Profit
The third pillar is ‘profit’. Profit is a way of defining success. It allows for continuous improvement within a brand as well as improving the experience of the consumer. Although profit is important, a brand must also balance this with ethics and creativity.
The fashion industry is a global one. Worldwide, the revenue of the apparel market reached a value of 1.53 trillion U.S. dollars (2022), expected to increase by more than 25% by 2027. (Statista, 2022). It is also important to note that spending is not equal in all areas of the world, with China ($380bn) and the USA ($370) dominating the market (Lissaman, 2019).
A brand may experience multiple stages including growth, stagnation, decline, revitalisation and even administration (Mitterfellner, 2023). Many brands have suffered throughout the duration of the pandemic, with companies leaving the market either due to financial pressure or due to acquisitions (McKinsey & Company, 2022). A brand may choose to increase profit by diversifying into different sectors when demand is there. For example, the activewear market flourished with the shift in consumer needs when the pandemic hit, demanding a ‘work from home’ wardrobe. Consumers also engaged in ‘revenge spending’ post pandemic as a celebration, spending their savings on luxury goods, meaning the luxury sector remains strong (McKinsey & Company, 2022). The secondhand apparel market value worldwide is also increasing year by year. This goes hand in hand with the greater emphasis now being placed upon sustainability.
In times of economic uncertainty, brands need to understand their target consumer in order to remain competitive. Consistency in doing so will allow a brand to adapt according to fast-paced trends. To accurately forecast consumer demand, a brand may consider collaboration to gain access to data (Rahilly, 2022). Throughout the pandemic, consumers have had time to think about their consumption patterns. Fuelling this, are brands being exposed for unethical practices, such as Shein, meaning consumers now demand transparency throughout a brand’s whole supply chain. Therefore, if a brand is transparent, demand will increase, increasing revenue.
A creative director’s collections must create revenue and fully understanding the brand’s ‘visual DNA’ (Mitterfellner, 2023). Karl Lagerfeld balanced creativity with commerce, overseeing three brands simultaneously, joining Fendi in 1965, becoming creative director at Chanel in 1983 and founding his own label in 1984 (Mitterfellner, 2023). At Fendi, Lagerfeld designed the iconic FF logo, making the brand extremely marketable, giving creative vision to multiple aspects of the brand. At Chanel Lagerfeld was the face of the brand and his iconic style was seen throughout marketing materials, emphasising his status and dominance within the industry.
Brands must stay profitable despite losing a creative director (Mitterfellner, 2023). After the passing of Virgil Abloh, Louis Vuitton appointed Pharrell Williams as their Creative Director (2023). They knew from past collaborations that he would ‘undoubtedly lead Louis Vuitton towards a new and very exciting chapter’ (LVMH, 2023).
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LVMH, 2023. Louis Vuitton appoints Pharrell Williams as its new Men’s Creative Director. [Online]
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https://www.statista.com/statistics/826162/apparel-resale-market-value-worldwide/
