Profit
Profit can be used as a measure of success within a business, it is defined as money that is earned in trade or business after paying the costs of producing and selling goods and services. (Cambridge dictionary). It is assumed that a business’s main objective is to make a profit however with growing concerns over the environment, equality and accountability from Gen z consumers, businesses must adhere to these factors as well as their goal of profit.
In 2022, the revenue of the global market was estimated at $1.52 trillion with China and the USA accounting for 41%.(Statista., 2023) The industry experienced 18 months of robust growth between early 2021 and mid 2022, after Covid 19 lockdown restrictions were lifted in parts of the world (McKinsey., 2022). Hyperinflation has already resulted in declining rates of consumption in 2022 and 2023. The luxury sector however is expected to outperform the rest of the industry, it’s expected to grow between 5-10% in 2023 in China and the US. In Europe however with high pressure from currency rates and the growing energy crisis the growth in the luxury sector is likely to result in modest growth in the luxury sector. (McKinsey 2022)
Uncertainty within the industry is rife, with many consumers, especially in Europe having less disposable income due to cost-of-living crisis. Successful social media campaigns are crucial in order to attract consumers. A study by SDL in 2014 revealed that 5 out of 6 millennials connect with companies on social media platforms (Hethorn, J & Ulasewicz, C., 2015). Companies who pay attention to consumers beliefs such as trying to stop further climate change will have a better chance at staying competitive. A 2011 pew survey found that millennials are more supportive of stricter environmental laws and are more likely to favour environmentally friendly policies. With the internet it is easy to research brands and see whether they are adhering to environmentally friendly practices. Millennials and Gen Z are more likely to pay for more responsibly made products and 80% say they want to work for companies that care about their impacts on the climate.
Karl Lagerfeld’s work with Fendi and Chanel is a great example of how creative directors combine creativity and commerce. Whilst working with Fendi, Lagerfeld was behind the scenes. After 50 years as creative director, they created the Fendi book and the Karlito fur toy design, this started a wide trend of furry bag accessories across the industry, which is still popular today and creates revenue within brands of all price points. Lagerfeld then became the openly showed face of Chanel where he created impression insulations and brought Chanel’s heritage to life through film and photographs used in advertising. (Mitterfellner, 2023)
Statista (2023) ‘Global apparel market – statistics and facts’ https://www.statista.com/topics/5091/apparel-market-worldwide/#topicOverview (accessed 19/10/2023)
Hethorn, J & Ulasewicz, C (Eds) (2015) ‘Sustainable fashion, what’s next?’
https://www-bloomsburyfashioncentral-com.arts.idm.oclc.org/encyclopedia-chapter?docid=b-9781501312250&tocid=b-9781501312250-chapter4&pdfid=9781501312250.ch-004.pdf (accessed 19/10/2023)
McKinsey & Company (2022) ‘The state of fashion 2023: Holding onto growth as global clouds gather’
https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion (accessed 20/10/2023)
Mitterfellner, O (2023) Luxury fashion brand management: Unifying fashion with sustainability https://ebookcentral.proquest.com/lib/ual/reader.action?docID=7260416 (accessed 19/10/2023)