Afterpay exits the runway, leaving designers in fashion week limbo

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Some Australian brands say they may have to reassess their participation in Fashion Week following Afterpay’s decision to withdraw its support for the event.

The buy-now-pay-later company signed a three-year deal, reportedly worth several million dollars, in 2020 for the naming rights of the country’s premiere industry fashion week, held in Sydney each May. At the time, Afterpay co-founder Nick Molnar told the Australian Financial Review the sponsorship arrangement was ongoing. “I have a lot of love for the fashion industry here,” he said.

Bondi Born founder Dale McCarthy (centre) says the brand will continue to show at Australian Fashion Week, major sponsor or not.Credit: Louise Kennerley

But that love appears to have waned, with Afterpay deciding not to renew its support of the event, while also withdrawing from fashion weeks in New York and London.

“Our objectives for [Australian Fashion Week] were to make an impactful contribution to the industry and its landmark event following the devastating impact of COVID-19,” said Katrina Konstas, Afterpay’s country manager for Australia.

According to Konstas, Afterpay’s support of Australian fashion would continue through its work with the Australian Fashion Council and the Australian Retailers Association.

A person with knowledge of the deal, who was not authorised to speak publicly, said the decision was also reflective of Afterpay’s desire to somewhat divest from being a “fashion brand”, as consumer spending patterns changed in a tighter economy.

Partners no more: Afterpay co-founder and CEO Nick Molnar and IMG’s Natalie Xenita at the sponsorship announcement in 2020.Credit: Lee Oliviera

Several industry figures who have worked on major events partnerships estimated the Afterpay deal to be worth seven figures annually, which leaves event owner IMG scrambling to find a replacement for 2024, and designers unsure what it means for their ability to stage a runway show, which can cost upwards of $50,000, even for a modest parade.

Under Afterpay’s sponsorship, designer fees of about $20,000 – covering everything from lighting to front-of-house staff – were waived, making the event more accessible for smaller brands.

But at least one brand representative, who spoke on condition of anonymity, said small designers may find the costs insurmountable, forcing them to stage smaller events or press pause on events altogether. “It might deter a lot of emerging designers,” she said.

Still, most designers contacted agreed that despite the outlay, fashion week offers a money-can’t-buy marketing opportunity, as well as tangible results for wholesale accounts, including international exports, and new customers who come through media coverage and social channels.

Dale McCarthy, founder of swimwear and resort label Bondi Born, said it was disappointing that Afterpay was moving on, as the company had brought a “freshness to how the event was executed” but that “the event stands on its own two legs”.

“I’m sure the event will find a new partner,” she said. “It won’t impact our decision to show … There’s no other single form of marketing I can do in a year that can replace this.”

In a statement, Natalie Xenita, vice president and managing director of IMG Fashion Events and Properties Asia Pacific, said the New York-based owners of Australian Fashion Week were committed to the event for 2024 and beyond.

“Afterpay joined Australian Fashion Week as title sponsor at an immensely challenging time for the fashion industry,” Xenita said. “Their support enabled us to continue providing designers with a global trade and consumer marketing platform during the pandemic.”

No replacement sponsor has been announced. Previously, Australian Fashion Week had been sponsored by Mercedes-Benz and Rosemount Wines.

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