PROFIT – Connecting Art and Commerce
Profit in the fashion industry is strongly based off the market decisions made by people in the industry. The conversation about the merging of art and commerce is essential since obviously, one of the main objectives of a brand is to make profit from sales. Likewise to majority of businesses, is most important to be prepared for when financial times are uncertain. For example, after the great recession when the unemployment rates were at their highest since World War II and subsequently the garment industry dropped by 10.4% (Lê, 2020) or more recently when we were faced with a global pandemic resulting to the closure of many well-known brands and online shopping rates sky-rocketing.
In 2022, the approximate size of the fashion industry globally was around $1.53 trillion (Smith, 2023), which is a decrease from the previous year. This is a result of the hyperinflation that the market experienced in 2022 as production costs rose significantly and consumers felt less and less confident about the future economic conditions in the industry.
According to (André Et al., 2022), in terms of the different sectors the luxury sector is anticipated to surpass the rest of the industry and is estimated “to grow between 5 and 10 percent in 2023.” The sportswear market is also excelling with key brands such as Nike (the worlds leading brand in athletic wear) and Adidas having great economic growth within their sector with Nike making 42.6 billion euros in global revenue in 2023 (Tighe, 2023)
There have been numerous circumstances where brands have had to work extra hard to ensure they stay in a competitive field. Typically, brands that fail to do this will ultimately decline in sales. Michael Cromer, the founder of luxury German brand MCM is a good example of someone who experienced this. As described in (Mitterfellner, 2023), several external issues occurred which were out of Cromer’s hands during the peak of MCM which lead to Cromer losing his brand, his money and his reputation. However, there were ways in which he could have prevented this which were overlooked at the time such as; quality control, releasing new styles and trends, ensuring distribution was being handled and staying within the target market. Moreover, a tax evasion investigation was opened for Cromer, crushing his and the brands reputation.
The role of a creative director is to take creative control for the vision of the brand, one icon that does this best is the late Karl Lagerfeld who took on this role for Fendi and Chanel. He designed the famed FF Fendi logo which impacted the brand significantly, transforming it from an unusual squirrel image to a bold, marketable fashion label (Mitterfellner, 2023). It was clear that Lagerfeld had a talent for artistic vision, and with the understanding that he had influence in the industry meant that he had high amounts of cultural and social capital. Utilising this, he made his own name into a brand and became known for his distinctive look and black and white colour palette. Up until his death he made tremendous contributions to the fashion world, revitalising Chanel and evolving Ready-to-wear/ couture lines.
André, S. et al. (2022) The state of fashion 2023: Holding onto growth as global clouds gather, McKinsey & Company. Available at: https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion (Accessed: 23 October 2023).
Le, K. (2020) Fashion industry during and after economic crisis, LinkedIn. Available at: https://www.linkedin.com/pulse/fashion-industry-during-after-economic-crisis-kim-l%C3%AA (Accessed: 23 October 2023).
Magyar, J. (2021) SAP brandvoice: How covid-19 is nudging the fashion industry to go circular, Forbes. Available at: https://www.forbes.com/sites/sap/2021/01/12/how-covid-19-is-nudging-the-fashion-industry-to-go-circular/?sh=7bdaf98d2a63 (Accessed: 23 October 2023).
Mitterfellner, O. (2023) ‘2 Decline and Resuscitation of Luxury Fashion Brands’, in Luxury Fashion Brand Management. London: Routledge.
Mitterfellner, O. (2023) ‘6 Decline and Resuscitation of Luxury Fashion Brands’, in Luxury Fashion Brand Management. London: Routledge.
Smith, P. (2023) Topic: Apparel market worldwide, Statista. Available at: https://www.statista.com/topics/5091/
Tighe, D. (2023) Nike versus Adidas versus Puma: Sales comparison, Global revenue of adidas, Nike and Puma from 2006 to 2022. Available at: https://www.statista.com/statistics/269599/net-sales-of-adidas-and-puma-worldwide/ (Accessed: 23 October 2023).