Profit

Fashion, as much as it is considered a form of art, is also a business and thus it measures its success by the profit it makes. The fashion industry represents the 4^th largest industry in the world.

“The revenue of the global apparel market was calculated to amount to 1.53 trillion U.S. dollars in 2022, a slight decrease on the previous year. However, revenue was forecast to increase in 2023, to more than 1.7 trillion dollars.  In 2021, China led the rankings for the highest value of apparel exports. The U.S. was second only to the EU in the value of apparel imports.” (Statista, 2023)

The fashion industry grows exponentially each year despite adverse geopolitical and economic circumstances such as the current energy and cost of living crisis, in part caused by the ongoing war in Ukraine.

These factors are affecting the way we shop and behave as consumers—we are unlikely to see massive growth on the graphs if people are struggling to meet their most basic needs. Brands have to take this information into consideration while trying to target and approach their customers in an appropriate manner, which, with high saturation on the market, has proven to be increasingly difficult every year. Therefore, creative directors should not only strive to design products with fresh, unique ideas, but they must also foresee where demand is going to be and what specifically customers will desire in order to be able to sell their products.

“In 2023, the global fashion industry will need to weather inflation while finding opportunities in shifting consumer patterns, channel and digital marketing strategies, and manufacturing approaches.” (McKinsey, 2023)

If we see a decline in one sector, we might yet observe a rise in another. For example, recent years have brought about an increase in the prevalence with which clothes and accessories are purchased from second hand markets instead of conventional retail stores. This trend is caused mainly by the environmental impact the fashion industry has had on the planet and, to a lesser extent, by the prices being more affordable, as many high fashion brands continue to raise their prices annually.

“A Chanel bag nearly doubled in price in the past five years.” (Forbes, 2022)

Only time will tell how these phenomena are going to impact the luxury goods sector in the future.

Bibliography:

1. Smith, P. (no date) Topic: Apparel market worldwide, Statista. Available at: https://www.statista.com/topics/5091/apparel-market-worldwide/ (Accessed: 23 October 2023).
2. Figure 1, Published by  Statista Research Department and 16, A. (2023) United Kingdom (UK): Fashion market revenue 2018-2027, Statista. Available at: https://www.statista.com/forecasts/480843/e-commerce-revenue-fashion-forecast-in-the-united-kingdom (Accessed: 23 October 2023).
3. The state of fashion 2023: Holding onto growth as global clouds gather (2022) McKinsey & Company. Available at: https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion (Accessed: 23 October 2023).
4. Loeb, W. (2022) Luxury brand prices rise sharply – will it cut demand?, Forbes. Available at: https://www.forbes.com/sites/walterloeb/2022/02/21/luxury-brand-prices-rise-sharply–will-it-cut-demand/ (Accessed: 23 October 2023).
5. Figure 2, Chanel classic flap medium lambskin gold hardware – luxury shopping (2022) Luxury Shopping -. Available at: https://loveluxury.co.uk/shop/chanel-classic-flap-medium-lambskin-gold-hardware-04/ (Accessed: 23 October 2023).