PROFIT

Maya Fernandes ⋅ 31st October 2022

The pillar of profit explores the economic side of the fashion industry, looking at how lucrative fashion is as an industry and how businesses can seek to sustain themselves financially within it. Financial growth is essential for any business to survive long-term as without it the company positions itself highly at risk of being pushed into closure by macroeconomic factors like inflation, (Rinalducci, 2022) which is particularly prominent in the economic conditions of 2022 which present the weakest global growth profile since 2001. (imf, 2022)

As of 2022, the fashion industry is valued at $1.7trillion representing the seventh largest economy in the world (Mckinsey, 2016) and accounting for 2% of global gross domestic product. (Ariella, 2022) Despite pandemic disruptions, the industry has shown significant recovery over the last two years, with predictions of full recovery in the luxury sector by the end of 2021 and the wider industry by 2022. This may be due to what has been coined “revenge shopping” – an overindulgence in the consumption of fashion items to make up for time lost from lockdowns. (Mckinsey, 2021) Revenue in the apparel segment has also been projected to reach $567.40bn in 2022, with women’s apparel generating the most revenue, followed by men’s and then children’s. (Statista, 2022)

One way brands may choose to remain competitive within uncertain economic times is through the recycling of both pre and post-consumer textiles and clothing. (Hethorn et al, 2015) This can be economically beneficial as it has the potential to reduce energy consumption and the quantity of raw materials required. Additionally, it is advantageous to the environment, ticking off a critical CSR initiative for the company which consequentially can make the brand more appealing to consumers (Monster, ND) as sustainability and ethics remain a driving motivator for Gen Z and millennial shoppers. (Drapers, 2022)

Econyl: regenerated nylon which is infinitely recyclable.

Historically, it has proved economically beneficial for fashion designers to position themselves as artists, aligning themselves with creativity over commerce to prove themselves as the creators of what is fashionable and what is true art. Consumers interested in unique and distinctive garments are drawn to this however, to be considered true art, it runs the risk of not appealing to mass markets. (Stevenson, 2019) Creative directors have the responsibility of bridging together these two elements. One might do this by taking inspiration from designers of the past and aligning with creativity, thinking creatively at every step of business beyond the product itself like how to market it or even creating a market for it. (Whitaker, 2018)

Reference list:

Ariella, S. (2022). ’28 Dazzling fashion industry statistics [2022]: How much is the fashion industry worth’ Zippia.com

Available at: https://www.zippia.com/advice/fashion-industry-statistics/

(Accessed: 30 October 2022)

Drapers. (2022)’ ‘Gen Z and Millenials 2022’ Drapersonline.com

Available at: https://www.drapersonline.com/guides/gen-z-and-millennials-2022

(Accessed: 15 October 2022)

Hertantyo, S. (nd) ‘Econyl: regenerated nylon which is infinitely recyclable.’ Consciousfashion.co

Available at: https://consciousfashion.co/guides/textile-recycling-companies

(Accessed: 31 October 2022)

Hethorn, J., & UlasewiczA, C. (Eds.). (2015). Sustainable Fashion: What’s Next? A Conversation about Issues, Practices and Possibilities. New York: Bloomsbury, pp 204-230

Available at: https://www-bloomsburyfashioncentral-.com.arts.idm.oclc.org/encyclopedia?docid=b-9781501312250

(Accessed: 21 October 2022)

IMF. (2022). ‘Inflation and uncertainty’ imf.org

Available at: https://www.imf.org/en/Publications/WEO/Issues/2022/10/11/world-economic-outlook-october-2022#:~:text=Global%20growth%20is%20forecast%20to,of%20the%20COVID%2D19%20pandemic.

(Accessed: 28 October 2022)

Mckinsey&Co. (2016). ‘The State of Fashion 2017’ Mckinsey.com

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: 28 October 2022)

Mckinsey&Co. (2021). ‘The State of Fashion 2022’ Mcknisey.com

Available at: https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/state%20of%20fashion/2022/the-state-of-fashion-2022.pdf

(Accessed: 28 October 2022)

Monster. (nd). ‘What is corporate social responsibility (CSR) and how does it apply to my business? Q&A’ Monster.co.uk