PROFIT
Like all industries around the globe, the fashion industry is driven by profit when unveiled to the very core, despite of its artistic, cultural, glamorous appearance. In fact, even sustainable fashion brands have to admit, that without profit as one of their fundamental aims, ethical claims will be difficult to realise as profit guarantees the satisfaction of other stakeholders.
As stated in Mckinsey’s State of Fashion report (2017), the fashion industry would be the “world’s seventh-largest economy if ranked alongside individual countries’ GDP”. There is no doubt on this industry’s contribution to the global economy, with revenue of the apparel market worldwide reaching 1.74 trillion U.S dollars in 2023, as shown on Fig 1. Despite the unsurprising decline from 2020 to 2022 due to the global pandemic, estimations on the future revenue growth from 2023 shows an escalating trend.
According to Fig 2, the global fast fashion market was estimated to worth approximately $123 billion dollars in 2023. With an ascending trend, this market is forecasted to reach $184 billion dollars in 2027.On the other hand, many luxury brands experienced negative influences from global inflation as well as post-pandemic economic declines. However, LVMH has reported “20 percent revenue growth to €56.5 billion” compared to the year before (Mckinsey & Company, 2023). Indication here is that consumers with higher income tend to remain loyal to luxury brands with premium quality and services while “value-conscious consumers are trading down into value” (Mckinsey & Company, 2023). In order to increase competitiveness, brands in downfall should consider flexible pricing strategies based on consumption habits, introduce digitalisation for promotion, effective inventory management and reallocate labour resources.
Creative directors in a fashion brand beholds multiple responsibilities and job roles. According to Mitterfellner and Olga (2023), it is their duty to not only lead fashion designers, but to have artistic visions, ensure collections generate good profitability, and to be the brand’s ambassador. An example of bridging between creativity and commerce would be Karl Lagerfeld at Chanel (Mitterfellner & Olga 2023). He was always greatly celebrated and shown as the face of the brand. His contribution to Chanel, other than avant-garde designs and professional management, was being a classic, charismatic persona that continually encourages consumers’ desire for Chanel even after his death. It is fair to say that Karl integrated his iconic image as a designer, into commercial aims of the business.