profit blog
Profit in fashion is dependent on a wide variety of factors, including marketing, innovation through design, trends and popularity. Currently, the industry is heavily dominated by fast fashion, which holds many ethical and economic issues, having an impact on profit in fashion, creating difficulty and tension for creative directors when it comes to bridging the gap between creativity and commerce when designing. “The fashion apparel industry has significantly evolved, particularly over the last 20 years. The changing dynamics of the fashion industry have forced retailers to desire low cost and flexibility in design, quality, and speed to market, key strategies to maintain a profitable position in the increasingly demanding market”.
“The European fashion industry sales equalled approximately €170 billion in 2012, with more than 181,000 companies, of which the 30% are Italian companies (SMI (Sistema Moda Italia), 2013).” It is a global industry that spreads worldwide, creating vast amounts of competition and, furthermore, sustainability issues with elements like supply, demand and sourcing. Since Generation Z possesses such high ethical standards; is the main target market and contributor to the industry, companies must, more now than ever, “reorganise their supply networks, searching for a new balance between local and global sourcing and production”, whilst remaining distinctive and popular.
“Fashion is a “cross-sector concept” that encompasses several industries, such as apparel, footwear, leather, jewellery, perfumes, and cosmetics (Brun et al., 2008).” The various sectors of the fashion industry all strive to find a unique and individual style, in order to remain competitive in such uncertain economic times. For example, it is anticipated that the luxury sector of fashion will outperform the rest of the industry, as patterns show wealthy shoppers continue to travel and spend, estimating growth of 5-10% in 2023, remaining more insulated from the effects of hyperinflation (Mckinsey state of fashion 2023).
Other sectors of the market are determined to struggle due to our unstable economy. For example, “McKinsey analysis of fashion forecasts projects relatively slow sales growth of between –2 and +3 percent, weighed down by a contraction in the European market (expected to shrink between 1 and 4 percent)”. This is due to inflation, stemming from mass production and consumption. Therefore, in order to create enough profit, it is vital that creative directors remain distinctive and relevant.
Bhardwaj, V., & Fairhurst, A. (2010). Fast fashion: response to changes in the fashion industry. The international review of retail, distribution and consumer research, 20(1), 165-173
Macchion, L., Moretto, A., Caniato, F., Caridi, M., Danese, P., & Vinelli, A. (2015). Production and supply network strategies within the fashion industry. International Journal of Production Economics, 163, 173-188.