Profit
Profit is a vital pillar in the fashion industry as it’s the primary method of measuring the success of a fashion brand. Without Profit a fashion brand would struggle to survive in such a competitive market, where ultimately money is the driving force for a brand and individuals. Profit enables brands to invest in the growth of their brand to ensure its currency whilst also striving to become ahead of the curve with current issues in the industry such as sustainability and diversity. More recently the profits brands are making are becoming less relevant as brands who are investing in ethical issue and therefore, lessening their profits are setting themselves up for success in the future. This highlights that fashion brands are having to choose between increasing profits or preparation for their future in such a changeable industry.
In addition to brands needing to strike the balance between profit and ethics they are also having to balance profit with creativity. In such a fast-moving industry where trends are constantly changing if a brand doesn’t stand out and have designs customers are wanting the brand will ultimately fail.
The Global Fashion Industry generated revenues of 1 .17 trillion dollars in 2021 (McKinsey 2022) and 1.53 trillion US dollars in 2022, a slight decrease on the previous year as a result a global factors such as the war in Ukraine (Statista). However, revenue is forecasted to increase in 2023 to more than 1.7 trillion dollars (Statista) as the ecommerce business is rapidly growing due to the demand for online shopping in the post covid years. Relevance and currency is at the forefront of brands agender during such uncertain economic times. The Fashion industry is split into different categories. (Berg, 2017). The luxury sector is the highest performing sector and many argue most consistent as customers are less affected by economic uncertainty and therefore there purchasing habits remain more consistent in comparison to those shopping fast fashion brands such as H&M . This is illustrated in the success of louis Vuitton as in 2020 it was ranked the highest performing fashion brand and on position 9 of all brands (fashionunited) with a total profit of 32.875 billion dollars (macrotrends).
A brand can remain competitive in uncertain economic times by ensuring the brands exposure online. With online shopping being at the forefront of the industry ease in purchasing for customers should be a focus for many brands and subsequently brands should invest in their online presence. Another strategy brands should adopt is diversity and brand transparency which will create trust between consumers and brands. In addition, brand transparency can be achieved through the use of eco labelling with tags outlining the environmental effect the manufacture of garments are having on the environment so customers can purchase mindfully. A brand being environmentally considerate will allow brands to stand out in such a competitive market.
The role of the creative director is a role anyone inside or outside the fashion industry is aware of and their role is the development of fashion collections from concept to catwalk ( Mitterfellener ,2023). The creative director is responsible for striking the balance between creativity and commerce to maximise profits. The Creative director is also responsible for the growth of the brand whilst ensuring the brand remains true to its ethos and brand image. Karl Lagerfeld is the epitome of an excellent creative director. Karl Lagerfeld whilst being the creative director of Fendi, Chanel and Karl Lagerfeld was able to bridge the gap between creativity and commerce. During his time at Fendi he was able to ensure profits increase and there is brand consistency with it being a family-owned business whilst also creatively rebranding Fendi by creating its famous logo allowing it to be easily recognisable.
Bibliography
McKinsey (2022). The State of Fashion 2023: Holding onto growth as global clouds gather. [online] McKinsey. Available at: https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion.
Smith, P. (2023). Topic: Apparel market worldwide. [online] Statista. Available at: https://www.statista.com/topics/5091/apparel-market-worldwide/#:~:text=The%20revenue%20of%20the%20global.
McKinsey & Company. (2017). The two faces of fashion-industry performance. [online] Available at: https://www.mckinsey.com/industries/retail/our-insights/the-two-faces-of-fashion-industry-performance.
login.arts.idm.oclc.org. (n.d.). University of the Arts London WebLogin. [online] Available at: https://ebookcentral.proquest.com/lib/ual/reader.action?docID=7260416.
FashionUnited. (n.d.). Global Fashion Industry Statistics. [online] Available at: https://fashionunited.com/global-fashion-industry-statistics#.
https://www.macrotrends.net/stocks/charts/LVMUY/louis-vuitton/gross-profit