Profit
Profit in fashion refers to the financial and commercial sides of the industry. After the Second World War, consumption in fashion started to grow as people had a higher excess income once the economy started expanding. Since then, the fashion industry has continued to become a very large and profitable industry.
COVID-19 was a long period of uncertainty in the fashion economy and impacted many businesses pressuring them to be innovative to adapt to different lockdown measures globally. Many jobs in the fashion industry and social events such as fashion weeks are complex to transition to online and socially distanced. However, the challenging period was also an opportunity for fashion businesses to focus on digital and technological creativity. In a Forbes article (Roberts-Islam, 2020), Matthew Drinkwater discusses how the workload for the team at the Fashion Innovation Agency ‘escalated sharply during the crisis’ due to a ‘dramatic shift towards digital solutions’ throughout quarantine. The continual demand for fashion as well as fashion week throughout lockdown, led to more fashion companies utilising online platforms to receive consumer engagement.
In addition to digital skills, brand differentiation and authenticity are also key elements for creative directors to bridge the gap between creativity and commerce in a fashion business. Virgil Abloh, former managing director of Off-White and artistic director at Louis Vuitton, is an example of how creative directors can drive commerce and innovation through art. In his biography by the Business of Fashion, Virgil Abloh ‘reinvented the role of a creative director’ and is compared to Karl Largerfield as a ‘multi-tasking creative genius’. Combining and integrating artistic expression with commerce is necessary for fashion businesses to develop.
In the United Kingdom, the fashion industry is the biggest creative industry (Donaldson, 2016) and was ‘worth £26 billion & 800,000 jobs to the economy’ in 2016 according to the British council. Before the COVID-19 pandemic, the industry was ‘generating $2.5 trillion in global annual revenues’ (Amed et al. 2022) according to research in the 2023 State of Fashion by McKinsey. These statistics demonstrate the extensive size of the industry with thousands of jobs in areas of fashion just in the United Kingdom.
The recent State of Fashion report by McKinsey & Co also explains that the non-luxury sector may have difficulty in achieving significant progress in 2023 and success in different sectors in the industry varies globally. Depending on a country’s economy and general accessibility to technological platforms, this may influence the performance of digital and luxury clothing markets in a particular location. As artificial intelligence continues to develop, it is predicted that generative AI could add ‘up to $275 billion to the apparel, fashion, and luxury sectors’ operating profits, according to McKinsey analysis’ (Harreis, et al. 2023).
Amed, I. et al. (2022). The State of Fashion 2023: Holding onto growth as global clouds gather. McKinsey & Company
https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion
Donaldson, A. (2016). The Power of Fashion. British Council
https://www.britishcouncil.org/research-insight/power-fashion
Harreis, H. et al. (2023). Generative AI: Unlocking the future of fashion. McKinsey & Company
Roberts-Island, B. (2020). Virtual Catwalks and Digital Fashion: How COVID-19 Is Changing The Fashion Industry. Forbes.
Virgil Abloh: Bof 500: The people shaping the global fashion industry. (2022). The Business of Fashion.
https://www.businessoffashion.com/community/people/virgil-abloh