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After eight seasons hosting presentations in smaller-city fashion weeks, Dutch luxury brand Ninamounah held its first runway show in Paris Fashion for the Autumn/Winter 2022 season after breaking into wholesale luxury retailers including Farfetch, LN-CC and Paris concept store Elevastor. The milestone should have been worth celebrating; instead, it was overshadowed by a cocktail of external factors working against the brand’s supply chain such as factory closures, shipping issues, delayed deliveries and, now, inventory stuck in war-stricken Ukraine.

Creative director Ninamounah Langestraat and brand director Robin Burggraaf say they feel like they’re swimming against the tide. “We finally went to wholesale and it’s just so frustrating when people want your stuff but you cannot deliver,” says Langestraat.

Ninamounah manufactures across Europe: leather in Italy and The Netherlands, footwear in Portugal and tailoring across The Netherlands and Ukraine. Supply chain woes began in March 2020 as lockdown set in, says Burggraaf. At any given time, factories would close due to a Covid outbreak, halting production entirely, he says. Then came the shipping issues, as every brand started to panic-ship products at the same time, services and borders were overwhelmed, adds Langestraat. At certain points, they had to pay delivery services extra cash to search for their lost inventory at borders or in warehouses.

Fashion’s current supply chain issues stem back to factory closures in China in early 2020, which soon after spread to other countries. Availability and cost of freight then compounded the problem, says Adam Cochrane, analyst at Deutsche Bank Research. Larger brands, with leverage and ability to fly products, bounced back quickly. For smaller companies, the issues have dragged on. Faced with shortages of raw materials, factory closures, increased shipping costs and new demands from luxury retailers, independent designers are working double time to try and stay ahead of the fashion calendar.

Ninamounah held its first Paris Fashion Week runway show for Autumn/Winter 2022.

New York brand Partow is stocked at major retailers including Harrods, Neiman Marcus and Net-a-Porter. Wholesale represents 70 per cent of sales, according to the brand. Partow relies mainly on manufacturers in Italy to produce its clean, elegant tailoring and dresses, meaning founder Nellie Partow has struggled to source raw materials and produce throughout the pandemic, with no sign of let up. “Resort 2022 was probably one of the hardest deliveries we had. There wasn’t anyone to do the work! And, it wasn’t just with one or two suppliers, we saw this all over Italy.”

Shortages have hiked material prices for Partow, she adds, and once garments are made, she’s facing more expensive, and longer deliveries. “To my surprise it’s worse recently — there’s been a domino effect,” she says. Because retailers are still on the same calendar, nothing has changed in terms of when things should be delivered, so Partow is finding it requires a lot of investment in suppliers and advance planning to make deliveries on time.

During the pandemic, brands have had to assess their dependence on a limited number of production hubs and think about the overall supply chain, says analyst Cochrane. The best way to limit the impact of supply chain woes is to source from multiple destinations including some that are nearer to the end market to reduce geographic and transportation risks and combine this with more warehouses across different countries holding more inventory, he says. “This all comes at a cost to margins. We believe a balance will be struck according to the level of risk tolerance.”

With constantly changing timelines, it can be tricky for brands to manage retailer expectations. Burggraaf says the brand has had to delay deliveries with retailers multiple times. “You feel so bad, like you’re not trustworthy as a brand. We were worried we’d lose stockists.”

Partow deals with some of the biggest factories in Italy that are manufacturing for a lot of the luxury heritage brands. While she notes the larger luxury players have the same sourcing and manufacturing issues, they are better placed to combat supply chain woes because they have large networks of mono-brand stores and established direct-to-consumer sites where they can adapt product delivery schedules and push back end-of-season sales. Unlike small-to-medium sized brands which are very exposed to multi-brand retailers, Partow says.

Before 2020, multi-brand retailers would cover the cost of all deliveries from brands. However, since Covid and Brexit, they typically will only cover costs of one singular shipment, which can pose a dilemma for smaller brands with supply chain delays, says Burggraaf. “Before Covid you might send the ready-to-wear first and then do the shoes when they’re ready a week later,” he says. Now, if two or three styles are delayed, the brand must keep the whole order in the warehouse for weeks or decide to pay for individual shipments. “Margins aren't that great for the brands to begin with, so taking on extra shipping is not great,” says Burggraaf. “You almost earn nothing in the end,” Langestraat adds.

Controlling more retail sales is one potential solution. Partow launched its e-commerce store in 2020, with e-commerce sales up 400 per cent in the last year. Partow reduced orders with some suppliers, focusing on partners that were more understanding and flexible on changing timelines. “The ones that maybe didn't necessarily have the bandwidth to do that we just had to really evaluate is this the right decision for the company right now? Maybe we come back to them at a different time, but right now, it's not working with what's going on.”

Ninamounah launched direct-to-consumer in November 2021, which allows them to have more control over sales. “If you deliver to retailers two months late, it's already mid-season sale. And then, one month later, it's end-of-season sale. If we have things that are exclusive to us on our website, we decide. I think we only started our Autumn/Winter sale at the end of January,” he says, instead of the typical post-Christmas sale. In the tradeoff, brands have to cover costs of marketing and acquisitions to drive direct sales, which is a bonus of working with retailers.

Supply chain inflation on the whole is a headwind for luxury margins, which can be offset by raising prices, says Credit Suisse luxury analyst Ling Xie. Strong pricing power allows luxury labels to take future pricing actions if inflation keeps rising, she adds. Heavy-hitters, including Chanel, Louis Vuitton and Gucci have all raised prices this year to cope with supply chain issues. For independent labels, it’s not as simple to hike prices without established brand power and market dominance, experts agree.

It’s not just brands that are suffering, Partow wants to point out. “All the suppliers and vendors we work with, it's a really big domino effect,” she says. “When you talk to some of the owners of the Italian mills or the factories we work with, there've been so many that have just broken down and cried to us.”

Covid-19 restrictions may be winding down across the West, but with the war in Ukraine and now Covid in China, the worst is far from over for small-to-medium sized brands.

Ninamounah produces most of its tailoring in Ukraine, just near the border of Slovenia. Currently, a large portion of its AW22 collection is stuck in a Ukrainian factory. “We’ve considered taking a van of supplies to help people and going to pick up the collection ourselves,” says Langestraat. “But the factory said it’s not safe.”

China is also a worry. So far, Ninamounah has only had one cancelled order during the pandemic, from a store in Hong Kong, due to the current Covid outbreak.

Partow doesn’t manufacture in Ukraine or China but is still feeling the effects of the geopolitical turmoil. “The world is in such flux and there's so much that's changed in the last two years,” she says. “There’s an empathy and an understanding in terms of what's going on with human beings. And then at the same time, there's this world in which we have to deliver. We all have to work together and find solutions collectively and mould the business based on what challenges are coming up at any given time.”

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