Wake-up Call: The ‘Dire’ Financial Inequity Facing Young Designers Under Inflation
As New York Fashion Week winds down, there have been many designers sitting – watching on the sidelines – due to economic hardship.
What was an increasingly fast-moving pipeline that seemed to favor generationally wealthy designers has been tipped due to inflation and all-time high industrywide expectations – making the cost of living and operating a small fashion business in New York City essentially prohibitive without significant outside capital. Despite wide-reaching calls to diversify fashion, the industry is quickly moving in a financially homogenous direction that often deters talent hailing from low- and middle-income backgrounds.
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Institutions at all levels of the fashion industry – from education to public relations and production – are now racing to try to correct the balance of economic disparity.
“Economically speaking, it’s totally unfeasible to come up as a brand right now unless you have a ton of personal money. I couldn’t estimate the proper number [of inflation] as things have crept up across the board in such a dramatic way – it’s forced me to bring everything in-house,” said Chris Peters, the designer behind CDLM who, despite widespread acclaim and retailer interest, will not be showing this fashion week. Instead, Peters has been working on a consulting project in order to pay his bills and will show off-calendar in October when that job is completed.
While long-standing grants and programs have aimed to help young designers, with inflation, they contend it’s not enough. They believe there’s sometimes a disconnect between what prize money judges think it costs to run a brand – as many of them work for corporations that foot the bill of business necessities like office space, supplies and other expenses – and the larger economic reality.
Peters, for instance, is currently figuring out how to navigate everything from rising shipping costs to a 15 euro per meter spike in the price of wool. “I don’t have the money to absorb those costs but at the same time I don’t want to raise prices and not sell anything,” he said.
He went as far as to call this moment “the most dire for independent designers in the world of modern fashion. There has never been a time when there are less retailers, that it’s been more difficult to produce, you can’t get sponsorship like you used to and there are not a lot of programs or grants.”
In June, IMG and Empire State Development revealed recipients of their New York Fashion Week small-business grants that awarded a total of $500,000 of taxpayer state funds to independent brands to help foot the bills for their fashion shows this season – and fuel economic development in the city.
The application required designers to send in company financials showing hardship over the pandemic – but did not require the disclosure of personal finances. In doing so, the grant was given to at least three designers that WWD knows hail from personal wealth (one of them being actress Rosario Dawson, whose brand Studio 189 received the grant).
Designers were also evaluated on their previous showmanship and how future shows could bring economic prosperity to New York state – but failed to evaluate those show efforts based on each designer’s personal financial resources. One designer estimated that staging an elaborate fashion show can cost a minimum of $100,000 – and that’s excluding the cost of a collection.
When asked about the process and idea behind the grants, IMG’s director for designer relations and development Noah Kozlowski said, “New York Fashion Week is one of the largest economic generators for New York state so it was important to ensure NYFW keeps going and the designers integral to NYFW keep showing.
“We were really following a set of criteria established for our application process and not looking at personal finances – that was not applicable for this grant selection process. We were really reviewing in detail the impact that COVID had on their businesses in terms of year-over-year revenue as well as use cases of how they would use the funds. We were looking for designers with a high level of experience at producing shows at NYFW and how this grant would enable them to continue showing at a high level.”
A representative for Empire State Development said that the organization approved IMG’s proposed criteria, which were aimed at being inclusive. ESD typically requires personal financial disclosures in the grants it administers to avoid conflicts of interest when dealing with state funds, but IMG was responsible for administering the grant funds in this case.
When asked if personal finances would factor into future state fund grants, Kozlowski said: “We are open to reviewing all feedback.”
“New York City is known for its vibrant and diverse talent. The New York Fashion Week Small Business Grant will not only help small, independent designers showcase their work at New York Fashion Week, it will also uplift the work of the support staff on the designer’s team – textile workers, models, media production artists, and more,” ESD said.
While the onus is far from being only on IMG to support the needs of young designers from low-income and middle-class backgrounds, the fund does represent a larger disconnect that many designers complain about – a blind eye to what it costs to start a brand and the struggles of operating a young company.
The industry seems to have normalized the illusion that money grows on trees. “There is nothing less attractive to people in fashion than showing struggle,” said Peters.
Recent articles in fashion media have described designers as “scrappy” – even though they hail from families with significant businesses in real estate development, national sports team management, and globally recognized doctors who hold patents to essential medical equipment.
In a city where the average rent has crept past $3,500, and food, utility and medical-care bills are at an all-time high, the term “scrappy” for a self-supporting creative fails to describe the reality. And those are basic costs of living, all before running a business.
Designer Kadeem Lamorell, who showed one of the strongest thesis collections at Parsons School of Design The New School last year, has been unable to launch a brand so far. They work full time as the press coordinator at Telfar and are living with their family in Flatbush, Brooklyn, to save the “bare minimum” $10,000 they think they need to create a collection – a target that feels increasingly far away as costs rise. Lamorell is now working with a college friend on a collection instead of launching a solo brand in order to share costs.
“It’s definitely been a process, I feel like my major setbacks in starting a brand have been time and finances. Obviously because I have to work to live and it takes longer to get to a point in the brand to live off your sales, I have to work [another job] and that takes up a lot of time away from being able to develop the brand I want,” they said.
“A lot of the time I want to be in more spaces to meet more people in the industry but it’s held back because I can’t afford to go out this night or to be in those spaces – that sets people back,” Lamorell added.
While Lamorell has their eyes set on a nest egg of $10,000 to launch, what comes after, when it’s time for a second collection?
Tomorrow’s chief development officer Julie Gilhart, known for her work with emerging designers, said brands starting out “really need a minimum cash flow [of reserves] to last them three to four seasons. They end up having to try so hard to figure out the expenses on top of everything else – it’s too many hats for them to wear and they burn out. Now with inflation it’s really different because they need even more support; it’s just more financial stress on all aspects.”
By Lamorell’s modest estimate of the cost per season, that would mean needing $30,000 to $40,000 in the bank.
Peters launched CDLM in 2018 into a different fashion industry than his prior gig as cofounder of the buzzy design collective Creatures of the Wind.
He observed of the change in resources for young designers over the last decade: “There used to be a ton of things to help you out, support for brands in general and sponsorships for shows and that’s all evaporated to leave us in a space that’s so wildly different. You used to be able to get tens of thousands of dollars without really that much effort to put on a show. You need that seed money to start a company.”
Gilhart summarized what is, perhaps, an even more aggressive change – the weight of modern expectation and the cash required to keep up.
“What’s different today than in the past is the trajectory of growth. The expectation is so much faster now than it was for some of the great designers; they grew at a much smaller rate with only two collections a year.
“Our expectation of success now is that it has to grow fast – but if you start running in the fast lane, you have to have your pockets full of cash” almost before you start, she said.
This has proven a pain point for fast-rising designer Connor McKnight, who is among the brands to cancel his presentation this season due to lack of funding. Last-minute negotiations with an outside investor fell through, and he was faced with deciding between the general financial health of his company and delivering orders or holding a presentation, which he estimated would cost a minimum of $50,000 to stage.
“Generally speaking, when you come from a certain level of wealth, you have more of a cushion to fall back on if things don’t work – which is inevitable, you never hit a home run out of the gates. When you have wealth and can pay bills no matter what, it makes things easier; you don’t have to consider every risk and dollar that comes out of the business,” McKnight said.
Ultimately, without sufficient sponsorship or funding, McKnight decided the cost of a presentation was too risky to shoulder – especially considering that he already was spending in the ballpark of $20,000 to produce his collection.
“I support myself with the business and I pay for the business with the business,” said McKnight, who has a degree in business as well as fashion design. “I see this as one of those challenges I have to deal with. I wanted to make sure I was prioritizing the health of my business and delivering wholesale orders. I have some pretty amazing stores that I want to continue relationships with and I decided it was more important for me to make sure that happened than to force a presentation I wasn’t sure I could afford.”
Part of the issue in fashion accelerating its trajectory, requiring a higher and higher level of output and not acknowledging personal finances as part of grant selections, is that it holds all designers, regardless of their economic backgrounds or financial backing, to the same standard. This is often to the detriment of communities of color.
Lindsay Peoples, editor-in-chief of The Cut and cofounder for The Black in Fashion Council, said: “Often times Black-owned brands are pigeonholed and are expected to perform at the same level of competition as someone with more resources. I always have conversations with celebrity talent to make sure we call in inclusive brands [for New York Magazine shoots]. And then we will get feedback, ‘The construction wasn’t as good, the material wasn’t as impressive as they wanted it to be.’ A lot of Black designers don’t have the same access to funding and can’t make the work they want to make.”
Ben Barry, the dean of fashion at Parsons School of Design The New School, said that, “Part of the challenge is that we have so narrowly defined one route to being successful, that you need to show every fashion week season and this is the path. Designers who don’t have generational wealth have had to find different paths to starting their own business that don’t all require a huge investment of capital – so it’s about finding how we can recognize and validate those as important options.”
Barry, who was appointed dean of fashion in late 2020, is now racing to reconfigure Parsons’ long-standing admissions and grading criteria to accommodate a wider lens of backgrounds and opportunity. His academic career and research practice have focused on inequity and structural racism within the fashion industry.
In the past, low- and mid-income students at Parsons have complained that some of the matriculating population’s wealth bought them favorability and higher grades.
As New York becomes an ever-more expensive place to attend college due to rising living costs, Barry is working hard to nurture and develop a diverse feed of students enrolling in what is often considered one of the U.S.’ top fashion design college.
“We are increasingly working on this in everything from the application process to grading process. We know everyone is not starting from the same place – some students have incredible resources to put together their projects with and others don’t have the same privilege. There is deep work to do when evaluating applications and recognizing the resources that students do or do not have. We are now developing grading rubrics to evaluate the core of assignments,” he said.
Lamorell attended Parsons as part of a special scholarship program that carried over from high school. “It’s only because school gave me a good amount of scholarship because I came from a low-income background that I was able to attend,” they said.
“Alexander McQueen came from a more middle-class background and I just think if he wasn’t given a chance to go to school and develop his craft, we wouldn’t have had all the amazing collections he created,” Lamorell continued of the late designer, who was the son of a taxi driver.
“There are so many talented people missing who don’t have the resources needed to build their vision. Although I came from a low-income background, I had the privilege of growing up in New York City in a family exposed to artistic things, which gave me a leg up. There is not as much of that for a low-income kid from Wisconsin who doesn’t have access to the programs needed to elevate them.”
While Barry is working to right the long-standing criticisms of Parsons, he is still wary of other built-in luxuries that come with wealth – particularly the luxuries of time and contacts. As an individual in charge of helping to seed the fashion industry with a fresh wave of talent, Barry is think-tanking further ways to assist students from diverse financial backgrounds.
“When students are working three jobs to afford the cost of living and school, they are often forced to miss out on incredible opportunities – opportunities that are vital for building their career – because they do not have the free time or capacity to attend,” he said.
“This lack of time and capacity also can impact how they can engage in classes and in coursework relative to their peers that do not have to work to attend school. Additionally, low-income students often commute long distances to campus for classes because they do not have the financial privilege to live close by, further impacting the time and capacity that they have to devote to their coursework as well as to learning opportunities outside of school,” he said.
The idea of time as a luxury has come up as even detrimental when applying for scholarships. Lamorell said that he found the CFDA’s scholarship applications extremely time-intensive and geared toward students who did not have part-time jobs to keep themselves financially afloat. Designers who spoke with WWD also contended that the CFDA still requires a $400 payment to be featured on the fashion calendar, regardless of company size or financial status. One designer claimed they were removed from the calendar for nonpayment.
The CFDA, which declined to comment for this story, said that it has worked to streamline its scholarship application process to be more inclusive. It also noted that it charges independent designers a $50 calendar fee and that there may be confusion over the $400 charge.
“Generational wealth does not mean that the business’ long-term prospect is secure. It may benefit in the short term but long term, even family investment dries up when there is no return on an investment,” a spokesperson for the organization wrote.
But for designers experiencing financial troubles, more is at stake – a diversity of representation in the industry. McKnight spoke of what fashion stands to lose if it continues on its current trajectory: “I am a big proponent of the more stories being told, the richer the overall community is. If we are missing people from other backgrounds, we are missing out on other people’s ideas – especially for minorities. So many already have a stacked deck, it’s important to make sure stories are coming from our mouths. We have talked a lot about representation and I think this is all part of it.
“There needs to be a few more avenues, whether that’s funding options or ways people have needs addressed. It’s something to talk about – there is nothing to be ashamed about trying to run your business.”
According to Barry, a wider breadth of financial representation is better for the fashion industry overall: “By only having a narrow set of lived experiences in fashion, the business loses the full panorama of creativity – not only in ideas but providing products for a variety of wearers.
“Ultimately it’s designers pulling from lived experiences to create clothes. If groups are underrepresented or completely erased from fashion, so are products that cater to bodies and histories. That is the power of having a diverse pipeline of designers – it’s ultimately socially beneficial from a business perspective and dramatically expands the market for fashion to people who have been alienated and excluded.”
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