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* Suits out, sweatpants in as millions work from home
* Officewear retailers close stores, file for bankruptcy
* Italians wool mills supplying them see orders evaporate
* Wool prices dive, Aussie merino farmers in dire straits
* WFH era begets new breed of stretchy, non-crease suits
By Silvia Aloisi, Jonathan Barrett and Martinne Geller
MILAN/SYDNEY/LONDON, Oct 15 (Reuters) - Italian luxury
designer Brunello Cucinelli makes men's suits that sell for up
to 7,000 euros ($8,200). But even he - like most people across
the globe - hasn't worn a suit for months, let alone bought one.
"We've all been locked away at home, so this is the first
jacket I have put on since March," Cucinelli told Reuters in
Milan as he presented his latest collection in September,
wearing a light grey blazer.
Most people in "white-collar" jobs are working from home,
with a newfound love of sweatpants, a trend that some experts
expect to outlive the pandemic. And few, if any, weddings or
parties are taking place.
This seismic shift in behaviour is having profound
repercussions across the supply chain for suits and formal wear,
upending a sartorial sector spanning every continent.
In Australia, the world's biggest producer of merino wool,
prices have been in freefall, hitting decade lows. Many sheep
farmers are in dire straits, storing wool in every available
shed in the hope of a rebound.
In northern Italy, the wool mills that buy from the farmers
and weave the fabric for high-end suits have seen their own
orders from retailers nosedive.
In the United States and Europe, several retail chains
specialising in business attire such as Men's Wearhouse, Brooks
Brothers and TM Lewin have closed stores or filed for bankruptcy
over the past few months, and more could follow.
Players at all levels told Reuters they were being forced to
adapt to survive, from farmers turning to other forms of
agriculture to mills making stretchier fabrics for a new breed
of suits that don't crease easily and are more resistant to
stains.
"People want to be more comfortable and are less inclined to
wear a formal suit," said Silvio Botto Poala, managing director
of Lanificio Botto Giuseppe, a wool mill in Italy's textile hub
of Biella which counts Armani, Max Mara, Ralph Lauren and Hermes
among its customers.
"With Zoom conferences and smart working, you'll see men
wearing a shirt, perhaps even a tie, but not many suits."
MERINO FARMERS CLING ON
Fine wool prices in Australia have more than halved during a
tumultuous 18-month period, as usually healthy purchases of
merino wool from Italian mills have almost ground to a halt.
The benchmark price for merino wool fell to A$8.58 ($6.1)
per kg in early September, auction results show, down from
A$20.16 in early 2019. It has since partly recovered to just
over A$10.
Andrew Blanch, managing director of New England Wool in New
South Wales, which sources wool from farms for Italian textile
makers, said many buyers now had excess supplies.
"They've all got wool to get rid of before they even come
back to the market here," said Blanch, speaking on the phone
from wool auctions in Sydney's western suburbs.
"If the shops aren't open, everything just backs up. A lot
of the orders we had bought wool against just got cancelled by
their clients in the U.S. and around Europe."
He said that China, which alongside Italy purchases most of
Australia's more than A$3 billion in annual wool exports, was
now "the only show in town" even though Chinese buyers were also
acquiring less wool.
Many merino sheep farmers are storing their wool in sheds or
storage facilities; though some who are still emerging from a
three-year drought are selling their bales into the weak market
to stay financially afloat.
"Not everyone is big enough to hold on to their wool clip
and wait for the price to change," said Dave Young, a farmer
near the New South Wales town of Yass. "We are in the position
where we have to meet the market within a relatively short time
after shearing."
Young, who has about 4,500 sheep on his property, said he
had re-focused some operations to provide lamb meat instead.
WOOL WEAVERS' GLOOM
A jump up the food chain to northern Italy, and Botto Poala
expects his mill's sales to fall by 25% from 63 million euros
last year and that they will take 2-3 years to recover.
However his business is insulated to a degree because it
mostly makes womenswear fabric; others are more pessimistic.
"For some businesses, we are talking a 50%-80% plunge in
sales," said Ettore Piacenza, general manager of the Fratelli
Piacenza wool mill, a centuries-old family business with an
annual turnover of 52 million euros. He also heads the wool
mills department of the local business association.
Botto Poala said more than 50% of his mill's turnover now
comes from wool that has been made stretchier by treating in a
particular way or having lycra added to it.
This is because whatever demand is left for suits, it is
more likely to be for fabrics that are more resistant to stains
and don't crease easily, while such cloth can also be used for
casual wear, wool mills say.
Italian luxury label Etro, for example, has just launched a
"24-hour jacket" made of jersey and mixing wool and cotton.
'MY CLIENTS ARE IN PJs'
A gradual move towards casual wear has been going on for
years. In 2019, even Goldman Sachs - a bastion of bespoke suits
- relaxed the dress code for its staff. Not to mention the rise
of the Silicon Valley hipster crowd.
But COVID has turbocharged that shift - boosting sales of
comfort clothing and sportswear at the expense of business
attire.
In the second quarter of this year, when much of the world
was in lockdown, Nike was the hottest brand according to Lyst, a
global fashion search platform that analyses the behaviour of
more than nine million online shoppers a month.
It was the first time since the Lyst Index began that a
luxury fashion brand did not take the top spot.
Gap's Athleta unit, which sells tights, jogging pants,
sweats and workout tops, was its best-performing fashion line in
the three months to Aug. 1. Sales rose 6%, compared with a 52%
fall at Banana Republic, known for dressier attire.
Suits ranked among the highest-discounted and lowest-selling
items in France, Italy and Germany in September, according to
data compiled by StyleSage, which combs prices on websites.
Cheaper to mid-market labels including Asos, Topman, Guess
and Hugo Boss had the steepest markdowns, at up to 50%.
The collapse in demand for office attire led storied U.S.
retailers, also including Jos. A. Bank and J. Crew, to file for
bankruptcy over the summer and many more retailers face an
uncertain future.
Retail consultancy Coresight Research forecasts that 20,000
to 25,000 U.S. stores could close by year-end, compared with
about 9,800 in 2019.
"I confess I have not purchased any office wear this year. I
can tell you for a fact walking around the City, there are very
few suits on display," said James Whitaker, a partner at law
firm Mayer Brown in London.
Indeed business has been "extremely slow" even since the end
of lockdown for Jasper Littman, a tailor trained in Savile Row,
the London street renowned for its bespoke tailoring for men.
Littman said his clients, mostly lawyers and bankers, "are
sitting at home in their pyjamas".
He usually makes about 200 suits a year, but has only made
63 so far in 2020.
Customers are reluctant to risk riding the train to pick up
even the suits that are already made with a deposit paid.
"There's no point in them doing that, because they'd be
taking delivery of a suit they can't wear."
($1 = 1.4017 Australian dollars; $1 = 0.8503 euros)
(Reporting by Silvia Aloisi in Milan, Jonathan Barrett in
Sydney and Martinne Geller in London; Additional reporting by
Jill Gralow, Carolyn Cohn and Aleksandra Michalska
Editing by Pravin Char)
