Profit
Profit is one of the vital topics to address among the four pillars of the fashion business. In the fashion sector, it has been a common view to notice how the ‘art’ can be commercialised by a brand that ultimately can acquire a profit. Consequently, the role of creative directors is needed since, as explained by Mitterfellner (2023), they are responsible for managing the creative design process and the objectives to earn returns.
Additionally, creative directors should be able to bridge the gap between creativity and commerce, or a brand will begin to lose its clientele and fail to generate revenue in the future. They need to understand the distinctions between fine art and commercial art, where commercial art refers to the selling of goods or services (Iwasaki, 2022). One outstanding example of a creative director who can successfully bridge the gap between creativity and commercials is Karl Lagerfeld. He understands the ‘brand’s visual DNA and tries to meet the aesthetic needs of the current customers and the business outlook of management’ (Mitterfellner, 2023).
Furthermore, as stated by Amed et al. (2017), when discussing earnings, fashion has emerged as one of the significant global sectors that drives a crucial part of the world economy. It is proven by the size of the worldwide apparel market, which was estimated to be 1.53 trillion dollars in 2022, and it was predicted that revenue would reach more than 1.7 trillion dollars in 2023 (Smith, 2023)(Fig. 1).
However, 56 per cent of fashion executives believe that business conditions will worsen in 2023 due to the industry’s current crises brought on by geopolitical difficulties (conflict) and economic issues (inflation) (Amed et al., 2022). This crisis will eventually impact consumer behaviour as they attempt to spend less, particularly on fashion items.
Conversely, the fear of a severe economic downturn and inflation has not bothered wealthy shoppers and tourists (Felsted, 2023). McKinsey Fashion Growth Forecasts (Amed et al., 2022) indicate that sales in the luxury sector will rise by 5% to 10% in 2023, in contrast to other categories.
Therefore, when encountering an unstable situation, a brand must adapt its business strategy to stay competitive in difficult economic times. For example, Berg (2022) contends that businesses must transform from having stores in person to a more digitally-focused business strategy. By doing this, fashion brands can attract and increase potential customers online.