Navigating the economic fallout from the coronavirus pandemic has not been easy for small businesses. Fashion designer Rebecca Minkoff is no exception.
“It’s the longest, most exhausting days of my life,” said Minkoff, 39, and the co-founder and creative director of her own fashion line. “I want to scream a lot, but I have to stay positive.
“I’m a fighter, and that’s the only way that I know how to get through this.”
Minkoff isn’t disclosing her gross sales figures at this time; however, in a May 2019 interview, she said it was “north of $100 million.”
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She got a forgivable loan. Her employees hate her for it.
She also isn’t divulging how much of a financial hit she has taken during the pandemic but said she has lost 70% of her business with the temporary closure of department stores. (When asked if she had taken out a federal Paycheck Protection Program loan for small businesses, Minkoff declined to comment.)
That means she had to make some tough choices.
“We had to, being the worst week of my life, do some layoffs, do some furloughs, make aggressive pay cuts across the board,” said Minkoff, who normally resides in Brooklyn, New York, but is quarantining with her husband and kids in nearby Long Island.
That’s led to cuts: Thirty-six percent have reduced their own pay and 8% have cut their employees’ pay, the latest CNBC/SurveyMonkey Small Business Survey found. Of those surveyed, 13% have furloughed some or all of their employees and 11% have laid off some or all of their employees.
‘We’ve fully revamped’
For Minkoff, surviving means changing the way she does business. Now, with 25 remaining employees, she’s focusing solely on being a direct-to-consumer company.
“We’ve changed everything about what we do, whether it’s the marketing, where we’re advertising, how we’re talking, who we’re talking to, to really make sure that we stay alive after this,” she said.
She pivoted after getting feedback from her customers.
“I asked my consumer at the beginning of this, what did she want from me?” she said.
“She wanted a break from the news. She wanted great content, she wanted helpful tips.”
Minkoff has answered by speaking directly to them through her social media accounts, like Instagram, where she shows off her products, engages followers in conversations and does a live series “The Happiest Hours.” She also interviews people, such as actress Jenna Elfman and “Shank Tank” investor Barbara Cocoran, on her podcast, ‘Superwomen.”
‘We don’t necessarily want to go back’
The change in direction is something that may be here to stay for Minkoff.
“We don’t necessarily want to go back,” she said. “We’ve learned a lot about ourselves as a company.”
“The fact that we can dedicate 100% of our time right now to our own business and our own consumer directly, has made a big impact,” she added. “It’s something we plan to strengthen in the future.”
The pivot may also help if many of the department stores she works with shrink or don’t survive at all.
Luxury chain Neiman Marcus has filed for Chapter 11 bankruptcy protection and Nordstrom said it is permanently closing 16 locations. Meanwhile, Lord & Taylor is reportedly looking to liquidate its stores as soon as they are able to reopen.