PROFIT
Profit is a necessary incentive for commerce to thrive. Its significance is debated in regards to the associations between creative and business industries. Currently, the fashion industry is worth $1.5tr USD (Smith, 2022), and its magnitude suggests great margin for profit, as well as other factors determining this level of surplus including human and economic capital investments.
All sectors of the fashion industry, including manufacturing and retailing, were disrupted by Covid-19. With McKinsey & Company, Business of Fashion projected that non-luxury and luxury fashion sales would mostly recover in the US and China, but growth would be less imminent for Europe (McKinsey & Co., 2021). Such expectations can imply that performance varies globally, based on differing consumer trends and incomes.
In unpredictable economic times, such as the Covid-19 pandemic and anticipated recession in Q4, 2022, competitiveness for brands can be derived from greater flexibility (Corner, 2014, p.6). As long as they remain aligned to their heritage, values and target consumer base, brands should consider expanding their offer, and in turn, presence in the fashion industry. For example, Supreme’s collaborations with Pat McGrath, Tiffany & Co., and Louis Vuitton have attracted new audiences to the streetwear label. Through envisioning a youthful yet distinct take on luxury, Supreme has successfully employed visual codes (Mitterfellner, 2019, p.121) such as the iconic red logo and inspiration from skate culture, to build a brand identity strong enough to enable such collaborations, thus enabling their competitiveness despite macroeconomic disruption.
The capitalistic nature of the global economy has placed fashion brands under pressure to marry creativity with commerce. Several companies have responded by introducing new chief creative officers to boost commercial growth. Burberry appointed Daniel Lee as Riccardo Tisci’s successor, due to his role in sustaining revenue growth of ‘nearly €1.2 billion in 2019’ at Bottega Veneta (O’Connor and Williams, 2022). This was mainly due to his influential footwear and accessories designs, helping to commercially and culturally elevate the brand despite worldwide economic downturn.
It may be argued that no one has unified creativity with commerce better than Demna of Balenciaga. The Georgian designer presented his Resort 2023 collection at the New York Stock Exchange, quite literally portraying the relationship between fashion and business. While sending latex-clad models down the trading floor appears to be an absurd concept, such originality has translated into undeniable success for the fashion house. Off the runway, Balenciaga’s sunglasses and bags are heavily popular with Gen Z and millennials. These accessories are intentionally at lower price points, a conscious commercial decision made to generate greater sales from aspiring customers. Overall, profitability is possible for brands who are unafraid of taking risks without compromising their creative vision, and strike a balance between commercial and artistic success.
REFERENCES:
Business of Fashion, McKinsey & Co. (2021) The State of Fashion 2022. Available at: https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/state%20of%20fashion/2022/the-state-of-fashion-2022.pdf
[Accessed 17 October 2022]
Corner, F. (2014) Why Fashion Matters. Available at: https://ebookcentral.proquest.com/lib/ual/reader.action?docID=5878041
[Accessed 17 October 2022]
Mitterfellner, O. (2019) Fashion Marketing and Communication: Theory and Practice Across the Fashion Industry. Available at: https://ebookcentral.proquest.com/lib/ual/reader.action?docID=5981798
[Accessed 18 October 2022]
O’Connor, T., Williams, R. (2022) Why Burberry Changed Designers. Available at: https://www.businessoffashion.com/articles/luxury/burberry-names-daniel-lee-chief-creative-officer/
[Accessed 19 October 2022]
Smith, P. (2022) Global apparel market – statistics & facts. Available at: https://www.statista.com/topics/5091/apparel-market-worldwide/
[Accessed 19 October 2022]