Abdullah Abo Milhim: "Fashion companies need a plan B"

Buenos Aires –

The postgraduate coordinator at the Marangoni Institute London, Abdullah Abo
Milhim, was in Buenos Aires giving a masterclass about the
fashion value in the era of big data, analytics and intelligence
artificial.

With a strong background in finance, economy and luxury products,
Abdullah has worked for Merrill Lynch and Bloomberg, among others. And,
since
2010 is part of Marangoni.

FashionUnited had the opportunity to talk to him about the impact
of the Covid-19 pandemic, innovation and the relationship between fashion
finance and technology.

How do you think the effect of the Covid-19 pandemic will impact the
fashion industry?

Obviously we have a big problem, but it’s not the first time
the fashion industry faces something so massive. It had to deal with the
crisis
of 2008 that produced a breakthrough in the industry globally.

The fall of the financial markets is bad for the fashion industry
because it increases the level of market risk. So when the
risks increase financial access becomes problematic, but the greatest
concern is the disruption of the industry’s supply chain
of global fashion.

High risk means higher interest to pay on debts
and everything becomes more expensive for companies. The fall in activity
leads to a decline in profits and earnings and that leads to
more difficult for companies to finance themselves.

I think fashion is going to suffer until the markets see something
positive.
Everything looks very serious and the fashion companies, which until a few
weeks ago
were seeing what was going on, they need to implement a plan B.

Problems in China and increasing numbers of cases in Europe
make things more problematic for fashion companies because they
It’s a global problem.

Fashion must start to focus on consumers who are
feeling distrustful about the future. We’re not going to see the damage in
the
industry until a few months from now when companies will present their
annual numbers, but we know there won’t be any good news.

Where is the fashion going?

It’s interesting because at this time fashion was having a great
exposure due to other industries, it’s like I’m coming out of
shell. It used to be that fashion wanted to work with other industries and
now it’s the other industries that want to work with fashion.

Today the world of technology and the world of finance are very
interested in fashion companies. Today we have banks that put the focus
in fashion, they have luxury goods and investment departments, for
example. Also consulting firms, like Deloitte and McKinsey have their
division
and what has been seen recently is that technology companies
are moving in that same direction. Amazon, Google and all the
large technology companies are focusing on fashion and luxury, so
fashion and business are a very strong alliance.

Why do you think this has been happening?

The world has changed a lot since the financial crisis of 2008 and after
bad experience we had with this crisis, which was the second biggest
after the depression of 1929, many fashion companies thought it was
the time to strengthen and improve their business models. It was necessary
understand much more about finance and economics and perhaps the
opportunities
were in places where the financial crisis had left them
exposed to become new emerging market economies,
for example. So fashion began to feel that it should not only focus on
its own industry and had to expand into others to strengthen its
positioning and to find new opportunities. The interest among
industries has helped fashion grow and at the same time start to
think about how to integrate into other markets.

How is the relationship between fashion companies and technology?

There are different ways in which fashion companies relate to
technology. The first model is that of companies trying to change
the entire business model, to include a lot of technology and make the
things in the most technological way possible. There are also other
companies that
are still exploring and are unsure of the incorporation of the
technology. And then there are those who are taking very small steps
in the ways they do business, so the use of the
technology in fashion is very broad. At first we saw it as a
way of adding social networks to draw the attention of
consumers and then moved to another level in terms of having
technology as a resource within companies. Traditionally, if you
take the theories of how companies generate value, you see the
technology as a resource, as a tool, but then the concept
evolved into data production. This data is very powerful because
can be used to give information to companies and, of course,
that there are large companies that are concerned about the negative side in
terms of ethics and privacy.

How do fashion companies use technology?

In terms of fashion design there are obviously new technologies in
the way it works today. In addition, innovation can be used to
improve performance in supply chain management. And, also
there are other versions in which the technology can be used by the power of
data to predict behavior and see trends in different
ways without neglecting fashion sense because the forecasts of
trends are trend forecasts, but these are only new
ways.

It all leads to the culture of the business and how much they want to
incorporate from
technology, which is sometimes not well judged. From time to time people and
companies see technology as something that will destroy fashion, but
the message is clear: technicians are not there to destroy fashion or
fashion sense because no one wants to take the place of a designer
traditional, but technology will always be a tool.

This article was originally published on FashionUnited.com.ar,
translated and edited by Kelly Press

Photos: Loli Laboureau