Profit

Profit, one of the four pillars of the fashion industry, is also the aspect that most people are most concerned about because economic profit is often used to measure winners and losers. In McKinsey’s 2016 Global Fashion Index report, it was indicated that 20% of individuals in the fashion industry generated 100% of the profits, while the remaining 80% would be phased out.

As one of the largest markets in the retail industry, the clothing market encompasses various categories of apparel, ranging from home to sportswear and from fast fashion brands like H&M to luxury brands like Louis Vuitton . In 2022, the revenue of the clothing market was approximately 1.53 trillion U.S. dollars. The revenue is projected to grow to 1.7 trillion dollars in 2023 and is expected to reach 1.94 trillion U.S. dollars by 2027 (P. Smith, 2023).

Among them, LVMH Group, as a leading entity, generated sales of 83.2 billion U.S. dollars from May 2022 to May 2023, surpassing Nike, another leading group, by 32.5 billion U.S. dollars

Former YSL Creative Director Hedi Slimane and CEO Francesca Bellettini share a common belief: “Fashion is a competition; it’s no longer about loyalty but about being relevant to future generations and attracting them” (Mitterfellner, 2023). The story of YSL’s rise, decline, and resurgence is widely circulated in the fashion world and serves as a valuable case study.

Before 1990, YSL was at its peak. The designer himself, Yves Saint Laurent, became the first living designer to have an exhibition at the Metropolitan Museum of Art in 1983. However, YSL began to decline after 1990 due to three primary reasons. Firstly, the products ceased to be innovative, continually reintroducing previous styles. Secondly, product quality declined, and thirdly, the brand lacked a younger management team. Most of the new products released during that period were reiterations of previous styles, failing to captivate a younger consumer base. As the brand’s loyal older consumers aged, YSL’s image started to be associated with older demographics. The deteriorating brand image resulting from declining product quality and the absence of a younger management team contributed to the brand’s decline.

After 2012, with the support of Hedi Slimane, Francesca Bellettini, and the backing of Kering Group, YSL experienced a renaissance. Hedi Slimane, as the Creative Director, initiated changes throughout the brand, starting with the brand name. This generated significant controversy at the time, with many long-time customers protesting. Nevertheless, it piqued the interest of new customers. “The new design language was either loved, respected, or rejected, and no matter what the opinion was, the collection always ensured one thing: a lot of attention” (Fashionbi LTD, 2014). Despite the controversies, it at least garnered the attention of a significant number of young individuals.

The perfect collaboration between Slimane and Bellettini rejuvenated the brand, making it increasingly appealing to a younger audience, and promoting omnichannel marketing through both online and offline channels. “Kapferer says the brand can grow older but should not actually age. In order to stay young, regular reinvention, innovation, and facelifts help to stay relevant” (Mitterfellner, 2023). To thrive in the highly competitive fashion industry, a brand must continually innovate in terms of products and concepts, keep pace with the times (such as new-age digital marketing and the development of digital stores), and continuously analyze and update its existing consumers and potential consumers.

Products are pivotal for a brand’s profitability, and creative directors are the ones steering the ship behind those products. In the realm of fashion brands, creative directors have four primary responsibilities as outlined in Mitterfellner (2023): firstly, they lead fashion design; secondly, they serve as the brand’s visionary; thirdly, they manage multiple teams; and fourthly, they act as brand ambassadors. It can be said that every visual aspect presented to customers by a brand is crafted by the creative director.

Renowned creative director Karl Lagerfeld once simultaneously worked for three brands, Chanel, Fendi, and Karl Lagerfeld. This is because the products created by a creative director aren’t solely based on their own ideas but must also align with the brand’s inherent personality. Therefore, even with the same creative director, the output of products varies. (Mitterfellner, 2023). Hence, a creative director builds upon the brand’s original personality, adding a diverse array of creativity and design. While there is a constant evolution, the core essence remains unchanged. The brand’s fundamental tone remains consistent. Consequently, irrespective of how things change, it continues to resonate with its existing consumers while attracting new, younger consumers.

Bibliography

Berg, A., Hedrich, S. and Leon, J. (2017) The two faces of fashion-industry performance, McKinsey & Company. Available at: https://www.mckinsey.com/industries/retail/our-insights/the-two-faces-of-fashion-industry-performance (Accessed: 22 October 2023). 

Mitterfellner, O. (2023) Luxury Fashion Brand Management: Unifying fashion with Sustainability. London: Routledge. 

Smith, P. (2023) Topic: Apparel market worldwide, Statista. Available at: https://www.statista.com/topics/5091/apparel-market-worldwide/#topicOverview (Accessed: 22 October 2023).