Profit
Profit is one of the fashion business pillars, relating mainly to the financial aspect of the fashion industry. The fashion industry is key contributor towards a healthy economy, ‘if it we’re ranked alongside individual countries GDP the global fashion industry would represent the seventh largest economy in the world’ (Fashion United, 2022). It’s difficult to measure the size of the fashion industry, particularly due to the fact how rapidly the industry changes, ‘about 7% of companies left the market entirely, either due to financial distress or because they we’re bought by rivals’ (McKinsey & Company,2021), along with ‘3,000billion textile and garment companies are entering the market daily’ (Vilaça, J.,2021)
There are multiple sectors within the fashion industry, such as manufacturing, distributing and retailing. Advancements on technology has enabled many start-up brands and new production cycles. For example, ‘mass-market players will begin to follow suit, aiming to respond more rapidly to trends and consumer demand. The result is likely to be a rise in just-in-time-production, reduced levels of overstock and an increase in the importance of small-batch production cycles’(McKinsey & Company,2021). Therefore, technology and shifting consumer needs has enabled quicker, more efficient production and developments in understanding consumer behaviour for the manufacturing sector of the fashion industry. However, ‘According to the Council for Textile Recycling (CTR), the average American throws away 70 pounds of apparel products per year’ (Hethorn and Ulasewicz, 2015), showing a linear waste economy when a circular economy is needed to be more sustainable and environmentally conscious.
The recent pandemic has created instability within the economy along with major problems for certain businesses, for example some brands we’re not able to remain competitive during these times and lost their spot in the industry, forcing them to close down such as Topshop. A brand can remain competitive in uncertain economic times by focusing on their existing customers and keeping their brand loyalty towards them, communicating with customers/clients regularly. ‘There are a ton of studies that show the higher cost of acquiring a new customer relative to nurturing a current relationship’ (Clausen, E. 2020).
Creative directors bridge the gap between creativity and commerce through fashion shows/ exhibitions. For example, the Moschino spring/summer 2021 show, Jeremy Scott, the creative director fitted miniature dresses on mannequins 2 feet tall ‘the exhibition featured 237 looks, opening at The Louvre in Pairs and raising millions of francs for war relief’, showing by being creative and doing something unique can increase a brands profit or in the case of this show raise more money. ‘The exhibit eventually went on to tour the world and is currently part of the Maryhill museum of arts collection’ (Meyer, M. 2022).
Reference list
Amed, I., Balchandani, A., Beltrami, M., Berg, A., Hedrich, S. and Rölkens, F. (2019). Fashion on demand. [online] McKinsey & Company. Available at: https://www.mckinsey.com/industries/retail/our-insights/fashion-on-demand.
Clausen, E. (2020). Council Post: Marketing Rules To Follow During Uncertain Economic Times. [online] Forbes. Available at: https://www.forbes.com/sites/forbesagencycouncil/2020/04/03/marketing-rules-to-follow-during-uncertain-economic-times/?sh=75e463a4a36e [Accessed 24 Oct. 2022].
Fashion United (2022). Global Fashion Industry Statistics. [online] fashionunited.com. Available at: https://fashionunited.com/global-fashion-industry-statistics.
Hethorn, J. and Ulasewicz, C. (2015). Sustainable fashion : what’s next? : a conversation about issues, practices and possibilities. New York: Bloomsbury, Fairchild Books, An Imprint Of Bloomsbury Publishing Inc.
McKinsey & Company (2021). The State of Fashion 2022: In search of promise in perilous times | McKinsey. [online] McKinsey. Available at: https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion.
Meyer, M. (2022). 29 BEST Fashion Shows Of All Times (Up To 2022). [online] the VOU. Available at: https://thevou.com/fashion/fashion-shows/#moschino-2021 [Accessed 24 Oct. 2022].
Vilaça, J. (2021). Fashion Industry Statistics: The 4th Biggest Sector Is More Than Clothing. [online] Fashinnovation. Available at: https://fashinnovation.nyc/fashion-industry-statistics/.