New York Fashion Week returned to Manhattan this week with a full calendar of IRL runway shows, coming back from last year’s array of “phygital” livestreams, lookbooks and gift boxes that was, by consensus, a depressing business flop.
The glitzy event is back on its feet with the help of a notable new sponsor: Australian buy-now-pay-later app Afterpay, one of a new wave of fintech companies that let customers pay for purchases in installments. Afterpay footed the bill for 11 shows this year, including Rodarte, Proenza Schouler, Brandon Maxwell, Altuzarra and Telfar. This funding came via a new initiative called the IMG Fashion Alliance, co-created by Afterpay and IMG, the management company and modeling agency that helps organize NYFW. The multi-year deal locks in Afterpay as the official sponsor of NYFW 2022 as well, and commits the company to providing designers with support for another year.
Paying designers to put on their runway shows might seem like an unusual business move. But it wasn’t clear that NYFW would return after the pandemic at all. The events’ caché has been waning for years, long before Covid-19 forced it to temporarily go virtual. The spectacle has come under fire for everything from diversity-related issues to the hundreds of thousands of tons of carbon emitted by the lavish parties and via international travel to the event. “Fashion week is wasteful, exhausting and disorganized,” declared Fashionista last year, while New York Magazine decried: “Fashion week is simply not sustainable.”
However, one of the biggest complaints about fashion week is simply that it’s divorced from the way people actually shop. Fashion weeks are not actually retail events: they’re pricey (shows cost between $125,000 and $300,000 to put on), long-lead marketing and brand awareness campaigns, with a six month gap between when clothes appear on the runway and go up for sale. Clothes for spring and summer are shown as in September (next week’s events are for “Spring-Summer 2022”) while winter clothes are showcased as the cold is letting up in February. This confusing, overly-precious, drawn-out structure feels outdated in the era of shopping on Instagram, the “drop culture” of streetwear brands like Supreme, and fast fashion. It quite literally is archaic: the fashion calendar is based on the 17th century textile industry’s production schedule.
As such, Afterpay’s sponsorship is more than just a financial life raft for NYFW. It reflects an attempt by the event to get in touch with modern retail and to cater to consumers. Buy-now-pay-later is one of the trendiest sectors of retail, since apps like Afterpay, Klarna, Affirm and Zip (formerly Quadpay) infiltrated e-commerce during the pandemic. Nearly 60% of American consumers have now used layaway apps, which have been called “the bank of Gen-Z,” given young people’s preference for these plans over credit cards.
Lately, Afterpay has been breaking away from the pack. The top layaway app in Australia, Afterpay was founded in Bondi in 2014. This year, it was purchased by Square for $29 billion, putting the company’s valuation ahead of their biggest rival, San Francisco-based Affirm, which IPO’d at $24 billion in January. When it comes to popularity, Afterpay has racked up 657,000 Apple Store reviews, second only to Affirm. It is nearly neck-and-neck with Klarna when it comes to Facebook likes, boasting a following of 171,000 compared to the Swedish company’s 175,000.
Beyond lending its clout and its checkbook, Afterpay is helping make NYFW more shoppable. It will host "activations" that will translate into payments via their platform and sales for designers, including "buy now, pay later" shows for designers LaQuan Smith, Maison Kitsune and Altuzarra. These brands are abandoning the calendar and offering their new wares for purchase instantly on Afterpay’s hub. Afterpay will also host NYFW-adjacent pop-ups in Times Square and New York’s Meatpacking district, that will exclusively “drop” new items like Bretman Rock’s new Crocs, a JD Sports x Glassface NFT and offer sales from brands like Steve Madden and Mac.
Beyond NYFW, Afterpay seems to be gunning to become the preferred buy-now-pay-later app of luxury fashion. Earlier this summer, Afterpay hosted Australian Fashion Week. The company also has also signed a two-year-deal with the British Fashion Council, to be the principal partner of London Fashion Week for 2021 and 2022, and to launch a design collective. According to a statement, Afterpay will “integrate inclusive shoppable moments and dynamic interactive concepts, bringing the best of the British fashion industry to a wider group of consumers.”
Buy-now-pay-later and luxury fashion have the potential to be symbiotic partners. Year-round, layaway apps like Afterpay can make designer goods more appealing to middle-market customers, who can’t drop $1,500 on a purse all at once. Making luxury goods more “accessible” can be a slippery slope, since buy-now-pay-later apps tend to jack up peoples’ spending, leading to a slew of criticisms that these companies make it too easy for young and lower-income shoppers to rack up debt and late fees. According to shopping data firm Cardify, 49% of people say they spend more using buy-now-pay-later plans than they would even on a credit card.
There is an increasing high-income market using apps like Afterpay, though layaway plans are traditionally the territory of cash-poor customers. “Our data suggests that growth is coming from higher income groups and used to buy luxury items you otherwise would not purchase,” Derrick Fung, CEO of Cardify, told WWD. “It’s seemingly not a tool for debt constrained consumers but rather a flexible, sustainable payment method that may encourage consumers to take the plunge on that aspirational purchase.”
It’s not yet clear if Afterpay’s investments in fashion week will pay off, translating into their logos proliferation on the checkout pages of luxury brands. Despite the natural pairing of pricey clothes and layaway apps, only a few designers have gotten on board with BNPL apps so far (Affirm is the official layaway partner of Gucci). There’s no question NYFW wants to modernize but it seems possible the bad press piling up related to buy-now-pay-later’s consumer debt and the mass spirit of layaway apps will chafe the elite culture of high fashion houses. The payoff of Afterpay’s investments may rest on how much buzz they bring to next week’s events — and the sales numbers of the brands who are trying out “buy now, pay later” runway shows.