Qianchang Chen

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Profit

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Fashion is a $1.2 trillion global industry, with more than $250 billion spent annually on fashion in the United States, according to industry analysts. Fashion and apparel industries employ 1.9 million people in the United States and have a positive impact on regional economies across the country (LeadFerret, 2014). 

Fashion is a structurally diverse industry, ranging from major international retailers to wholesalers to large design houses to one-person design shops. It employs people across occupations—including fashion designers, computer programmers, lawyers, accountants, copywriters, social media directors, and project managers. According to a report by the California Fashion Association, manufacturing is only a fraction of the modern apparel industry as “it is a highly sophisticated industry involving fashion and market research, brand licensing/intellectual property rights, design, materials engineering, product manufacturing, marketing and finally, distribution.” (California Fashion Association, 2011).

In the fashion industry, as one of the four pillars of fashion business school, profit occupies a significant position, which reflects the social and economic situation. The profit pillar in the fashion business school discusses economy being less about monetary value and more about it being a series of systems through which humanity provisions the requirements of life and society.

In the past few years, the fashion industry’s profits have been constrained by the COVID-19 pandemic. Revenue in the fashion industry fell 20 percent in 2019 and 2020, as the earnings before interest, tax, and amortization (EBITA) margins declined by3.4 percentage points to 6.8 percent. As Covid-19 continued to spread, performance inequality, which has become a challenge in recent years, is more pronounced than ever. According to the latest data from the McKinsey Global Fashion Index (MGFI), a record 69% of companies were value destroyers in 2020, compared with 61% in 2019 and 28% in 2011. About 7% of companies have exited the market, either because of financial distress or because they were acquired by competitors. From a geographic perspective, China was the standout performer in 2021, as its economy recovered much faster than other countries. In 2022, the industry’s growth will likely be driven by both China and the United States, but growth would be less imminent for Europe (McKinsey & Co., 2021).

At the same time, in the context of capitalist decision-making in the post-pandemic global economy, contemporary artists are forging a new and positive relationship with the social relations of mass culture and production. Many brands are starting to think about the balance between creativity and commerce.

The global pandemic has pushed physical footfall to a historically low level, with many brands facing challenges from supply chain disruptions and changing consumer demand. On top of that, the acceleration of digitalization has provided brands with a dizzying range of services and media channels to advertise their products, while consumers have a greater variety of choices. These factors are forcing brands and retailers to work harder than ever to keep pace with the market and adapt to the adversity they face. Therefore, brand collaboration has become a strategic marketing solution to meet these challenges.

Brand collaborations enable consumers to experience familiar brands in novel ways, using social media to create buzz around the products and the brands who make them, leading directly to sales — and all at a fraction of the cost of equivalent digital advertising. H&M, for example, regularly collaborates with different high-end fashion brands. From Moschino to Karl Lagerfeld, H&M have successfully, and repeatedly, brought high end fashion to the high street by annually co-creating an affordable capsule collection with a high-end brand. By doing so, H&M ‘cash in’ on the exclusivity factor of these high fashion brands and continue to position themselves as an attractive place to shop. 

The high-end fashion brand also benefits as they gain access to a wider customer base, greater brand recognition and broader advertising potential with more people wearing their logos and brand imagery day to day (not to mention the royalties they are presumably entitled to in respect of sales of the H&M range) (FootAnstey, 2022).

Reference:

LeadFerret, “LeadFerret Releases a Directory of Contacts in the Fashion and Apparel Industry” (press release, January 16, 2014)

The Los Angeles Area

J. Blank. (2011). FASHION INDUSTRY PROFILE. California Fashion Association. Available from https://www.econ-jobs.com/research/34815-Los-Angeles-Area-Fashion-Industry-Profile.pdf [Accessed October 22, 2022].

Available from https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion [Accessed October 22, 2022].

Stevenson, C. (2019). “(I was there) when it all went down”, in Cronberg, A. (ed) Vestoj issue 9: On Capital. Available at https://moodle.arts.ac.uk/pluginfile.php/1463893/mod_label/intro/Week%204-Pre%20seminar%20read%20-Stevenson%20%28I%20was%20there%29%20when%20it%20all%20went%20down.pdf [Accessed October 22, 2022].

Batten. (2022). The Rise of the Brand Collaboration. FootAnstey. Available from https://www.footanstey.com/our-insights/articles-news/brand-x-brand-the-rise-of-the-brand-collaboration/ [Accessed October 22, 2022].

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People

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“People” is one of the four pillars of the fashion business strategy, focusing on the social aspects and issues of the fashion industry. The word “people” emphasizes diversity and inclusion, and how these features can be used to market to target customers to guide consumption. People use fashion to show their true character and their uniqueness, “Fashion can change and shape lives through its connection to us all” (Corner, 2022). Generation Z is a good example of people who are following fashion trends influenced by social media, posting their photos and opinions on the Internet.

Generation Z—people who born from 1995 to 2010—are true digital natives: from earliest youth, they have been exposed to the internet, to social networks, and to mobile systems. That context has produced a hypercognitive generation very comfortable with collecting and cross-referencing many sources of information and with integrating virtual and offline experiences (McKinsey, 2018). Gen Z consumers are more inclined to shopping online, which they think is more convenient (Drapers, 2022). When choosing fashion items, they are not only concerned with whether it will make them feel comfortable, but also consider whether they will feel more confident by wearing it.  

To attract Gen Z consumers, the brand needs to become a positive contributor to their culture. The brand needs to be genuine and not forced. Brands will need to focus on embedding the brand itself into culture and cultural conversations, and in a way that is appropriate and natural – this needs to be organically integrated with social media platforms and online advertising.

One example of a brand responded to diversity is Fenty Beauty. Fenty Beauty is a makeup brand founded by Barbadian singer Rihanna in 2017 in collaboration with Sephora. It focuses on creating formulas that work for all skin tones. Fenty Beauty, is all but synonymous with authentic inclusive marketing, created on the foundation that everyone woman is beautiful and should feel included. In 2017, Fenty Beauty launched 40 shades of foundation, and that has since grown to 50. Chaédria LaBouvier wrote in Allure that Fenty Beauty’s sheer number of foundation colors is “a statement that women of color deserve complex options”. 

Rihanna shared that, “It’s important to me that every woman feel included in this brand.” Once this campaign launched, it had a ripple effect called “The Fenty Effect”, a movement calling for brands to challenge the status quo in advertising by creating ads that are diverse and inclusive (Refuelagency, no date).

Reference: 

Corner. (2022). Why Fashion Matters. Artsandculture. Available from  https://artsandculture.google.com/story/why-fashion-matters/_QKS0J-OeT7HIA [Accessed October 16, 2022].

Francis, Hoefel. (2018). ‘True Gen’: Generation Z and its implications for companies. McKinsey.  Available from https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/true-gen-generation-z-and-its-implications-for-companies[Accessed October 16, 2022].

Moran. (2022). Gen Z and Millennials 2022. Drapers. Available from https://www.drapersonline.com/guides/gen-z-and-millennials-2022[Accessed October 16, 2022].

Refuelagency. (No date). 6 Examples of Brands Who Got Multicultural Marketing Right. Refuelagency. Available from https://www.refuelagency.com/blog/multicultural/examples-of-brands-who-got-multicultural-marketing-right/ [Accessed October 16, 2022].

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Planet

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1. In the context of global economic integration, economic development has always been the premise of the development of social science and technology and industrial in the whole society. However, the rapid development has caused a series of potential problems. In order to avoid these potential problems affecting the economic development, people must take corresponding economic measures to promote the development of society. Therefore, the emergence of circular economy can be said to ensure the overall trend of economic development to a certain extent. Circularity transforms our throw-away economy into one that eliminates waste, circulate resources, and adopt nature-positive, low carbon, resource-efficient systems and actions (Wrap, no date). This allows us to use resources over the long term and reduce damage to the environment.

2. People, profit, and planet are all interlocked in this pursuit for sustainability, especially in fashion.   Sustainable fashion is important to creating a better future and a better fashion industry. A sustainable fashion brand will pay and treat workers fairly, it will offer transparency about their practices and supply chains (Immago, 2020). It won’t produce in excess or push overconsumption to drive sales. Sustainable fashion designers will be designing with circularity and regeneration in mind.

3. Gender equality in the fashion industry is not yet as it should be. On the consumer side, the fashion industry targets women more than it does men, but when you get to the top levels — think creative directors and C-suite executives — men far outnumber women (fashionista, 2018). Gender inequalities impact all aspects of the fashion industry; from violations in garment workers’ rights, to the lack of career progression opportunities in the industry, to the shockingly low percentage of women in leadership positions (currently 25% of leadership roles in top fashion companies are held by women, while they make up 70% of the total workforce). It is estimated that the garment industry employs more than 60 million workers worldwide. Most of them are women, who are often scrutinized for labor exploitation and sexual harassment (trtworld, 2021).

Reference:

Wrap. (no date). WRAP and the circular economy. Wrap. Available from https://wrap.org.uk/taking-action/climate-change/circular-economy [Accessed 8th October 8, 2022].

Marshall. (2020). What is sustainable fashion and why should we care. Immago. Available from https://immago.com/sustainable-fashion/[Accessed 8th October 8, 2022].

Bauck. (2018). WANT TO SEE MORE GENDER EQUALITY IN FASHION? HERE’S WHAT YOU CAN DO. Fashionista. Available from https://fashionista.com/2018/05/gender-equality-fashion-industry-glass-runway-study [Accessed 8th October 8, 2022].

Trtworld. (2021). Top fashion brands still lagging on gender equality. TRTWORLD. Available from https://www.trtworld.com/art-culture/top-fashion-brands-still-lagging-on-gender-equality-47935 [Accessed 8th October 8, 2022].

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My favorite fashion brand: Alexander Wang

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Alexander Wang is a New York based fashion designer who started his own label Alexander Wang at 2005. 

Wang’s designs are known for its unisex silhouette, dominantly black color palette and casual urban styling, and he is inspired above all by street style. His credo: “Anyone can look glamorous”. That’s why his models are simple, classic, almost androgynous. At the same time, he also likes to experiment with materials like neoprene, latex and fur. Typical for him is the color black, which is the main focus in the collections. From 2012 to 2015, Wang was the chief designer of Balenciaga. After he ended his cooperation with Balenciaga，Wang did many collaborations with well-known brands such as H&M, adidas and Bvlgari.

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