New York-based fashion brand Diane von Furstenberg (DVF) is taking significant steps to adapt to the challenges presented by the Covid-19 pandemic. In an effort to reposition itself and remain relevant in the fashion industry, DVF is undergoing major changes, including transitioning into a digital brand and focusing on the lucrative Chinese market. Unfortunately, these changes have come at a cost, as reports indicate that the majority of the brand’s employees have been laid off and all but one of its stores will be closed. The sole remaining store can be found in New York City’s Meatpacking District.
While the economic impact of the pandemic played a significant role in this decision, it is worth noting that DVF was already facing difficulties prior to the crisis. The brand had been struggling to compete with fast-fashion brands and had experienced various changes in design and executive leadership in recent years. The appointment of CEO Sandra Campos in April 2018 was a step in the right direction, but she has reportedly resigned since then. The closure of the London store in late May, along with the administration filing of DVF Studio UK, further highlighted the brand’s need to revamp its business model.
Despite the challenges it faces, DVF is hopeful that its focus on the Chinese market will lead to profitability. According to a report by McKinsey & Company and Business of Fashion titled ‘The State of Fashion 2020’, China has been responsible for a significant portion of global fashion industry growth over the past decade. In fact, it accounted for 38% of growth across various segments and a whopping 70% of expansion in the luxury segment since 2012. With such promising statistics, DVF sees the Chinese market as a strategic opportunity to breathe new life into its business.
By embracing digital transformation and targeting the Chinese market, DVF aims to overcome the obstacles it has faced in recent years. The brand recognizes the ever-evolving nature of the fashion industry and believes that its strong reputation and strategic approach will help it thrive. However, only time will tell if these changes will prove successful for DVF.