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Jan 12, 2017

Fast fashion and "fast fashion"

Yesterday, I posted to my social media accounts a link to this piece, which explains the troubles American casual fashion brands are going through. A friend responded, confused and distressed. I thought I would post her question and my response as I thought it would help other readers too.

Here we go:

I find this partly confusing and partly distressing. Everything I've read about fast fashion so far has indicated a willingness on behalf of these retailers to cut down production costs to the point of being unethical in an effort to provide frequent and cheap fast fashion to the consumer, thereby pocketing a comfortable profit. I'm confused because this article says that's not working for them either. I assumed it was. And I am distressed because it says Old Navy is the least worse off which means even though the above model isn't working for them as a whole, they're still going to keep pushing it because it sort of worked for Old Navy. I can't think of how this is anything but a lose-lose situation .. if they stay open with this business model pushing for fast fashion then the planet collectively loses not to mention all those labourers working on sub par conditions in under developed and developing countries. But if they close, it's a hit to the economy and thousands of people lose their means of earning a living. All because we don't want to pay the true cost for our clothes. I'm glad I'm not an economist because I really can't wrap my head around this.

Your confusion arises from this (common) misconception: Everything I've read about fast fashion so far has indicated a willingness on behalf of these retailers to cut down production costs to the point of being unethical in an effort to provide frequent and cheap fast fashion to the consumer, thereby pocketing a comfortable profit. Actually, it's not about direct production costs, i.e., labour costs. Fast fashion is about, well, being fast. I didn't know about any of this until I studied the industry last year, so there's no shame in your not knowing this :) This bit from the article is the crux: Thorbeck and Hausman’s analysis on the
American brands may call themselves fast fashion just because they want to project themselves as one of the cool kids but they know fully well that they fall far far short. In fact, the article's subtitle itself hints that American brands aren't fast fashion. It used to be that fashion brands had 4 seasons for which to plan 4 collections – Spring, Summer, Fall and Winter. The number of collections per year has increased now but the broader story remains the same. These brands plan their design, procurement, manufacturing and supply chain 6-12 months in advance. Can you imagine – a designer needs to work on winter wear a year in advance when they don't even know what the trend of the day might be? And given that they spend so much money up front, they naturally need to manufacture a specific design in large scale in order to spread the cost of that design over a large quantity of stock. The terrible thing about this model is that, when a specific design fails, brands may need to liquidate it at rock-bottom prices (in order to create space for new stock on store shelves) as low as 5% of original retail price? Even worse, because they cannot predict how much of a certain design may sell, sometimes they leave money on the table when a certain popular design actually sells out. Viewed through this lens, Zara and H&M are far better for the environment than traditional brands in terms of minimising wastage. I don't know what their impact is on working conditions but I can't imagine they could be worse than traditional brands. If anything, they could be better because, with their efficiencies in other areas, they don't need to cut to the bone on the labour front. This is not to say that emulating Zara is easy. Other brands have claimed to be trying for years. Did that help?

 

Posted at 12:52 PM in Strategy & business models | | Comments (0)

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