The conflict between Russia and Ukraine is bringing severe damage. As Russia is a considerable supplier of natural gas, metals, and oil, it was economically affected during the war. High technology exports to the country were restricted. Moreover, Russian banks are excluded from the SWIFT international payment system. The country’s ability to consider its foreign currency reserves has also been restricted. But it’s not all about Russia! The war is affecting the whole world in several ways. Many countries depend upon Russia for energy and it’s severely affecting their economy. Moreover, different companies working in Russia observed a sudden change in their current working system and future plans. Not satisfied with disturbing operations in Russia, some companies have even decided to permanently disengage from the country and its government. So, nothing has been unaffected by this war. We can even name it a pandemic.
What’s the effect of Russia’s invasion on the fashion industry? Is it getting affected the same way as other industries? Let’s check the complete details in this article.
The Russia-Ukraine war caused an increase in gas prices by as much as 40%. The negative aspect is that the stock market flip-flop will definitely affect the consumer psyche and their buying capacity. It’s disrupting the roots of the textiles and apparel market. The most considerable effect is the increasing burden on logistics. Higher oil prices are putting high pressure on logistics and shipping companies. Definitely, when these companies will face problems delivering fashion items, they will cause an increase in the prices. That will eventually damage the stability of the fashion industry and cause unsatisfied customers.
“It might be too early to say what the long-term impact of the conflict will be, but inflation on apparel prices and supply chain delays are to be expected in the coming months,” says Louise Déglise-Favre, GlobalData’s associate analyst for apparel. So, it’s challenging to determine how brands will be able to manage drastic changes in their current working systems and plans. However, top brands like Leatheriza Affinity will successfully be able to handle the situation by readily accepting the changes and calmly looking for solutions. So, there will be no effect on their customers as they have to maintain their authenticity.
The other considerable problem the fashion industry is currently facing is higher prices of raw materials specifically petroleum-derived fabrics such as nylon and polyester. Of course, when raw materials cost high, the product’s price also increases. That’s resulting in expensive fashion items driving consumers away. Plastic-based fibers for textiles require an estimated 342 million barrels of oil every year and an increase in oil prices will affect the cost to produce these artificial fibers.
It’s not all about increasing prices! The fashion industry is also facing problems in effective production processes. Brands plan their investment strategies compared to the profit they will get. However, if they don’t get proper stock, they will definitely lose estimated sales. It’s due to two things:
● Lack of key material:
As we told you before, due to increasing oil prices it has become challenging for the fashion industry to manage the proper material required for product formation. Even if companies strive and manage to deliver the key material, it would cause a delay in production. How? Check out the next point.
● Deficiency of workers:
As the war has affected the working systems of companies, they may not be able to maintain employee retention. Shortage of workers will cause ineffective or delayed production.
Those were the considerable points regarding the effect of Russia’s conflict. But that’s not at all. There are still many things to discover. Especially the effect of war on the leather industry because the fashion industry is closely related to leather. Fashion brands like Leatheriza Affinity offer mens leather jackets, shoes, bags, and many things every year. So, it’s essential to discuss the effects on the leather industry. At last, we’ll compare the effects and determine the future circumstances. So, let’s begin.
The war has severely affected the hide market while there are also many other factors playing their role to disrupt the industry. If the situation remains the same, factory workers will not be able to work properly to convert hides to leather. Moreover, if companies fail to manage proper systems for leather production, it’ll result in a decrease in production. Definitely, when production is less, costs increase. You can also determine the increasing prices of leather products through this.
The most considerable problem leather brands face is demand disruption. Brands estimate the buyer’s demands by determining the average sale every year. In the same way, buyers have also estimated the budget for their leather goods shopping. The increasing prices disrupt everything. They will buy fewer, or no products when they are offered at high prices above their expectations. They will have to lower the quality or amount of products required to maintain their budget. So, now you can imagine how the effect of increasing hide prices is affecting the leather industry in such a severe way.
Leather is common in the fashion industry due to its appealing beauty and attraction. Whenever there’s a requirement for outstanding quality leather is considered. That’s why top fashion brands consider it as their basic product. You can imagine how much these brands will be affected as they consider both leather and fashion apparel. Whether it’s a matter of increasing leather prices or fashion items, they will have to suffer. Same way buyers are affected. Those who love leather fashion items like mens leather jackets confront changes in both the leather and fashion industry and have to pay higher prices for it.
So, that was all about the effects of the Russia & Ukraine conflict on the fashion & leather industry. If the war continues, the whole world will be affected in a way that nothing will remain the same. However, considering the current situation we advise brands to accept the situation instead of getting aghast at the sudden losses. It’ll help them make new strategies and take proper directions to not only overcome the loss but get desired profit.