Profit Pillar
Profit may be the most important pillar of the fashion industry- considering that it is one of the biggest industries worldwide at $1.7 trillion in 2021 (McKinsey, 2022). Though the industry saw recent decline during the COVID-19 pandemic, economic recovery is forecast and many sectors of the industry are already seeing recovery. Luxury brands in particular are seeing significant profits, exemplified by Gucci which reported over $10 billion in revenue in 2022. Despite a global recession on the horizon, the luxury sector is projected to grow 5-10% in 2023. In contrast, the rest of the fashion market is projected to grow slowly at between -2% and 3% as they do not have the protection of wealthy shoppers against inflation (Amed et al, 2022). To remain competitive in the current economic climate, brands are forced to find new strategies as highlighted by Mitterfellner (2019), who outlined ‘Desire, Digitalisation, Diversity and Design’ as four key aspects in Saint Laurent’s rebranding. Digitalisation is a particularly important aspect for brands to currently consider, as people increasingly shop online. Generation Z, in particular, enjoys online shopping, as found by Choudhury (2014): ‘young people have been the majority shoppers online’. Brands must therefore consider the online purchasing experience they provide as well as their physical stores, as a poorly functional website is likely to create customer dissatisfaction and discourage purchasing decisions. However, this emphasis on function and profit raises concerns about the creativity of brands and their creative directors, as expressed by Alber Elbaz, who felt that he had lost feeling and heart when he became a creative director as opposed to a courtier- describing the role as having ‘to create- but mostly direct’ (Dacre, 2015). Mitterfellner (2023) outlined the roles of a creative director as ‘brand ambassador, manager of teams, brand visionary and lead fashion designer’, clearly showing the diminished role of creative design even in a brand’s creative director. This issue may be difficult to bridge, as a brand cannot remain profitable while only creating fashion to be creative. However, creativity and commerce in fashion are not necessarily at odds. Creative directors may not solely exist to create, but they may hold large power and influence over brands. For example, Burberry’s creative director was recently appointed also to the position of CEO, retaining his position as creative director while explicitly holding power over the brand. In this way, Burberry has stated that creativity is a priority of the brand- effectively bridging the gap between creativity and commerce by bringing the two most important roles together.
References:
Choudhury, D., & Dey, A. (2014). Online shopping attitude among the youth: A study on university students. International journal of entrepreneurship and development studies, 2(1), 23-32.
Mitterfellner, O. (2023). Luxury Fashion Brand Management: Unifying Fashion with Sustainability. Taylor & Francis.
McKinsey’s ‘State of Fashion 2023’, Imran Amed https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/state%20of%20fashion/2023/the-state-of-fashion-2023-holding-onto-growth-as-global-clouds-gathers-vf.pdf
The Lyst Index Q2 2023 https://www.lyst.com/data/the-lyst-index/q223/
Business of Fashion: Floriane de Saint Pierre on Creative Leadership https://www.businessoffashion.com/articles/workplace-talent/floriane-de-saint-pierre-on-creative-leadership-032c/