Black Lapel Co-Founder Discusses Coronavirus Impact, Sees “Significant Headwinds” for His Small Business

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Small businesses like custom menswear clothier Black Lapel are going to be hit hard as the coronoavirus crisis deepens.

Small and early-stage companies selling consumer goods, which includes the entire universe of menswear brands I cover here, as well as innovative women’s fashion startups, direct-to-consumer eyeglass businesses and travel companies like Away, are particularly vulnerable to the current shocks.

I caught up with Derek Tian, Co-Founder and Chief Marketing Officer of Black Lapel, to discuss the current and potential future impact of the coronavirus on his business.

Before I get to the interview below, I’ve known Derek and his co-founder Warren Liao since 2012.  When I first had lunch with them near their offices in New York City, I had just launched Modern Fellows.  One of the first serious pieces I wrote for my blog was an interview with Warren.

Since then, Black Lapel has become one of my favorite destinations for online custom suits. Their use of online technologies has made custom suiting more accessible to men everywhere.

When I’m looking for input on retail or customer service or men’s clothing, I often turn to Derek and Warren. They are extremely thoughtful.

When I visited with Derek at Black Lapel’s showroom in 2018, he talked about finding ways to serve their customers in a more comprehensive way, including through partnerships with other innovative brands like Quero, which makes stunning handmade-in-Spain dress shoes.

So, when I had questions about the coronavirus, I turned to Derek.

Interview with Derek Tian, Co-Founder, Black Lapel

The coronavirus outbreak has hit us hard – in ways that no amount of business continuity planning could have anticipated.

Effect on supply chain operations

It first affected our operations on the ground in China where we have some of our staff and where the bulk of our supply chain rests.

Our lead times ballooned in January as China grappled with the virus and the slow turn times had a dampening effect on demand.

We started to see some of that capacity rebound in late February but, with the virus now on our shores in the United States, we’ve had to prioritize keeping our employees and customers safe.

Effect on U.S. operations and employees

This led to the very difficult decision of closing our office and showroom effective Tuesday, March 17, with all employees working from home.

Thankfully, we’ve been spending the past couple of weeks hard at work in converting our showroom processes into virtual experiences online.

That means we’ll be able to offer some measure of continuity for our New York City customers and that we’ll be able to keep our showroom staff employed for now.

Our online customers will still have continued access to shop the website.

Uncertainty and significant headwinds ahead

That said, I expect to face significant head winds through the remainder of 2020.

Research showed that during SARS in 2003, consumer spending on non-essentials dropped by as much as 20%. CoVid-2019 is much much more infectious than SARS and will have an impact that will be multiples of that.

As people hunker down for the count and as the kinds of life events like weddings, celebrations, job interviews, etc, get delayed or are put on hold, we’re going to see a lot more pain down the road for Black Lapel and for any business that is in the consumer discretionary segment of the economy.

We’re working with our creditors and suppliers to do what we can do mitigate costs and manage our cash flow to try to avoid impact on our employees.

But I’m concerned that, unless we see direct intervention from the Federal government to aid small and medium-sized businesses like ours — in ways that must exceed our current frameworks for what is considered normal or typical responses — impact may be unavoidable even in the best case scenarios.

The worst case scenarios include permanently shuttering Black Lapel and beyond that, are unthinkable in terms of long term damage to the American and global economy. Certainly nothing I’ve ever encountered in my lifetime.

If we don’t take drastic action now, I think you’ll start to see comparisons to the Great Depression before all is said and done.

Of course, this too shall pass and we’ll get through it as a country. It’s just going to be a painful 12-18 months for a lot of folks.

About Jake

Jake is an expert on men’s style and fashion based in Washington, DC. He founded Modern Fellows in 2012 to get to know the entrepreneurs and innovative clothing and lifestyle brands helping men dress sharp in the digital age. He has published hundreds of articles on style and apparel, and regularly interviews small business CEOs and startup founders about industry trends. Jake has written about entrepreneurship, international business and fashion for outlets including Business Week, Forbes, Inc., Details Style Syndicate and Primer Magazine.

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