Profit

The pillar, Profit, is understood in the Fashion Business Context as a firm’s goal to maximise financial gain, and therefore boost the brands market share in the fashion industry. Profits can either be reinvested into the business, distributed amongst shareholders, or retained by the owner (Kenton, 2022). 

As stated in McKinsey’s 2016 Report, “fashion is one of the world’s most important industries, driving a significant part of the global economy”. The revenue in the apparel market, including women’s, men’s, and children’s apparel, amounts to £1.14tn in 2022 and is expected to show a volume growth of 10.4% in 2023 (Statista, 2022).  Online shopping is an increasingly prevalent sector of the industry, with an overall market value of 668 billion US dollars in 2021, and an expected value of 1.2 trillion USD by 2025 (Statista, 2022).

Women’s apparel generates over 133 billion USD more than men’s or children’s apparel markets (Statista, 2022). As consumer’s interest in fast fashion increases, Zara, H&M and Uniqlo hold the largest global market share, and 95% of sales in the apparel market are attributable to non-luxury garments (Statista, 2022). The second-hand apparel industry is expected to grow to a value of 218 billion US dollars in 2026, due to increased demand from environmentally conscious younger consumers (Smith, 2022).

Following the COVID-19 pandemic, brands have amplified their focus on how to remain competitive during uncertain economic times. Brands should ensure flexibility and faster decision making in all areas of their operating models to accommodate to disrupted consumer behaviour. Strategic digital adoption is a necessary tool for brands, as young consumers are demanding sophisticated digital interactions that integrate the “human touch” (Amed & Berg, 2021). As 57.7% of the emerging generations in 2022 are concerned with sustainability and ethics (Moran, 2022), brands can utilise social media to “communicate their social and environmental endeavours” (Peterson, 2015) and ensure brand consistency during uncertain times (Clausen, 2020).

Traditionally, creative directors bridged the gap between creativity and commerce by embodying an artistic persona that was “not ordinary”, and thus elevating the value of their designs through elitism (Wolff, 1993), as evident in Charles Frederick Worth’s presentation of himself as an eccentric artist. Former Creative Director of Off-White, Virgil Abloh, tapped into a “certain demographic’s sense of culture and credibility” (Ahmed, 2013) by using “artification” to elevate streetwear products, such as Nike sneakers, as seen in Figure 1, into objects of exclusivity (Crane, 2019). However, the growing accessibility to both fashion (De Souza Crook, 2018) and cultural and social capital (Crane, 2019) has increasingly transformed people into artists, due to the blurring of ideas and knowledge (Crane, 2019).

RESOURCES

Ahmed, A. (2013) Bridging the gap between art and business, The Guardian. Guardian Media Group. Available at: https://www.theguardian.com/media-network/media-network-blog/2013/oct/16/bridging-gap-art-business (Accessed: October 27, 2022).

Amed, I. and Berg, A. (2021) The State of Fashion 2021 report: Finding promise in perilous times, The Business of Fashion. Bloomsbury Publishing. Available at: https://www.businessoffashion.com/reports/news-analysis/the-state-of-fashion-2021-industry-report-bof-mckinsey/ (Accessed: October 27, 2022).

Amed, I. et al. (2016) The State of Fashion 2017 , McKinsey & Co. Bloomsbury Publishing. Available at: https://www.mckinsey.com/~/media/McKinsey/Industries/Retail/Our%20Insights/The%20state%20of%20fashion/The-state-of-fashion-2017-McK-BoF-report.pdf (Accessed: October 27, 2022).

Clausen, E. (2020) Council post: Marketing rules to follow during Uncertain Economic Times, Forbes. Forbes, Inc. Available at: https://www.forbes.com/sites/forbesagencycouncil/2020/04/03/marketing-rules-to-follow-during-uncertain-economic-times/?sh=55f65d204a36 (Accessed: October 26, 2022).

Crane, D. (2019) “Fashion and artification in the French luxury fashion industry,” Cultural Sociology, 13(3), pp. 293–304. Available at: https://doi.org/10.1177/1749975519853667.

De Souza Crook, J. (2018) Compelling Fashion Business: Bridging The Divide Between Creative Vision And Commercial Reality, London College of Fashion. UAL. Available at: https://www.arts.ac.uk/colleges/london-college-of-fashion (Accessed: October 27, 2022).

Kenton, W. (2022) Profit definition plus gross, operating, and net profit explained, Investopedia. Investopedia. Available at: https://www.investopedia.com/terms/p/profit.asp (Accessed: October 27, 2022).

Moran, G. (2022) Gen Z and millennials 2022 report, Drapers. Ascential. Available at: https://www.drapersonline.com/insight/drapers-bespoke/gen-z-and-millennials-2022-report (Accessed: October 16, 2022).

Smith, P. (2022) Secondhand apparel market value worldwide 2021-2026, Statista. Ströer Media. Available at: https://www.statista.com/statistics/826162/apparel-resale-market-value-worldwide/ (Accessed: October 27, 2022).

Statista (2022) Apparel – worldwide: Statista market forecast, Statista. Ströer Media. Available at: https://www.statista.com/outlook/cmo/apparel/worldwide?currency=GBP (Accessed: October 27, 2022).

Statista (2022) Global fashion e-commerce market value 2025, Statista. Ströer Media. Available at: https://www.statista.com/statistics/1298198/market-value-fashion-ecommerce-global/ (Accessed: October 27, 2022).

Peterson, D. (2015) “Social Media as a Tool for Social Change,” in Sustainable fashion what’s next?: A conversation about issues, practices and possibilities. London: Bloomsbury Publishing Inc, pp. 76-99. Available at: https://www-bloomsburyfashioncentral-com.arts.idm.oclc.org/encyclopedia-chapter?docid=b-9781501312250&tocid=b-9781501312250-chapter4&pdfid=9781501312250.ch-004.pdf (Accessed: October 26, 2022).

Welty, M. (2022) Ranking all of the off-white X nike sneakers by Virgil Abloh, Complex. Complex Media, Inc. Available at: https://www.complex.com/sneakers/ranking-off-white-nike-sneakers-worst-to-best/ (Accessed: October 27, 2022).

Wolff, J. (1993) “Social Structure and Artistic Creativity,” in The Social Production of Art. London: Palgrave, p. 11. Available at: https://link.springer.com/chapter/10.1007/978-1-349-23041-9_2#citeas (Accessed: October 27, 2022).