Profit

Fashion and profit are intertwined and no industry can be separated from profit. The word fashion is noble, but essentially fashion is for profit.

Food, clothing and shelter are necessities for people , so the fashion industry is one of the biggest industries in the world. It is one of the key factors driving the global economy. After the Covid-19 pandemic in the last few years, the whole world’s economy has been hit hard, and the fashion industry has not been spared either, according to Euromonitor the global apparel and footwear market size shrinks According to Euromonitor the global apparel and footwear market size shrunk in 2020 by -18.1% (to $1.45 trillion). (Euromonitor, June 2021)

LVMH is by far the highest market capitalisation apparel company at around $479bn. LVMH tripled in size from 2016 to 2022. (Statista, May 2023) How has it remained highly profitable in such turbulent economic times? Firstly LVMH is involved in several industries like Christian Dior, Givenchy, Fendi, Bulgari, TAG Heuer, Sephora, Moët & Chandon, Dom Pérignon, Hennessy, and many others.This diversification allows the company to capture different consumer preferences and not run into a crisis by relying too much on one brand or division. Secondly, LVMH has a very precise brand positioning, which is aimed at the middle class and above, and the luxury sector is perhaps the least affected because the affluent will continue to buy luxury goods and will not be greatly affected by the poor economic situation.LVMH’s Louis Vuitton has built up a reputation for craftsmanship and exclusivity, and has gained a high degree of brand loyalty and global recognition from its consumers.LV has a very strong brand name. LV has a strong capacity for innovation and LVMH invests heavily in R&D, design and marketing. ” The French luxury goods conglomerate LVMH Group, primarily known for its fashion house Louis Vuitton, spent around 9.5 billion euros in advertising and promotion costs worldwide in 2022. The value corresponded to around 12 percent of LMVH revenue that year.”(Statista. January 2023) From this data it is clear that marketing is vital for a brand.

There is a big gap between creativity and business, designers have a lot of creativity but maybe the consumers won’t pay for it because the consumers most directly see what the product looks like and won’t look deeper into the meaning and background behind the product, so they need a person to show the story to the consumers and the Creative director is that person. The creative director needs to understand the visual DNA of the brand and re-present it in a modern way that meets the aesthetic needs of the current clientele and the business prospects of the management. (Mitterfellner, O 2023)

Reference List:

Euromonitor. (n.d.). Global Recovery Tracker: Q2 2021. [online] Available at: https://www.euromonitor.com/global-recovery-tracker-q2-2021/report [Accessed 23 Oct. 2023].

Smith, P. (2022). Clothing Companies Market Capitalization 2022. [online] Statista. Available at: https://www.statista.com/statistics/1293538/clothing-companies-market-cap/.

Statista. (n.d.). LVMH Group’s ad spend worldwide, 2019. [online] Available at: https://www.statista.com/statistics/410677/lvmh-group-s-ad-spend-worldwide/.

Mitterfellner, Olga. Luxury Fashion Brand Management : Unifying Fashion with Sustainability, Taylor & Francis Group, 2023. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ual/detail.action?docID=7260416.

Picture Reference List:

P1: Nast, C. (2023). A Blanket Scarf Is Your Quickest – And Cosiest – Route To Autumn Chic. [online] British Vogue. Available at: https://www.vogue.co.uk/article/scarf-trend-autumn-2023#intcid=_vogue-uk-bottom-recirc_03b469ff-d69d-4ce6-93c5-34d434c43f7c_similar2-3 [Accessed 24 Oct. 2023].