Profit

Declan Miele-Howell ⋅ 7th November 2023

While a brand should strive for creativity and singularity, a company’s profit margins mustn’t be overlooked as a means to measure its success. Fashion houses define their growth and popularity largely through how designs and products are received by consumers, but from a business perspective, profit is the ultimate manifestation of how a company evaluates it’s growth and affluence.

According to Statista, the global apparel market generated $1.53 trillion USD in revenue in 2022, is expected to generate $1.74 trillion USD in 2023, and by 2027 could be generating almost $2 trillion USD. These statistic alone reflect how large the fashion industry is currently, and how in years to come one can expect even more growth and expansion. This is because no matter how much trends may change over time, fashion will always be relevant as a means of self-expression. In addition, specific industries such as sportswear are constantly developing new technologies for athletes, which means the amount of money being put into the industry and the amount of profit generated from it is ever-growing.

*(Statista graph displaying Revenue of the apparel market worldwide from 2014 to 2027)*

The fashion industry can generally be divided into three primary sectors: luxury brands, mid-market brands and fast fashion brands. As of 2023, Statista reports a revenue of $111.5 billion USD for the luxury fashion market, with an increase of 14.7% from 2022. Another Statista report states that the fast fashion market was worth over $106 billion USD in 2022, and is expected to reach approximately $185 billion USD by 2027. Lastly, the mid-market sector has interestingly seen a significant rise according to a MediaVision report, which presents data showing brands such as Phase Eight, Cos and Birkenstock overtaking brands such as Chanel and Prada in internet searches, which can likely be attributed to luxury shoppers finding cheaper alternatives.

When facing uncertain economic times, brands should consider the importance of adaptability. With social media being the primary source of information for current generations, companies must come up with new and creative ways to advertise. Depending on a brand’s desired image and its target audience, the internet can be used to its advantage to attract a larger audience, while maintaining the loyalty of existing consumers. Social media can also be used to increase the transparency of a company, which is especially important in the modern day, as sustainability and ethics are deemed to be more significant than ever amongst potential consumers. Brands might also consider Bourdieu’s Three Capitals: Cultural, Social and Economic. The cultural factor takes into account a brand’s awareness of global cultures, specifically in terms of the fashion world. Social capital can be defined essentially as ‘who you know’; in this age of social media, social networking is more accessible than ever and is paramount to the growth of a business. Lastly, economic capital is simply how much money one has to put into a brand, and it relates to how much profit one makes from their investment.

But what defines the difference between creativity and commerce, and how do creative directors strive to bridge that gap? Consumers tend to refer to designers as artists when a brand is the most separated from the commercial side. A great example of this is Balenciaga’s 2022 Mud Show in Paris, designed by the artist Santiago Sierra and overseen by Demna Gvasalia, the brand’s current creative director and founder of Vetements. Demna was hailed as an artistic genius by many for the show, the originality of which caused many to perceive the experience as a form of art, completely unique from the commercial side of the company. According to Demna in a 2015 interview with The Last Magazine, “[Creativity] is often diminished and bullied out by the ‘idea’ of commerciality, which is often not even needed in the oversupplied and over-consumed market.” He also noted “we try to make clothes that complement [the consumers’] wardrobes,” which perfectly sums up the fact that creative directors have the power to merge the creativeness and commerciality of a brand.