As JOOR processes over $100 billion in transactions, the platform faces tariff concerns, evolving consumer behavior, and cash flow issues within the fashion sector.

In the midst of evolving consumer preferences and systemic challenges within the fashion wholesale sector, JOOR, a prominent B2B wholesale platform, is reporting a mixture of caution and emerging opportunities, especially in light of turbulent geoeconomic conditions. The platform has processed over $100 billion in transactions, indicating its significant role within the industry as it grapples with shifting dynamics.

The current climate is marked by fears of impending tariffs that have raised concerns among fashion brands. JOOR’s CEO, Kristin Savilia, emphasized that the uncertainty surrounding tariffs has led to a general hesitance within the industry, with many brands opting for a “wait-and-see approach.” Speaking with Karen Webster, Savilia noted, “The majority of [brands] are not being very proactive, if I’m being honest.” She observed that the anxiety over potential tariffs is beginning to trickle down to consumers, with recent PYMNTS Intelligence data indicating that over half of consumers are worried about rising prices due to tariffs, and a significant 78% expect increased costs and supply chain disruptions.

While the anticipated tariffs primarily concern relations with China, early rounds impacting Mexico and Canada have lessened immediate concerns. Brands ranging from large retailers like Walmart to luxury houses such as LVMH are closely monitoring their Chinese sourcing and manufacturing links due to the potential for substantial disruptions. Despite some industry executives believing rising costs can be passed onto consumers through price hikes, Savilia expressed skepticism about this strategy, noting a leveling off of price increases expected in 2024 after a discernible downturn in the consumer appetite for premium-priced goods.

In addition to tariff concerns, fashion brands are facing significant cash flow issues stemming from payment delays from major department store groups. Savilia highlighted that payment timing challenges have become a universal issue reported by JOOR’s brand partners, stressing the difficulty posed by a major luxury department store’s decision to implement a restructured payment schedule beginning in July 2024. This change includes distributing payments over a twelve-month period, a strategy that has spurred many brands to diversify their retail partnerships, particularly focusing on independent retailers that provide more reliable payment histories.

To adapt to these evolving industry demands, JOOR has introduced its Discover platform, which harnesses transactional data to optimize connections between fashion brands and retailers. This platform serves not only as a marketplace but also as a prospecting tool, offering insights into potential retail partners’ characteristics, including aesthetic compatibility and payment reliability. “By enabling the brand, a digital way to go in and be matched with retailers in any region of the world, that would be a good fit for them. This is new,” said Savilia. The results have been promising, with JOOR reporting a significant rise in partnerships with independent retailers, which now account for 59% of the platform’s gross merchandise value by the end of 2024.

Savilia expressed cautious optimism for the future, citing two consecutive quarters of growth in JOOR’s gross merchandise value, with a modest 2% rise in Q3 2024 and a more substantial increase of 9% in Q4. She pointed out a shift within the luxury segment, where brands have hesitated to implement additional price increases after three years of consistent hikes, indicating a turning point in consumer behavior.

As JOOR continues to navigate and adapt to these complex dynamics, Savilia is keenly aware of the broader transformations at play in the retail landscape, remarking, “I have this love for the department store, but it’s definitely a different world, and the adaptation there just doesn’t seem to be happening as quickly as it needs to happen.” This statement encapsulates the pressing need for the industry to evolve in response to both economic pressures and changing consumer expectations.

Source: Noah Wire Services