Profit
Profit is the driving force behind a company and is the main way a brand defines its success. This profit allows the brand to manifest through more elaborate designs, campaigns and collaborations bringing more exposure, therefore causing further growth.
The fashion industry is one of the largest industries in the world, it’s constantly expanding and is currently larger than ever – evidential, for instance, through Louis Vuitton surpassing €20 billion in revenue for the first time in 2022 (Lyst Insights, 2023) as well as the total revenue of the global apparel market being calculated up to $1.53 trillion in the same year (Smith, 2023).
The current economic climate – with the current cost-of-living crisis throughout Europe – has led to people having less disposable income to spend on the recently inflated prices of the fashion industry. However, consumers of the luxury sector are people of wealth who are insulated from the effects of the cost-of-living crisis and therefore are still able to spend money on luxuries. As a result of their target audience being less affected by this time of hyperinflation, the luxury sector is expected to outperform the rest of the fashion industry, with an estimated growth of 5-10% in 2023. The rest of the fashion market, on the other hand, is due to struggle delivering growth in 2023 with consumers being negatively affected by the economic climate (McKinsey, 2022).
In these uncertain economic times, consumers are likely to be more selective with brands they choose to shop with. Therefore, brands have to adapt in order to remain competitive. This can be achieved through the utilisation of social media as a tool for transparency and honesty. Everlane, an online-only boutique that depends solely on social media to demonstrate their “radical transparency”, proves that a model of honesty and transparency is in fact profitable (Hethorn and Ulasewicz, 2015). In the age where young people prioritise brands that demonstrate sustainability and social awareness, the brand having this niche will help keep it afloat.
In order to stand out from other companies, a brand must demonstrate creativity but equally a business-savvy leader is required for creative brands to take off. Creative directors, therefore, have the responsibility to bridge the gap between creativity and commerce in order to bring around success for their brand. If you look to Marc Jacobs, for example, the brand is run by a designer-business partner duo – Marc Jacobs, the designer, and Robert Duffy, a retail specialist – and the two together produce a balancing act between the creative and the commercial logics when it comes to running the brand. It is argued that without Duffy managing Jacobs’ creativity to be profitable, the brand wouldn’t be as renown as it is today (Overdiek, 2016).
Reference list
Hethorn, J. and Ulasewicz, C. (2015). Sustainable fashion : what’s next? : a conversation about issues, practices and possibilities. New York: Bloomsbury, Fairchild Books, An Imprint Of Bloomsbury Publishing Inc.
Lyst Insights. (2023). The Lyst Index: Fashion’s Hottest Brands and Products Q1 2023. [online] Available at: https://www.lyst.com/data/the-lyst-index/q123/.
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.
Overdiek, A. (2016). Fashion designers and their business partners: Juggling creativity and commerce. International Journal of Fashion Studies, 3(1), pp.27–46. doi:https://doi.org/10.1386/infs.3.1.27_1.
Smith, P. (2023). Global apparel market – statistics & facts. [online] Statista. Available at: https://www.statista.com/topics/5091/apparel-market-worldwide/#topicOverview