Profit Pillar
Profit
Although glamorised, the fashion industry at its core is still powered by profit. An industry with a glitzy exterior, just like everything else the industry is powered by profit, profit will always win out, it’s a necessity, however sustainable a brand is trying to be if they are unable to turn a profit their business is unable to do any good.
The fashion industry has huge economic power, in 2022 it was reported that the revenue of the global apparel market was $1.53 (Smith, 2023). In the UK alone the estimated revenue is £58.5 billion (Smith, 2023). Although these are still high levels of revenue, the fashion industry has taken a large hit, first from Covid-19, and then due to the recession that followed the industry did take a hit and only in 2023 is it expected to reach pre-COVID levels. With the growth of social media, and TikTok in particular, there has been a surge in new short trend cycles. Coach saw this, in 2021, with their rebrand, and the introduction of the TABBY bag coach saw a huge growth in sales but as trends changed Coach has since seen their brand value fall by 31% (Adegeest, 2021). Instead, there has been a growth in ‘quite luxury’ brands such as Longchamp and their Le Pliage as well as Goyard and their Mini Anjou tote, with the La Pliage reaching number 9 on the Lyst index for Q2 of 2023 and Goyard who was an increase of 95% in Q2 (2023, Lyst).
For creative directors, they often have to sacrifice their integrity as a designer inorder for the business to be profitable, most brands don’t make their money through the glitzy collections, there fashions shows are for a select group so instead they have to resort to other methods, perfumes and beauty products are for many brands their main source of income and growing and maintaining these streams allows the creative director and the designers to create the collections they want to, these streams are vital for the business to succeed. These tactics seem to be working as the luxury market is expected to grow by 5% to 10% in 2023 (McKinsey, 2022). As well as using other revenue streams brands are trying out different marketing tactics to try and convince the younger audience to part with their cash, using influencers and young celebrities to try and convince Gen-Z to spend and partnering with brands such tiktok and youtube to show their fashion shows.
Adegeest, Don-Alvin (2021) Nike is world’s top valuable apparel brand (Article) https://fashionunited.com/news/fashion/nike-is-world-s-top-valuable-apparel-brand/2021040839336 (Accessed 22/10/2023)
Lyst Index (2023) – The Lyst Index, Fashion’s Hottest Brands and Products Q2 2023 (Report) https://www.lyst.com/data/the-lyst-index/q223/ (Accessed 20/10/2023)
McKinsey & Company (2022) – The State of Fashion 2023: Holding onto growth as global clouds gather (Report) https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion (Accessed 21/10/2023)
Smith, P (2023) Revenue of the Apparel Market Worldwide from 2014 to 2027 (Report) https://www.statista.com/forecasts/821415/value-of-the-global-apparel-market (Accessed 20/10/2023 )
Smith, P (2023) Apparel Market in the United Kingdom (Report) https://www.statista.com/topics/3348/apparel-market-in-the-uk/#topicOverview (Accessed 20/10/2023)