PROFIT

Profit is the epicentre of all industries but is largely prominent in the fashion industry as it has a domino effect on the global economy. There is significant uncertainty within the fashion economy due to its changing nature of trends but also due to environmental and social factors, such as inflation and political tensions. Examples of recent social problems that have impacted fashion would be the coronavirus pandemic, this has caused much turmoil socially as well as economically. The aftermath of the outbreak changed the mentality of consumers and shoppers as they are now more wary of their purchases due to unstable economic circumstances (McKinsey & Company, 2023). As well as this, in the recent years inflation has been at an all-time high, with the GDP being predicted to grow 1.5% in 2023 (McKinsey & Company, 2023). This, among other factors, causes an impact on consumer behaviour as people will be reluctant to engage in fashion due to the rising costs as well as environmental concerns. Becoming a rising cause for concern, climate change is currently a focal point of consumers, as they are starting to shop less at fast fashion brands and opting for second hand alternatives via charity shops. In order to keep up with the gen Z ideology of accountability and emphasis on being environmentally friendly, companies and brands have to adapt their products and marketing approaches in order to attract the newer generations, to keep their companies alive and thriving. It would be highly unlikely for brands to sustain themselves without constantly changing and adapting in order to successfully reach their target audience, there have been cases of companies resorting to closure as their products were not reflective of the demands of their customers, therefore leading to minimal profit and massive overproduction. An example of this would be the closure of Topman, where the combination rise of rival brands as well as refusal to deliver products that were relevant to their consumers, led to their ultimate shutdown in-stores (Drapers, 2020). Another way brands can approach the idea of profit is through collaborations with the creative industry, such as artists or designers. This has proven to be successful for bringing together two different audiences to create larger profit, which can be seen by the Louis Vuitton x Steven Sprouse collaboration to create graffiti-style bags from 2001 onwards, and is still a massive success to this day, even having a re-vamp in 2009. 

References:

The state of fashion 2023: Holding onto growth as global clouds gather (2022) McKinsey & Company. https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion

Sutherland, E. (2020) Drapers, The factors behind Arcadia’s collapse https://www.drapersonline.com/insight/analysis/the-factors-behind-arcadias-collapse