Profit

Capital is at the core of the fashion industry, it allows brands to sustain their operations and enables growth. With a labour force of 3,384.1 million, the industry generates an equivalent $3 trillion USD, and roughly one in eight workers is involved in the fashion and textile industry (Fashion United, 2022; Faces and Figures: Who Makes Our Clothes?, n.d.).

Though the rate of financial growth is heavily dependent on various socio-political factors. For example, disposable income reduced during the Covid pandemic due to redundancies and sick leave, between ‘January-March 2020 and April-June 2020, employment levels fell by 424,000’, this severely halted demand for fashion goods thus caused further redundancies within the manufacturing and production process (Powell et al., 2022). As the connect between worker and brand has become more complex and clouded, there is little accountability or legal obligation for decent worker wellbeing, ‘with exploitatively low salaries, garment workers in the Global South have for years struggled to survive. Saving for emergencies was near impossible, meaning they had nothing to fall back on when the COVID-19 pandemic hit’ (Hoskins, 2021).

In addition to this, the Cost of Living Crisis has meant that shoppers have become more stringent with their spending, McKinsey found that ‘81% of Brits have changed their shopping habits in some way as a result of cost-of-living pressures’ (Caris, 2023).

In response to this, brands have had to adapt or face going obsolete. Techniques have been used aid customers in spending, like the ‘buy now pay later’ method. Klarna is a company that provides post-purchase payments, it is featured in many clothing websites, including H&M, Michael Kors and River Island  (Klarna Shops, n.d.). Another technique is boosting advertising, ‘four in ten UK firms expect to…increase their marketing spend in 2023/24, with just 15.3% expecting cuts’, this is so that companies can influence consumers into switching to competitors (Carroll, 2023).

Creative directors not only ensure brand aestheticism but also must evaluate whether it will generate capital, in fact they play a key role in bridging these two elements. Fashion business lecturer and writer Olga Mitterfellner states ‘collections must generate revenue, which is often a point of success measurement when CEOs and shareholders look at annual reports. If the figures don’t impress, the designer can and will be exchanged for another one.’ The brand must be modernised and reinvented with every collection, whilst holding true to the brands ‘visual DNA’ to please customers and board members (Mitterfellner, 2023). This task is made more difficult as the creative director must also oversee a large team, their expertise in this field, however, often lacks as brands bring in impressive designers and fail to consider their ability at staff management (Mitterfellner, 2023).

References:

Caris. (2023, January 31). Consumer behaviour in a cost of living crisis. Curated. https://curated-digital.com/blog/consumer-behaviour-in-a-cost-of-living-crisis/

Carroll, N. (2023, January 19). Marketing budgets cling to growth despite recession fears. Marketing Week. https://www.marketingweek.com/marketing-budgets-grow-despite-recession/

Faces and Figures: Who Makes Our Clothes? (n.d.). Common Objective. https://www.commonobjective.co/article/faces-and-figures-who-makes-our-clothes#:~:text=The%20global%20workforce%20is%20estimated

Fashion United. (2022). Global Fashion Industry Statistics. Fashion United. https://fashionunited.com/global-fashion-industry-statistics

Hoskins, T. (2021, January 18). “They left us starving”: How the fashion industry abandoned its workers. OpenDemocracy. https://www.opendemocracy.net/en/oureconomy/they-left-us-starving-how-fashion-industry-abandoned-its-workers/

Klarna shops. (n.d.). Klarna UK. https://www.klarna.com/uk/klarna-shops/

Powell, A., Francis-Devine, B., & Clark, H. (2022, August 9). Coronavirus: Impact on the Labour Market. Parliament.uk. https://researchbriefings.files.parliament.uk/documents/CBP-8898/CBP-8898.pdf

‌Mitterfellner, O. (2023). Luxury Fashion Brand Management: Unifying Fashion with Sustainability (1st ed.). Routledge. https://doi.org/10.4324/9781003124184