Profit

Each and every business owner starts out with the expectation of making profit. It can also be considered as a measure of accomplishment for a business. According to Stobierski (2020), profit is typically defined as the balance that remains when all business’ operating expenses are subtracted from its revenues. It’s what’s left when the books are balanced, and expenses are subtracted from proceeds (Stobierki, 2020).

Every type of clothing is included in the garment sector, from sporting to business wear, from affordable clothes to high-end statement items. High inflation in 2022 presented new challenges for the global garment sector after the market recovered in 2021 from the consequences of the coronavirus (COVID-19) epidemic. The fashion industry started with a boom of £60.62 billion in 2019 and dropped down to £54.97 billion in 2020 when the lockdown hit (Statista, 2023). Subsequently, the revenue of the apparel market in the UK increased to £62.87 billion in 2021, dropping down to £60.41 billion in 2022; with a massive increase in 2023 of £70.04 billion (Statista, 2023). The value of the fast fashion market worldwide was estimated to be worth over 106 billion U.S. dollars in 2022. This was forecast to rise considerably in the following years. In 2027, the global market value of fast fashion was forecast to reach a value of approximately 185 billion U.S. dollars (Smith, 2023). 

As mentioned in the Statista (2023) report, fashion purchases by Gen Z in the UK in 2023 by the following categories are, Clothing- 72%, Shoes- 58%, Accessories (bags, belts, jewellery)- 41%, Headwear- 22%. Since the pandemic in 2020, e-commerce has been a budding sector in the fashion industry; e-commerce is still preferred over in-person shopping as it is easier and more accessible, moreover anything ordered gets delivered directly to the doorstep The fashion industry is under constant change, and to keep up, brands try implementing a variety of new marketing strategies. Some viable methods as stated by Clausen (2020) are, being adaptable and receptive to new platforms, tools, and technology; providing certainty when people are overwhelmed by ambiguity and taking advantage of the time to concentrate on strategy, create content, and examine client behaviour.

Lastly, a brand’s main target is usually profit, so the question arises, how do creative directors bridge the gap between creativity and commerce? A creative director’s collection must generate revenue, which is often a point of success measurement when CEOs and shareholders look at annual reports (Mitterfillner, 2023). Creative directors understand the brand values, target consumers, and brand aesthetic and reflect that onto the products. This reinterpretation and consistency form the brand’s heritage and sustain it from decade to decade. For example, Karl Lagerfeld, who joined Fendi as a creative director in 1965 for 54 years, then joined Chanel as the creative director from 1983 until 2019 and founded his own label in 1984 (Mitterfellner, 2023) but still managed to maintain the aesthetics of the respective brands and delivered products without compromising the brand value, integrity, and aesthetic.

Reference List:

Clausen, E. (2023) Marketing Rules To Follow During Uncertain Economic Times. Available at: https://www.forbes.com/sites/forbesagencycouncil/2020/04/03/marketing-rules-to-follow-during-uncertain-economic-times/ (Accessed: 21 October 2023).

Mitterfellner, O. (2023) Luxury Fashion Brand Management and sustainability: Unifying fashion with sustainability. New York: Routledge. (Accessed: 21 October 2023).

Smith, P. (2023) Fast fashion market value forecast worldwide from 2022-2027. Available at: https://www-statista-com.arts.idm.oclc.org/statistics/1008241/fast-fashion-market-value-forecast-worldwide/ (Accessed: 21 October 2023).

Statista. (2023) Generation Z fashion market in the United Kingdom. Available at: https://www-statista-com.arts.idm.oclc.org/study/139027/generation-z-fashion-market-in-the-united-kingdom/ (Accessed: 21 October 2023).

Stobierski, T. (2020) Cash Flow vs. Profit: What’s the difference? Available at: https://online.hbs.edu/blog/post/cash-flow-vs-profit (Accessed: 20 October 2023). 

Reference for Figures:

Fig 1:

(no name) (no date). Revision notes. Available at: https://www.dineshbakshi.com/igcse-business-studies/financial-information-and-decision/revision-notes/1360-profit-and-its-importance (Accessed: 21 October 2023).

Fig 2:

Statista. (2023) Generation Z fashion market in the United Kingdom. Available at: https://www-statista-com.arts.idm.oclc.org/study/139027/generation-z-fashion-market-in-the-united-kingdom/ (Accessed: 21 October 2023).

Fig 3:

Kambouris, D. (2019). Karl Lagerfeld, the designer who dressed to survive. Available at: https://www.newyorker.com/culture/postscript/karl-lagerfeld-the-designer-who-dressed-to-survive (Accessed: 21 October 2023).