PROFIT

When asked what the fashion industry is to people, most relate just to the creative side of it and forget that this is one of the biggest industries in the world and, if ranked, would represent the seventh-largest economy (McKinsey,2017). It has many sides: marketing, design, retail, production, management, and social responsibilities… Even though fashion brands can love creating and producing, most of them are more focused on the profit they will make out of it. The growth of the fast fashion movement, aided by social media, is outpacing the growth of the sustainable fashion movement. Fashion consumers buy over 80 billion new pieces of clothing annually, making it profitable, over 400% more than what we consumed just two decades ago (fashion united, no date), making it profitable. As a side of the positive revenue, the environment suffers from overconsumption. (Henthorn, J., & Ulasewicz, C, 2015).

Before the 2020’s pandemic, the fashion industry’s global revenue was estimated between $1.7 trillion and $2.5 trillion ( fashion united, no date), and after, according to Euromonitor (2021), the global apparel and footwear market size shrunk in 2020 by -18.1% (to $1.45 trillion). Nevertheless, with that came changes in how brands produce and their selling methods; e-commerce was already rising before covid, but it had a significant boom, accounting for nearly 20% of retail sales worldwide. Nowadays, if the brand does not have an online selling platform, they are behind its competitors; most luxury companies see that they need it to adapt their ways of selling and communicating with their customers. With this increased exposure, companies can create new trends in short periods and sell more and more clothing. There are too many seasons and fashion shows to keep track of, and fast fashion retailers receive shipments of new styles daily. (Henthorn, J., & Ulasewicz, C, 2015) Brands have started changing their values to reach the audience and amplify by using social media platforms, being more sustainable and transparent because if they do not keep up, competitors will. Besides that, creative directors have to produce more daily collections rather than just statement pieces to sell. They are translating haute couture designers’ creations into wearable clothing. Nowadays, people want to relate to people, not big celebrities. That is why creating fashion is an exciting, challenging, and often risky business, but solid business models and operational work underpin this highly creative industry. (Grose, Virginia, 2021)

References:

Hethorn, J., & Ulasewicz, C. (Eds.). (2015). Chapter 9-Economic impact of textile and clothing recycling Pages: 204–230

Fashion united ( no date) Global fashion industry statistics. https://fashionunited.com/global-fashion-industry-statistics 

Fashion united (2021) Euromonitor https://fashionunited.com/companies/euromonitor-international

McKinsey (2021) State of Fashion 2022: An uneven recovery and new frontiers

www.mckinsey.com/industries/retail/our-insights/state-of-fashion

McKinsey (2017) State of Fashion 2017: An uneven recovery and new frontiers

www.mckinsey.com/~/media/McKinsey/Industries/Retail/Our%20Insights/The%20state%20of%20fashion/The-state-of-fashion-2017-McK-BoF-report.pdf

Grose, Virginia (2021) A Practical Guide to the Fashion Industry : Concept to Customer, http://ebookcentral.proquest.com/lib/ual/detail.action?docID=6934124.