Lebanon’s Fashion Industry Is Suffering a Triple Hit — But It Is Still Alive and Hopeful
Last week we were all heartbroken by the terrible explosion in the capital of Lebanon, Beirut. The explosion killed over 200 people so far, injured over 6,000 and left more than 300,000 homeless. Insane videos of the explosion were shared all over social media, showing the destruction left behind the blast. I quickly contacted the Lebanese people I knew to see if everything was ok with them and their families — and it happily was. But this tragic event left many scars in the city and its people. I come from Brazil, the country that received the largest diaspora of Lebanese. I grew up surrounded by people from Lebanese origins and by the Lebanese culture, and it’s hard to don’t get touched by this incident. The catastrophe hurt so many people from this country that spread its rich culture so much around the world.
The spread of Lebanon’s culture also happened in the fashion industry. Lebanon has many successful fashion brands, especially in luxury. Elie Saab, Zuhair Murad, and Reem Acra are only some of the brands from Lebanon that are known worldwide. Unfortunately, they were all somehow impacted by the explosion. But the sad event was already the third hit their businesses went through in the last months. A lot has been going on in Lebanon and now, more than ever, many Lebanese brands are in survival mode and depending on international sales and support. But what exactly is happening in Lebanon and how the explosion made it worse? I will bring my International Relations Graduate past to try to answer these questions and explain how the fashion industry there is facing the many challenges of 2020. I also received a more than special help from Amani Saab, a Lebanese fashion designer that gave her perspective on everything that has been going on.
Why Is Lebanon So Relevant In the Fashion Industry?
Lebanese sense of style is a result of centuries of cultural exchanges between the Arab, Hellenic, Roman, Ottoman, and Western civilizations. The capital of Lebanon, Beirut, has long been a creative hub in the Middle East. With a long post-colonial relationship with Paris, the city was already nicknamed as the “Paris of the Middle East”. Middle Eastern aesthetic is known for extravagance and intricate details, which translate perfectly into status — which makes Lebanon the perfect place for luxury. This mix of cultures and references, especially French and Middle Eastern, allowed Lebanon to built a unique fashion scene, dominated by the Haute Couture spirit and aesthetic. From this context, Beirut became a fashion capital with a deep culture of community-generated skills and amusing imagination. Nowadays, Lebanon concentrates many super-elevated haute couture houses, fine jewellery brands and a new avant-garde generation of designers. The fashion designer Amani Saab described the success of the Lebanese fashion industry as a result of the country’s skilled labour, as she stated:
“Our families have carried skills that have been passed from generation to generation like embroidery making and needlework. I have huge respect for the Lebanese designers that invested in their own country and employed their own people to keep the industry in Lebanon strong in such a globalized world.”
Some of the most well know fashion names of Lebanon are Elie Saab, Zuhair Murad, Tony Ward, and many others. Lebanese designers and brands are constantly seen dressing celebrities at high profile events such as the Met Gala and the Oscars. Many also have their catwalk shows at the Paris and Newyork Fashion Weeks, and Haute Couture Fashion Week. Lebanese designs, like the country itself, have a smooth ability to fit East and Western cultures. The country also has an openness to change and to the new, that were built throughout its many political changes. All these factors, mixed with the natural entrepreneurial and innovative spirit of Lebanon, made the country a reference of excellence and success in the fashion industry.
The Political and Economic Scenario in Lebanon
To understand where the Lebanese fashion industry stands now, it’s important to understand what happened to the country in the last years. With a very complicated political and economic environment, it’s impossible to just jump to Lebanon’s 2020 scenario without contextualizing it and understanding how the country got to where it is. So let’s go.
It all starts in 1997, when the Central Bank of Lebanon fixed the Lebanese Lira to the US Dollar at 1507 to 1. Over the last two decades, the stability of the Lebanese economy depended on this fixed exchange to the US Dollar. Lebanon is a mostly service-based economy, which is extremely dependent on tourism that is usually done in US Dollars. Lebanon also didn’t manage to develop self-sustaining domestic industries, importing 80% of its products. US currency enters Lebanon through tourism, foreign aid, remittances, and loans. Then, Lebanon spends those dollars to purchase supplies across borders. The currency stability also encouraged expats to continue to send money home, buy properties, or even deposit cash in local banks, which keep the economy afloat. This whole dollarization of the country contributed to the wealth divide in the country, making Lebanon one of the most unequal nations in the world.
The whole dollar-based structure in Lebanon started to crumble when the conflicts in neighbour country Syria began. To maintain the Lira stable and incentivise deposits, banks offered interest rates as high as 14%, which then demanded more deposits to pay the high-interest rates — which was basically a Ponzi Scheme. It took some time for the scheme to be discovered. However, in 2019, the pressure on the Lira-Dollar fixed values started to suffer more pressure. The Central Bank of Lebanon started demanding that all money transfer offices pay cash out in Lira rather than Dollars.
Over the next months of 2019, the demand for US Dollar kept rising and soon a black market of Dollars surged in the country, selling the US currency for higher than 1507 Liras. Other hits to the economy such as the downgrade of Lebanon’s credit rate and the Jammal Trust Bank closure due to US sanctions for allegedly being involved with the terrorist group Hezbollah affected Lebanon’s unstable scenario even further. At this point, the country was already printing more Lira, even if still unnoticed. With the Dollar black market and the printing of Lira, inflation in Lebanon started to rise, but still in not very alarming rates.
Finally, in 17 October protests exploded around the country after the government tried to tax WhatsApp phone calls. This was considered the last drop for the population that, by then, was mostly living in poverty and angry with the government’s corruption. Peaceful protests continued, with current the Lebanese Prime Minister resigning from his position. Eventually, the protests were interrupted by the first major hit to Lebanon’s economy: the Covid-19 pandemic.
First Hit: The Covid-19 Pandemic
For Lebanon, the Covid-19 outbreak represented an even further increase in poverty, fewer job prospects, and a shortage of fuel which resulted in blackouts up to four days a week. On top of that, without enough dollars to import grains and meat, the country started facing famine.
Surprisingly, even though Lebanon was already struggling economically before the pandemic, the country’s fashion industry was still thriving at the beginning of 2020. Unfortunately, the Covid-19 pandemic changed this scenario, affecting the domestic fashion market due to the closure of retail, and international due to the fact that ateliers had to stop production. The Lebanese designer Salim Azzam, the joint winner of Fashion Trust Arabia’s womenswear inaugural ready-to-wear prize in 2019, stated to Business of Fashion that during the Covid-19 outbreak and lockdown “No one was shopping. We had almost zero sales locally, and were relying on abroad, (…) We were barely surviving.” The problem was that even the international fashion market was going through a rough period with stores being closed all over the world and fashion weeks going digital.
But Lebanese designers were trying to keep their heads up. At the beginning of July, the haute couture and ready-to-wear designer Georges Hobeika shared with Refinery29 his approach to these difficult times. “The Lebanese people have always been optimistic, no matter the situation or dire circumstance, and we thrive on challenges,” he stated. And they were indeed doing everything they could to keep business as usual. Elie Saab, Georges Hobeika, and Maison Rabih presented their collections during the digital Haute Couture Fashion Week in July. Georges Chakra and Azzi, and Osta premiered their collections later due to the closure of the ateliers during the lockdown, but with the same optimism. “We are now back at work with the hope and resilience that characterizes us as Lebanese people,” stated Chakra.
Some had to get more creative to keep business running and profiting during Covid-19 times. The designer Tony Ward, who is known for his embroidery, craftsmanship, and sustainable efforts in couture, shifted from an atelier of couture to producing bed sheets and medical protective suits for hospitals. Ward recognized the tough times, but said he be sure the Lebanese couture would survive through its craftsmanship. He stated:
“We live in an unstable country, and this has been the case for as long as I can remember. But this time it’s a different kind of challenge, and I constantly aim to be creative at finding solutions.”
Indeed Covid-19 affected the fashion industry that was still living in a parallel reality to the country’s economy. But unfortunately, the situation was going t get worse. If at the beginning of the pandemic Lebanon’s inflation was already bad, the financial impact of lockdown measures in the country and across the globe was the last push to make it go out of control. And was exactly this that became the second major hit to Lebanon’s economy: the hyperinflation.
Second Hit: The Hyperinflation
As Lebanon’s economic struggles continued and worsened with coronavirus, those holding the Lira currency ran to buy dollars. This drove the black market exchange rate as high as 10,000 Lira per dollar, an 85% devaluation of the currency. First banks began to limit withdrawals of US dollars to $300, soon to none at all. Merchants started to not accept payments by card, afraid of bank instability. Then, when Lebanon was finally leaving the Covid-19 lockdown, the inflation bomb exploded.
In June this year, Lebanon became the first country in the Middle East and North Africa to experience a phenomenon called hyperinflation. This happens when a country’s inflation rate exceeds 50% per month over a period of time, which for some specialists is 30 consecutive days. Lebanon is now living an annual inflation rate of 462%. With Lebanon, there were only 62 cases of hyperinflation in history. Besides Lebanon, the only other country that is currently living hyperinflation is Venezuela, with an annual inflation rate of 2,219%.
Steve H. Hanke, Professor of Applied Economics at the Johns Hopkins University and an expert on the topic, explained in an article of Reuters how inflations get to the level Lebanon is experiencing:
“The underlying causes of inflation are always the same. Governments start running larger and larger fiscal deficits and call on the central bank to fund those deficits because tax and bond financing avenues are inadequate. In hyperinflations, central banks are required to virtually fund the governments entire fiscal operations.”
In simpler words, governments run out of money for some reason, so the central bank starts lending them money to make the ends meet (a.k.a printing money), because the other money-collecting ways are not viable, for some reason. Eventually, the country can just pay its expenses if the central bank keeps printing more money, which makes the local currency drastically lose its value. And there you go — you have hyperinflation.
That’s exactly what happened to Lebanon. As explained, the conflicts in Syria made Lebanon’s economy become less stable and banks made bad decisions. Afraid of how the economic instability could affect the local currency, the Central Bank limited the circulation of dollars and printed money to keep the economy running, which ended up devaluating the local currency Lira in a country that is extremely dependent on the US Dollar. In a hyperinflation economy, prices of products can rise more than once a day, making everyday life a nightmare for consumers and merchants.
For the fashion industry, this was a major hit. Amine Jreissati, the founder and creative director of the genderless fashion brand Boyfriend, shared with BoF that the inflation was suffocating his business due to the country’s restriction of cash withdrawals and the devaluation of Lira. As he said:
“For me to produce a shirt used to cost $40, including fabric. Now, it’s costing me $300, so I have to sell it for 1.5 million Lebanese Pounds [US$1,000] and who’s going to want to buy something for [that price]?”
The hyperinflation not only made Lebanon’s domestic fashion market become almost inexistent, but it also made the production, exportation, and other costs higher for brands. This placed Lebanese fashion players in a very delicate situation, but as usual, they were still hopeful for better days. And then the third major hit in Lebanon’s economy and lives came: the explosion.
Third Hit: The Explosion
If Lebanon was not already going through enough, on 4 August, two immense explosions happened at the port of Beirut. The first explosion damaged the port, the second was way larger. The second blast’s effects spread up to a 10km radius from the port, breaking windows, destroying buildings, killing hundreds, injuring thousands, and displacing hundreds of thousands of people. The complex cause of the explosion, which involved a Russian ship, ammonium, and Lebanon’s government, resulted in the resignation of the country’s prime minister. The explosion was the last hit suffered by the country, which left Lebanon with a political, economic, and humanitarian crisis.
Politics aside, the blast punched hard the already hurt economy of the country. Around the port, where the explosion took place, everything was damaged or even destroyed. Not far from the port was Beirut’s fashion district, the Gemmayzeh neighbourhood, where some of Lebanon’s main brands have their ateliers and headquarters. Unfortunately, as everything that was around the port, part of the fashion district was devastated by the explosion. Amine Jreissati, who had his showroom affected by the blast, shared his experience with BoF:
“There was no showroom anymore. The entire façade of the showroom got shoved to the back and it took everything on its way. If I was there, I would have died.”
The designer was taken in an ambulance and got stitches to his head. Three-quarters of the stock of Jreissati’s brand Boyfriend was ruined by the blast. Zuhair Murad’s 11-story headquarters was also completely destroyed by the explosion. Fortunately, the 200-people staff left the building 10 minutes before the second destructive blast and the designer addressed at his Instagram that everyone is well. The couturier made an emotional statement about the tragic result of his workspace that made him share tears:
“We lost everything, all my memories. (…) It was my dream to build my fashion house in Beirut, in my city, in Lebanon where I was born but in one second everything went and I lost everything.”
80% of Murad’s 20 years archive was lost, along with client’s pieces and bridal gowns. Other designers such as Rabih Kayrouz, Salim Azzam, Roni Helou, Elie Saab and Andrea Wazen had their ateliers, stores and inventories affected by the explosion. Azzam even addressed how his business was already “on its knees…before the explosion”, now, after it happened, he shared how he is feeling:
“Now I don’t know what’s going to happen; we’ve kind of forgotten that we have businesses and fashion, and we are just focusing on doing what we can do to clean up and help.”
The designer Rabih Kayrouz suffered serious injuries from the incident, “a small brain haemorrhage, two clots and 22 stitches”, as he stated on Instagram. But between all the tragedies the explosion brought to the fashion industry in Lebanon, the death of the jewellery designer Hala Taya was the saddest one. In her website, a tribute to her was made with the following text:
“Hala Taya jewels became known for its major creation ‘Keep Lebanon Close to your Heart’, a masterpiece representing… patriotism, an act of donation, and above all, the tribute of a designer to the nation of Lebanon.”
The explosion was the last drop of many other economic and political problems and this is no news for Lebanon, a country that has been through many wars, the last one being less than 15 years ago. These conflicts were the main cause of the diaspora of the country, which has a larger population abroad than in its territory. This sentiment was shared by Amani Saab, who is the third generation in her family that will leave Lebanon for a better future.
“They took our savings from the banks that blocked our money, they took our basic rights of electricity and water, they took our spending power because of the inflation and now they took our homes, the only safe space we had”, she stated.
Lebanese People Are Still Standing Strong
Among so much tragedy from this sequence of events that shaken Lebanon, perhaps some of the greatest and most admirable qualities of this country resurged: hope, optimism, resilience and compassion. As a population that has lived through many phases of conflict and unpredictability, Lebanese developed a collective character. As Vogue perfectly described, Lebanese people are always “seizing the day, being self-reliant, and looking out for each other in the absence of a government which can be trusted”. This Lebanese trait was definitely seen in many interviews given by fashion professionals affected by the many events. Elie Saab had its headquarters and studio damaged by the explosion, while the staff managed to scape, happily with minor injures. The business will be closed until 17 August for repairs. Despite this tragic scenario, Elie Saab Junior, the CEO of his father’s company, shared words full of optimism, strength and pride of Lebanon:
“By then [17 August] we will have reorganised ourselves, fixed the damage to the building and go on. What happened around us is difficult to absorb but it is in our DNA to go on no matter what. Our first choice is to remain in the country, to remain close to our people and to drive our mission from here.”
Saab added that “when it comes to work ethics, when it comes to people that are driven, resilient and can drive their ideas and be part of an organisation, I advise to look at Lebanese talent.” Elie Saab Junior recognizes that going back to where the economy was before these three hits will take time. There are priorities for Lebanon that come before rebuilding the fashion industry, but the CEO assured that they will find a way, as they always did.
Rabih Kayrouz also brought words of determination and hope at his Instagram, among a message to the government’s actions that caused the explosion: “We will not forget. We will judge. We will rebuild… And we will dance!”. The Lebanese-Italian designer Tony Ward also shared words of resilience: “Praying for Beirut, our beloved city, so that once again it rises from the ashes,”. Amani Saab also said that she sees a “willingness of the Lebanese people to help others to work together because, in the end, we realize that we only have each other”. The designer Salim Azzam managed to see a good side of what looks like the worse calamity possible for his country:
“Everybody is here [helping]. Lebanese people are really well known for this. It’s taken our generation back to a war-time we never knew. But honestly, just seeing everyone together has been a boost to the soul.”
Indeed, many agree that between everything that has been going on, at least the union and compassion of Lebanese people with each other is keeping them hopeful and giving them the strength to rebuild their buildings, businesses, lives and country. Lamentably, they can’t do that alone. The economic descent of Lebanon this summer has been rapid and brutal and the catastrophe at the port made it even worse. Even before, there was famine, energy cuts and the government was not being able to afford the most basic needs. Now, dealing with the situation became even harder. As Azzam stated to Vogue:
“The only promise of hope is that we can rely on international markets, because no one is able to buy here now. It is really important to all of us for the eyes of the world to keep watching. What we all do is more than making clothes — we want to share the beauty of this country and all its creativity. That is the hope we need to keep going.”
The designer Roni Helou also talked to BoF about the importance of receiving help right now, as he explained that Lebanon can’t afford to rebuild itself alone: “A lot of us can’t just stand back on our feet without the support of other people. It sucks that we’re in this position but if people don’t help us we might never be able to recover.”
International aid is already being offered and further support is being planned by countries such as Brazil, the UK, Russian, Canada and many others. The international support will be essential when rebuilding Lebanon, but the help will probably come with conditions of political reform.
We, as people that got moved by everything that happened to this country, can also help. Check below the many trustable organizations to which you can donate to help Beirut and Lebanon to stand up again. You can also support Lebanese fashion brands by simply checking what they have. Not everyone can purchase luxury products, which is the majority of fashion that comes from Lebanon. But if you can, you will be doing much more than just buying something, you will be supporting a start over for a country that needs help.
Lebanon has overcome so many challenges with their resilience, compassion and optimism. Now, these qualities are being tested again and I truly wish Lebanese people will manage to overcome it one more time. As the designers of Azzi & Osta shared on their Instagram: “Our collective support will help us rebuild again. Hope and resilience will always prevail.” Amani Saab also shared she sees light at the end of the tunnel for Lebanon’s fashion industry:
“Designers will need to rebuild years of hard work to come back from this tragedy. It will take time to recover but Lebanon has been able to be a hub for luxury fashion even in times of war, so I’m positive that with the help and support of each other we will build each other up to move forward.”
How to Help:
There many trustful organisations offering support to Lebanon at this moment and to which you can donate. Check some below:
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