet that’s why we’re also able to navigate rather than be subjected to the fallout of the circumstances present today.

What (if anything) is bringing you peace and calm right now?

We have a great team, strong partnerships, and amazing customers. That and the fact we were decently positioned for a downturn, and in the real heritage goods we specialize in, we’re protected with authentic quality, value, longevity, rarity, and just specialness which much of the retail market lacks.

Equally excellent, are the health workers and front-line [workers] who are showing up for the rest of the country and our health.

How do you see this crisis changing the fashion/retail landscape?

This crisis puts many of these changes on fast-forward, and has added momentum. I don’t think physical retail will disappear, but it will look different and will have to be special. That’s been happening for a while. You must provide an experience and knowledge for the customer why should they come in, and for the future that’s more true than ever.

In terms of the business, many changes will be hard, but hopefully for the best. The fashion calendar, conspicuous consumption, and overproduction of goods in the broad market has to stop and from “luxury” brands to fast-fashion and everything in the middle, we’re destroying our planet, customers’ pocketbooks, and contributing to human rights issues.

I think all of that is on the chopping block for various reasons, so that will be in the long-term. We think, just like with the last recession, that a new group of customers will really start looking at what they are buying, how it’s made, the story, the history, and the real truths of products.

Also, it’s great to see customers spending with brands and companies they see acting responsibly and with integrity. If you pull the veil on any industry there is some dark stuff, but there are bright spots and customers are looking for those and to support them directly.

Anything you want to tell customers or the community?

First, thank you for your patronage as without you, we could not exist and persist. We started our Contribute Through Craft Program last month, where we’re taking 10% of gross profits (sale minus cost of goods) and each month donating it to revolving action plans on the ground, focused on our Pioneer Square neighborhood in Seattle.

For the month of March we actioned our Cash-in-Hand plan to those disrupted by this crisis, and for April we’re enlisting a local restaurant to produce some special meals for a local homeless shelter, called Feed-the-Need plan (lead image).

We would have preferred to do something in a bigger way, but frankly if everyone focuses on their own concentric circles and what they can do to support others within those arenas we’ll all get through this better off.


Has your business been affected by the pandemic and shutdown? We want to hear about it, please answer the following questions and email a photo to editors at heddels dot com.