Profit
Profit is the third pillar of fashion business school. Cooperating with the other three pillars, this explains about ‘Fashion Means Business’(Liz Gee 2023). It has been seen as the pillar of how and why the fashion business should create value with its resources, as explained by Liz Gee. Using her own words: “Business should be rewarded for harnessing planet and people resources to generate value in ways that respect the whole ecosystem.”
The fashion industry pervades everyone’s lives, it includes many branches, such as Footwear, Clothing, Luxury Fashion and Accessories. These daily objects and fashion items have a huge demand from consumers which result the fashion industry generating great profit each year. According to Euromonitor-Passport, the global market size of Fashion vending in 2022 was 11.6 USD million, Fashion Direct selling was 8,506.9 USD million, and Fashion E-commerce was 590,260 USD million. This totals 598,778.5 USD million, demonstrating the fashion sector’s significant impact on worldwide economies and consumer demand for the fashion business.
However, discussing the fashion industry, it’s not only the retailing part that should be embraced, sectors such as the supply chain the production process and the labour situation are also core of the fashion industry. Fashion brands are experiencing the problem of supply shortages because the manufacturing sector of the industry is lacking workers who are already skilled caused of the bounced back activities following the pandemic, since the industry is gradually awakening (Drapers 2023). It’s being suggested that the manufacturing model in the fashion industry should be changed as the biggest difficulties of the fashion system. The model could be renewed with vertical integration, nearshoring, and small batch production, supported by digitization (Mckinsey 2022).
To survive and stay competitive in the pandemic, brands need to stay conscious of the business environment and change the strategy of marketing and branding. For example, COVID-19 is a representative period of uncertain economic times, e-commerce has a special standout performance due to the restriction on mall shopping and outgoing. In 2019, the world market size of the fashion industry’s e-commerce was only 395,104.5 USD million, when the covid-19 started in 2020, the world market size of the fashion industry’s e-commerce in 2020 rose to the number of 502,932.4 USD million. If brands focus on their online purchasing services, they could stay competitive in the market as they stick to the needs of the consumer and fill gaps in the market by switching the distribution strategy.
The relationship between creativity and business needs to be balanced for a brand, to keep its innovation in fashion but also keep making profit so it can generate value. This role could be done by the creative director, an example would be Alessandro Michele the post-creative director of Gucci. He used his own aesthetics and creativity to reshape the brand identity and succeed in a few collaborations, this helped the brand expand its market, attract consumers and balance the value of a brand between creativity and commerce.
Reference list
desk, fashion (2022). Alessandro Michele. [online] Drapers. Available at: https://www.drapersonline.com/people/power100-2022/alessandro-michele.
Euromonitor (2023). Euromonitor . [online] login.euromonitor.com. Available at: https://www.portal.euromonitor.com/statisticsevolution/index.
Hill, R.J. (2023). UK textile manufacturers tackle the skills shortage. [online] Drapers. Available at: https://www.drapersonline.com/insight/analysis/how-uk-manufacturers-are-recruiting-a-new-generation [Accessed 23 Oct. 2023].
Liz G., Dean. (2023). Welcome to Fashion Business School [Power Point] University of the Arts London: London College of Fashion.
McKinsey (2022). The State of Fashion 2023: Holding onto growth as global clouds gather. [online] McKinsey. Available at: https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion.
Nast, C. (2022). How did Gucci become the most influential brand of 2022? [online] Vogue France. Available at: https://www.vogue.fr/fashion/article/gucci-most-influential-brand-of-2022.