Profit
Profit and profitability are vital to business survival, health, growth and success in the fashion industry. Profit funds the innovation and growth of brands, with the investment helping brands to develop and flourish. Without this, brands and the fashion industry would stagnate and fail. Profit is vital for success – but not just business profit – increasingly social profit is seen by the fashion industry as important and key to their success.(Nestorovic, M. (2023) Fast Fashion: The Environmental and Social Impact: agood, agood company. agood company.)
The fashion industry is huge! ‘It is truly global and wide ranging…design, production, marketing and retailing of clothing, footwear, accessories and beauty products.’ Globally valued at $1.53 trillion (forecast to rise to $1.7 trillion this year!), with employment of 3 million people….1 in 8 people worldwide are involved in the fashion industry. So important globally! (Fashion – United Kingdom: Statista Market Forecast (no date) Statista.) Fashion has always been a big business in the UK. The fashion industry contributed £26 billion to the UK economy and employed 800,000 people. Which is why it’s important to the UK. (Global Fashion Industry Statistics (no date) FashionUnited.).
A report by McKinsey, leading industry forecasters, says that the fashion industry now faces a challenging climate. Over the past 18 months the industry has grown (revenue increases of 21% in 2020-2021), ‘so is in a better position to face the current issues of hyperinflation, issues in supply and generally depressed customer demand.’ (The State of Fashion 2023: Holding onto growth as global clouds gather (2022) McKinsey & Company. McKinsey & Company.) ‘The luxury sector is expected to outperform the rest of the industry (up to 10% growth).’ Whereas the rest of the fashion market – where the cost-of-living crisis impacts more on customer demand – will struggle to see growth, particularly the industry in Europe. (Harpers Bazaar (No date) Social impact effects the performances of the industry; fast fashion. This ‘industry is known for exploiting cheap labour’, particularly in developing countries where labour laws are lenient/neglected (Nestorovic, M. (2023) Fast Fashion: The Environmental and Social Impact: agood, agood company. agood company.) Workers in these countries are repeatedly paid extremely low wages and forced to work in dangerous and harmful conditions. As consumers we need to have more social morals and think whether the price is profitable to you or the worker. Brands must also start to recognise that it isn’t socially economical to profit on exploiting unjustly worker. Instead, brands should look for ethical alternatives. Social profit in the fashion industry involves creating ‘innovative and sustainable solutions to social and environmental issues while operating a profitable business.’ (Agrawal, A. (no date) Social Entrepreneurship in Fashion, LinkedIn.)
Marketing is key for brands to remain competitive in uncertain economic times. Helping to attract more customers and keep the existing customers! Really knowing who your target customers are, what they want and how they behave. Showing how different your brand is from competitors and ‘showcasing’ your best sellers (most profitable products). Offering promotions/flash sales (psychological triggers). Partnering with influencers/bloggers (online presents) and highlighting ethical approach/credentials. (Berg, A. (2022) How current global trends are disrupting the fashion industry, McKinsey & Company. McKinsey & Company.)
Creative directors bridging the gap between creativity and commerce as they’re responsible for creating a vision for their brand that is attractive, original and profitable. A balance between artistic and commercial. Fashion Monitor wrote an article profiling several top creative directors. Oliver Rousteing is featured in the blog. As a creative director for Balmain, at the age of 24. Rousteing helped Balmain become the first French label to surpass 1 million followers on Instagram. Showing how having an online presents is profitable. (Fashion Monitor (No date) fashionmonitor.com.) Which reveals the skills and experience needed to excel.(How To Become A Fashion Creative Director – Yellowbrick (2023)
Reference:
Nestorovic, M. (2023) Fast Fashion: The Environmental and Social Impact: agood, agood company. agood company. (Online(. Available at: https://www.agood.com/blogs/stories/fast-fashion-the-environmental-and-social-impact#:~:text=The%20social%20impact%20of%20fast%20fashion&text=The%20industry%20is%20known%20for,in%20unsafe%20and%20unhealthy%20conditions (Accessed: 21/10/2023).
Fashion – United Kingdom: Statista Market Forecast (no date) Statista. (Online(.Available at: https://www.statista.com/outlook/dmo/ecommerce/fashion/united-kingdom#:~:text=Revenue%20in%20the%20Fashion%20market,US%2443.85bn%20in%202023.https://fashionunited.com/global-fashion-industry-statistics (Accessed: 21/10/2023).
Global Fashion Industry Statistics (no date) FashionUnited. (Online(.Available at: https://fashionunited.com/global-fashion-industry-statistics (Accessed: 21/10/2023).
The State of Fashion 2023: Holding onto growth as global clouds gather (2022) McKinsey & Company. McKinsey & Company. (Online(.Available at: https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion (Accessed: 22/10/2023).
Harpers Bazaar (No date). (Online(.Available at: https://www.harpersbazaar.com/uk/fashion/fashion-news/a42555201/trustrace-sustainability-predictions/ (Accessed: 22/10/2023).
Agrawal, A. (no date) Social Entrepreneurship in Fashion, LinkedIn. (Online(.Available at: https://www.linkedin.com/pulse/social-entrepreneurship-fashion-aditi-agrawal#:~:text=Social%20entrepreneurship%20in%20the%20fashion,social%20impact%20and%20environmental%20sustainability (Accessed: 21/10/2023)
Berg, A. (2022) How current global trends are disrupting the fashion industry, McKinsey & Company. McKinsey & Company. (Online(.Available at: https://www.mckinsey.com/industries/retail/our-insights/how-current-global-trends-are-disrupting-the-fashion-industry (Accessed: 21/10/2023).
Fashion Monitor (No date) fashionmonitor.com. (Online(.Available at: https://www.fashionmonitor.com/blog/cj/10-creative-directors-at-fashion-brands (Accessed: 21/10/2023).
How To Become A Fashion Creative Director – Yellowbrick (2023) (Online(. Available at: https://www.yellowbrick.co/resources/careers/fashion-resources/how-to-become-a-fashion-creative-director(Accessed: 21/10/2023)
Cash Flow Inventory (no date) Profit Volume(PV) Ratio: Definition, Formula, and Interpreting, Cash Flow Inventory. (Online(.Available at: https://cashflowinventory.com/blog/profit-volume-ratio/ (Accessed: 21/10/2023)
Krishna, T. and Krishna, T. (2022) D2C Fashion Brands Facing The Pandemic Head-On: Apparel Resources, Apparel Resources India. (Online(.Available at: https://in.apparelresources.com/business-news/retail/d2c-fashion-brands-facing-pandemic-head/ (Accessed: 21/10/2023)
Rotation (2022) In conversation with… Ruth MacGilp #FashionRevolutionWeek, By Rotation – Blog. By Rotation – Blog. Available at: https://journal.byrotation.com/in-conversation-with-ruth-macgilp/ (Accessed: 21/10/2023).
(No date) Google Search. Google. (Onlone(.Available at: https://www.google.com/search?sca_esv=575615296&rlz=1C5CHFA_enGB1079GB1079&sxsrf=AM9HkKl-e5j0Hm0a81uCIy9azU4u-3VUSw%3A1697989012332&q=fashion%2Bbrands%2Bonline%2Bpresents&tbm=isch&source=lnms&sa=X&ved=2ahUKEwiXiKb__YmCAxUoW0EAHVF5B1oQ0pQJegQICxAB&biw=1364&bih=678&dpr=2#vhid=jq0UF8Pb9kuuKM&vssid=3981:OvdEhYkChMxyvM (Accessed: 21/10/2023).
Top 3 Women’s Apparel And Fashion Brands On Instagram (2017) Locowise Blog. (Online(.Available at: https://locowise.com/blog/top-3-womens-apparel-and-fashion-brands-on-instagram (Accessed: 21/10/2023).
Yates, J. L. (2021) Balmain creative director Olivier Rousteing opens up about injuries from fireplace explosion, Good Morning America. ABC News. (Online(.Available at: https://www.goodmorningamerica.com/style/story/balmain-creative-director-olivier-rousteing-opens-injuries-fireplace-80516866 (Accessed: 21/10/2023).
Flanagan, H. (2021) Balmain’s Olivier Rousteing Says New Documentary Reveals His ‘Vulnerable and Fragile’ Side, Peoplemag. PEOPLE. (Online(.Available at: https://people.com/style/balmain-olivier-rousteing-opens-up-about-wonder-boy-documentary/ (Accessed: 21/10/2023).