Small businesses, and particularly those owned by people of color, have faced a multitude of challenges since the start of the pandemic and the resulting impact on store closures, supply chain ties and altered consumer demand.
And with the impact of inflation, these challenges don’t stop.
The latest US inflation rate reported by the Bureau of Labor Statistics in June was 9.1 percent, higher than it had been since the early 1980s.
A March Bank of America poll found that 88% of small business owners said inflation was affecting their business, 68% raised prices, and 34% had to reevaluate cash flow. and spending.
And just as communities of color tend to be most affected by the impact of inflation, businesses owned by people of color that may have less access to capital to cover some of the increased costs, as has historically been the case, may also be hit harder.
Here, WWD hears five fashion and beauty brands owned by people of color about how inflation is affecting their businesses.
Cuyana, a women’s clothing and accessories brand specializing in sustainable bags, had to raise its prices due to inflation, but company co-founder and CEO Karla Gallardo said customers remained in favor despite the hikes.
“Like most companies, Cuyana is not immune to the impact of inflation. The current climate has confronted us with challenges such as rising costs of our materials, manufacturing and transportation, ultimately leading to an increase in the price of our products. At the beginning of the pandemic, when these fluctuations were very unpredictable, we decided to accept the initial increases without affecting our suppliers and customers, “said Gallardo.
“With every decision, we try to take a longer-term view, realizing that our business works in symbiosis with the people at both ends of our supply chain. But as it became clearer that the price hike was going to stay, we realized it was unsustainable for our business to maintain this stance. We have shared this position openly and honestly with our clients. They responded with a wave of support, acknowledging that we would only take this step if absolutely necessary, “she said.
The folkloric group
The Folklore Group, a company that creates a global ecosystem where consumers can explore, connect and shop from African and diaspora-owned designer brands, echoes a different sentiment about inflation.
“There is an old saying that when whites get colds, blacks get pneumonia. I think this perfectly defines what is happening to black companies right now due to inflation. It is having an impact on the world, but it is particularly difficult for blacks and black companies that have already historically been deprived of access to economic opportunities, “said Amira Rasool, founder and CEO of The Folklore Group.
“As a company that relies on the services of other companies, we have seen price increases from some of our service providers that we did not expect. We are also a company that provides services to other small black-owned businesses that face the same inflation problems when it comes to shipping, fabric procurement, and other areas of manufacturing. Our success depends on our ability to help these brands be more successful and with inflation that has become a little 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 has caused the brand’s manufacturing and materials costs to rise.
“Effective solutions to improve mood, especially during turbulent times, remain a priority for our clients who have made self-care a ‘must have’. We are grateful that sales of our fragrance-focused wellness collection have not been negatively impacted so far and we expect it to continue as women prioritize wellness supplements with immediate impact, ”Jones said.
“However, we have certainly experienced an increase in the costs of raw materials, transportation and components due to inflation. We have chosen to absorb those costs rather than pass them on to our buyers and we have been able to do so thanks to a healthy mix of direct-to-consumer and wholesale distribution, ”he said.
Hanahana Beauty is a clean skin care and wellness brand dedicated to uplifting black women who have faced increased pressure due to the country’s economic situation.
“We have seen the direct effects of inflation when it comes to the procurement of packaging and ingredients, particularly when it comes to transport prices. For us as a brand, our main focus right now is how can we scale sustainably? So we are very diligent about how we spend our dollars … and what the result is, “said Abena Boamah-Acheampong, founder and CEO of Hanahana Beauty.
“But at the same time, we know our customers are affected, so we want to continue educating our community about the effects inflation has on Hanahana Beauty,” he said.
Monti Saunders, the founder of luxury beachwear and womenswear brand Riot Swim, along with members of the brand’s team, say that as the company continues to undergo changes due to inflation, they have learned to become more adaptable.
“In today’s inflation climate, not only has it impacted POC businesses, but all small business owners are seeing the impact of inflation. Small businesses think outside the box and look for various opportunities to expand further. While facing difficult challenges that have made entrepreneurs more adaptable during this time, there must now be a shift in focus on operational and strategic planning that could have a direct impact on customers, employees and company performance, “they said in a collective declaration to WWD.
“Customers’ shopping needs have changed with rising inflation and more and more people are focusing on purchasing essential items over clothing, shoes and beauty products. Inflation has also caused some companies to raise prices to support their business needs due to supply chain factors. POC entrepreneurs are constantly looking for alternative methods to further secure their business requirements and we hope to continue to pursue long-term goals even with rising interest rates and numerous other factors that inflation has affected. ” affirmed.