New York Fashion Week is back, but the industry is bleeding jobs and influence

Janelle Funari was born into a Jewish family that had fled Europe for New York. She learned how to sew at the age of 9 and launched her first fashion brand in her 20s.

“My family did work in the garment center back in the ’50s so I feel like it’s in my blood,” said Funari, the owner of Funari NY, an athleisure and pet couture brand, with offices on West 37th Street.

But now Funari says she’s considering relocating her Garment District business to another state, or even another country, blaming worrying economic pressures. If she follows through, Funari would join an exodus years in the making: In the last decade, the city’s vaunted fashion industry has lost more than 50,000 jobs, according to a new report by the business group Partnership for New York City.

The report, released just ahead of New York Fashion Week, which runs through this week, points to “recent and historic trends that threaten New York City’s future as a fashion capital.” It cites the high costs of living and doing business, the growth of e-commerce, and the consolidation of the industry, which made it harder for up-and-coming designers to break in.

The report recommended establishing a coalition of fashion industry leaders to work with city and state economic development agencies; launching an in-person and virtual “designer accelerator” to help designer brands grow; creating a central designer campus; developing curated storefronts/pop-ups to encourage the discovery of emerging designers; expanding industry partnerships with schools; and reinvigorating New York Fashion Week.

“It’s much more difficult for a designer out of school who’s super talented to launch their brands,” said Joëlle Grunberg, a partner at McKinsey and Company whose research drove the Partnership’s report. She noted that office costs in New York City, along with talent and production costs, are now “through the roof.”

The report traces the history of the city’s fashion industry from its roots in the early 19th century, marked by “the influx of Eastern European immigrants skilled in clothing production” and the invention of the Singer sewing machine in Boston.

“The garment industry grew faster than any other industry in the U.S. between 1828 and 1858 and, by the mid-1800s, New York City was established as the center of American fashion design,” the report says.

The city became a global fashion capital in the 1940s,in part due to the German occupation of Paris during World War II. The decade also saw the creation of the New York Dress Institute, the Fashion Institute of Technology and Design and the beginning of an annual tradition, New York Fashion Week, originally called Press Week, established by publicist Eleanor Lambert at the Plaza Hotel.

But the industry saw a decline beginning in 2014, when it employed 182,000 people locally. By 2019, the industry had lost 20,000 jobs, and nosedived during the pandemic. At the same time, the report notes that “iconic and multi-brand retailers” closed, including Henri Bendel in 2019 and Barneys in 2020. Although the industry has since recovered several thousand jobs, it employed just 129,000 people in 2023 and is projected to decline further in the coming years.

Jonathan Schulhof, an executive vice president of the city’s Economic Development Corporation, said the agency had invested more than $5 million in garment manufacturing technology equipment over the last 10 years and supported fashion startups through its Founder Fellowship program.

“NYC is a global fashion and creative capital with an unmatched history of setting and driving trends and culture,” Schulhof said in a statement in response to the report. “NYCEDC is proud of our commitment to the fashion industry that has spanned decades and includes investments in innovation, real estate, and economic mobility.”

Grunberg said one important shift concerned what the report called “the decentralization of influence,” brought on in part by the emergence of social media platforms like TikTok and Instagram.

A business person “can create visibility for a brand while sitting in their house, and it can be in Austin, Texas. It could be in Nashville, it could be anywhere,” said Grunberg. She added, it doesn’t matter where they’re located so much as how many followers and “how much reach they can get.”

Thomaï Serdari, the academic director of New York University’s Luxury & Retail MBA program, agreed.

“There is intense fragmentation in terms of influence,” Serdari said. “This is what has allowed attention to shift away from NYC’s garment district.”

However, she added, “I simply refuse to believe that consumers’ taste will be satisfied by the generic influencer product for long.”

“Young people keep coming to New York and they don’t come for SBX or Crate & Barrel or for the weird IG influencer,” she said. “They come for the city itself, its dynamism and the New York hustle.”

Funari established her Funari NY in 2008, in the midst of the Great Recession, at age 27. She says the current crisis “is worse,” and that many fashion businesses were hurt by the pandemic, as well as by high taxes and other challenges related to import duties and the global supply chain.

“It kills me to hear about how many people are shutting down, not to open again,” she said, adding. “It’s so expensive.”

She declined to reveal how much her own business had declined, but said she feels the city has done little to address the problem.

Serdari agreed that the city needed to do more but said it was still possible to turn things around, arguing that it was contingent on city officials to spark a resurgence, along with the private sector.

“There is so much creative talent in the city!” said Serdari in an email. “The city (government) needs to think of how to keep these creatives engaged with the city when they are ready to launch.”