Profit blog
The profit pillar plays a crucial role within the ever-changing fashion industry. Without profit, it would be almost impossible for a business to run. The fashion industry is ‘one of the world’s largest and most fragmented industries’, (McKinsey) making the fashion industry incredibly important due to its profitability. Although after COVID the industry’s worth decreased from $2.5 trillion to $1.7 trillion, according to Mckinsey. This may perhaps be due to consumers not being as confident buying products from different brands. Nevertheless, profit is still a prioritized pillar within the market and every business ultimately strives to make a profit.
The fashion industry is ‘divided into multiple product segments and categories’ such as sustainable fashion, luxury fashion ETC. It is clear to understand that these segments are driven by consumer trends, possibly making it harder for other segments to acquire profit. For example, in the most recent years sustainable fashion brands have increased as consumers have become more educated about the environment leading to ‘fast-fashion houses suffering [from] decline’ (Louise Newstead, 2023) and this is due to environmentally conscious consumers. Although fast fashion companies still obtain their profit as there are ‘affordable prices and instant gratification for consumers’ (Adam Hayes, 2023). Whereas luxury brands such as Chanel also obtain their profit by creating an ideology of their products being extremely exclusive and rare through their marketing, allowing them to have more overpriced products and consumers wanting them.
There are multiple uncertainties within the fashion industry and its economy. COVID-19 was a long uncertainty for the industry’s economic status. The pandemic impacted many businesses, leading to many people losing their jobs and consumers not buying as much due to the lockdown; declining in profit. Arguably, this gave the fashion industry an opportunity to explore a whole new segment of fashion. The fashion industry pre-COVID, was ‘labelled out of date, broken and wasteful’ (Forbes) However, COVID has allowed fashion brands to enhance their knowledge about digital fashion and creativity. Coperni, for example took the world by shock in 2022 where they sprayed a dress on the famous model Bella Hadid, giving consumers an insight on how innovating the fashion industry is.
Although, not only adapting to trends helps being competitive within the industry; creative directors also play a crucial role in the industry. For example, the British rapper Skepta, debuted his work for Mains during this year’s London fashion week. He created ‘staple, crazy, beautiful, wearable clothes’ (Vogue) which made consumers extremely happy allowing the brand, which had been ‘put on hold’ to be ‘revived’ again.
Berg, A., Hedrich, S., & Leon, J. (2017). The two faces of fashion-industry performance. The McKinsey Quarterly. https://www.mckinsey.com/industries/retail/our-insights/the-two-faces-of-fashion-industry-performance#:~:text=Fashion%20is%20one%20of%20the,measured%20as%20economic%20profit%2C%201
Berg, A., Hedrich, S., & Leon, J. (2017). The two faces of fashion-industry performance. The McKinsey Quarterly. https://www.mckinsey.com/industries/retail/our-insights/the-two-faces-of-fashion-industry-performance#:~:text=Fashion%20is%20one%20of%20the,measured%20as%20economic%20profit%2C%201
Newstead, L. (2023). Fast-fashion houses suffer decline in brand value, while luxury and sporting brands see growth. World Trade Marker View. https://www.worldtrademarkreview.com/article/fast-fashion-houses-suffer-decline-in-brand-value-while-luxury-apparel-holds-strong#:~:text=News%20%26%20Analysis-,Fast%2Dfashion%20houses%20suffer%20decline%20in%20brand%20value%2C%20while%20luxury,and%20sporting%20brands%20see%20growth&text=Brand%20Finance%27s%20latest%20report%20provides,uncertainty%20and%20environmentally%20conscious%20consumers.
Hayes, A. (2022). Fast Fashion Explained and How It Impacts Retail Manufacturing. Investopedia. com [online], 16. https://www.investopedia.com/terms/f/fast-fashion.asp
Roberts-Islam, B. (2020). Virtual catwalks and digital fashion: How COVID-19 is changing the fashion industry. Forbes. https://www.forbes.com/sites/brookerobertsislam/2020/04/06/virtual-catwalks-and-digital-fashion-how-covid-19-is-changing-the-fashion-industry/
Leitch, L. (2023). British music artist Skepta revives Mains fashion brand. Vogue. https://www.voguebusiness.com/fashion/british-rapper-skepta-revives-mains-fashion-brand