Profit
‘Profit’ considers the financial aspects of the fashion industry. In the UK the “Fashion industry is worth £26 billion” and it provides “800,000 jobs to the economy” (The British Council, 2016). This makes the fashion industry the largest creative industry in the UK. Not only does the UK Fashion Industry thrive in business but it also hosts six of the world’s 20 leading fashion universities (The British Council, 2016) making it the world leader in fashion education. While global fashion brands can appear to prioritise other aspects of business, such as ethics, for the majority their main priority is profit. They aim to maintain a large profit margin, and keep costs low while maintaining their brands level of quality.
The most successful sector, financially, within the fashion market is the luxury sector. Luxury brands appeal to both high end consumers and high street consumers. For items ‘straight from the runway’ high end consumers may spend up to thousands of dollars, but for high street consumers it is more in the range of hundreds. They may purchase smaller pieces from the designer collections including accessories like sunglasses, bags and costume jewellery. In this way luxury brands can appeal to a wide audience while maintaining their prestigious reputations. The conglomerate LVMH, Louis Vuitton Moët Hennessy, has a “$194 billion market value and assets exceeding $108 billion, making it the 73rd largest public company in the world” (Forbes, 2020) dominates the luxury market. They own 75 prestigious brands including Louis Vuitton, Christian Dior, Givenchy and Fendi.
During times of economic crisis and instability, it can be difficult for businesses to maintain sufficient levels of profit. When interest rates are high and consumers restrict their spending, brands can face huge declines in sales and find themselves having to use different pricing strategies. This makes brand competitiveness harder to achieve during a declining economy because costs still have to be covered in the price while offering a better price than competing brands.
In the current social climate, there is an emphasis on creativity and commerce. Art is now widely accessible and creativity is of great importance to many consumers. Some may argue that fashion is art in itself and consumers want to feel this in the buying process. Selfridges is an upscale department store on Oxford Street, London who have embraced this concept and bridged the gap between creativity and commerce by immersing art into their store experience. They claim to ‘balance the consumption of goods with the consumption of culture” by allowing customers to experience art first-hand.
Reference List:
Bloomberg (2021) Bernard Arnault Places $538 Million Bet on Booming LVMH Stock., Available at: https://www.bloomberg.com/news/articles/2021-05-21/bernard-arnault-places-538-million-bet-on-booming-lvmh-stock?leadSource=uverify%20wall (Accessed: 21/10/22)
Forbes (2020) The World’s Largest Apparel Companies 2020: LVMH On Top While Nike Gains Foothold., Available at: https://www.forbes.com/sites/marleycoyne/2020/05/13/the-worlds-largest-apparel-companies-2020-lmvh-on-top-while-nike-gains-foothold/?sh=3581b0c30ed3 (Accessed: 21/10/22)
Selfridges (2020) Art at Selfridges., Available at: https://www.selfridges.com/GB/en/features/articles/selfridges-guideto/art-at-selfridges/ (Accessed 21/10/22)
The British Council (2016) The Power of Fashion., Available at: https://www.britishcouncil.org/research-policy-insight/insight-articles/power-fashion (Accessed: 21/10/22)