Small businesses, and particularly those owned by people of color, have been facing a multitude of challenges since the onset of the pandemic and its resulting impact on store closures, supply chain tie-ups and altered consumer demand.
And with the impact of inflation, those challenges aren’t letting up.
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The latest U.S. inflation rate reported by the Bureau of Labor Statistics in June, was 9.1 percent, higher than it’s been since the early ’80s.
A March survey from Bank of America found that 88 percent of small business owners said inflation was affecting their business, 68 percent have raised prices and 34 percent have had to reevaluate cash flow and spending.
And just as communities of color tend to feel the impacts of inflation more greatly, businesses owned by people of color that may have less access to capital to cover some of the rising costs, as has historically been the case, can also be harder hit.
Here, WWD hears from five fashion and beauty brands owned by people of color about how inflation is affecting their businesses.
Cuyana, a womenswear and accessories brand specializing in sustainable handbags, has had to increase its prices as a result of inflation, but company cofounder and chief executive officer Karla Gallardo said customers have remained supportive in spite of the hikes.
“Like most businesses, Cuyana is not immune to the impact of inflation. The current climate has faced us with challenges such as rising costs of our materials, production and transportation, ultimately leading to an increase in the price of our products. At the outset of the pandemic, when these fluctuations were very unpredictable, we decided to take on the initial increases without impacting our suppliers and customers,” Gallardo said.
“With every decision, we try to take a longer-term view, realizing our business works in symbiosis with people on both ends of our supply chain. But as it became more clear that the rising prices were here to stay, we recognized it was unsustainable for our business to maintain this stance. We shared this position openly and honestly with our customers. They responded with an outpouring of support, recognizing we would only take this step if absolutely necessary,” she said.
The Folklore Group
Courtesy of The Folklore Group
The Folklore Group, a company that creates a global ecosystem for consumers to explore, connect and shop from African- and diaspora-owned designer brands, echoes a different sentiment about inflation.
“There’s an old saying that when white people catch a cold, Black people catch pneumonia. I think that perfectly defines what is happening to Black businesses right now as a result of inflation. It is impacting the world, but it’s especially hard on Black people and Black businesses that already have historically been deprived of access to economic opportunities,” said Amira Rasool, founder and CEO of The Folklore Group.
“As a business that relies on the services of other businesses, we have seen an increase in prices from some of our service providers that we did not expect. We are also a business that services other small Black-owned businesses who are facing the same inflation issues when it comes to shipping, sourcing fabrics and other areas of production. Our success is dependent upon us being able to help these brands be more successful, and with inflation that has become a bit more challenging,” she said.
Brown Girl Jane
Malaika Jones, CEO and founder of skin care, body care and wellness brand Brown Girl Jane says inflation caused a spike in the brand’s production costs and materials.
“Effective mood-boosting solutions, especially during turbulent times, remain a priority for our customers who have made self-care a ‘must have.’ We’re grateful that sales for our fragrance-centered wellness collection haven’t been negatively impacted thus far, and we expect that to continue as women prioritize ‘feel-good’ supplements with immediate impact,” Jones said.
“We have, however, certainly experienced an increased cost in raw materials, freight and components due to inflation. We’ve made the choice to absorb those costs rather than pass them to our buyers and were able to do so due to a healthy mix of direct-to-consumer and wholesale distribution,” she said.
Courtesy of the brand
Hanahana Beauty is a clean skin care and wellness brand dedicated to uplifting women of color that has faced added pressure due to the economic situation in the country.
“We have seen the direct effects of inflation when it comes to the procurement of packaging and ingredients, especially regarding freight prices. For us as a brand, our primary goal at this moment is how do we sustainably scale? So we are being very diligent around how we spend our dollars…and what the outcome is,” Abena Boamah-Acheampong, founder and CEO of Hanahana Beauty, said.
“But also at the same time, we know that our customers are being affected, so we want to continue to educate our community on the effects that inflation has on Hanahana Beauty,” she said.
Courtesy of Revolve
Monti Saunders, the founder of luxe beachwear and womenswear brand Riot Swim, along with members from the brand team, say as the business continues to experience changes because inflation, they have learned to become more adaptable.
“In today’s climate of inflation, it has not only been taking a toll on POC businesses, but all small business owners are witnessing the impact of inflation. Small businesses are thinking outside of the box and seeking various opportunities to further expand. While facing difficult challenges that have made entrepreneurs become more adaptable during this time, there now has to be a shift of focus on operational and strategic planning that could directly impact customers, employees and the performance of the business,” they said in a collective statement to WWD.
“Customers’ buying needs have shifted with the rise of inflation, and more people are focused on buying essential items versus apparel, shoes and beauty products. Inflation has also caused some companies to raise their prices to sustain their business needs due to supply-chain factors. POC business owners are constantly looking for alternative methods to further secure their business requirements, and we’re hoping to continue making long-term goals even with the rise of interest rates and other numerous factors that inflation has affected,” they said.
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