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Issue: Fashion Industry Fashion Industry

Issue: Fashion Industry

                     Fashion Industry

                         By: Vickie Elmer

                                                                         Pub. Date: January 16, 2017
                                                                     Access Date: November 22, 2022
                                                                      DOI: 10.1177/237455680302.n1
Source URL: https://businessresearcher.sagepub.com/sbr-1863-101702-2766972/20170116/fashion-industry
                                                     ©2022 SAGE Publishing, Inc. All Rights Reserved.

Can it adapt to changing times?

Executive Summary
The global fashion business is going through a period of intense change and competition, with disruption coming in many colors: global
online marketplaces, slower growth, more startups and consumers who now seem bored by what once excited them. Many U.S. shoppers
have grown tired of buying Prada and Chanel suits and prefer to spend their money on experiences rather than clothes. Questions about
fashion companies’ labor and environmental practices are leading to new policies, although some critics remain unconvinced. Fashion still
relies on creativity, innovation and consumer attention, some of which comes from technology and some from celebrities.
Here are some key takeaways:
High-fashion brands must now compete with “fast fashion,” apparel sold on eBay and vintage sites.
Risk factors for fashion companies include China’s growth slowdown, reduced global trade, Brexit, terrorist attacks and erratic
commodity prices.
Plus-size women are a growing segment of the market, yet critics say designers are ignoring them.

Overview
José Neves launched Farfetch during the global economic crisis of 2008,
drawing more on his background in IT and software than a love of fashion. His
idea: Allow small designers and fashion shops to sell their wares worldwide
on a single online marketplace. The site will “fetch” fashion from far-off places.
Despite having no investment backing until 2010, Farfetch has grown
dramatically. It employs more than 1,000 people in 10 offices and has
1
secured six rounds of investments. More than 400 boutiques sell on the site.
Farfetch relies on creative exclusivity and fashion brands like Dolce &
Gabbana and Alexander McQueen . It carries an eclectic mix of new and
vintage items, jewelry, bags, iPhone cases, $150 candles, art and fashion
books.
“The flavor, the fuel of the brand is a boutique feel. It’s all about uniqueness of
expression, of individual taste,” said Neves. “But I don’t think that’s
incompatible with big numbers.” 2
Farfetch has 410,000 Instagram followers and 2016 revenue of more than
$800 million, up from around $500 million in 2015. 3
It’s a bright spot in a fashion industry fraught with change, challenges and
criticism—over “fast fashion” ending up in landfills, the treatment of apparel
workers, the exclusive nature of fashion that leaves many feeling left out and
the accusation that fashion snubs or marginalizes larger women.
Fashion lines are easier to start and harder to sustain than ever before.
Innovation is upending expectations: Companies employ 3-D printers to
create running shoes and recycle salmon skins into wallets and accessories.
Fashion, along with the rest of the luxury-goods sector, is contending with what
the consulting firm Deloitte dubbed “the decade of change”: new digital
channels and platforms, China’s growing middle class and the rise of
Millennial buyers. 4
First lady Michelle Obama wears an Atelier Versace dress as
she and President Obama greet Italian Prime Minister Matteo With fast fashion from H&M, Zara and others hustling new merchandise to
Renzi at the White House in October. (Leigh Vogel/WireImage) market many times a year, the fashion sector has sped up its production cycle
—with a see now, buy now approach to runway shows that worries many
designers. “Fashion is recognizing the changing desires and rhythms of
consumers and figuring how to respond to that,” says Robin Givhan, The Washington Post’s fashion critic, who won a Pulitzer Prize in
2006.
Yet parts of the global fashion industry are slow to adapt to new consumer trends and digital selling. Some experts say fashion has fallen
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out of fashion in some cities and demographics. Consumers today may skip shopping for an Italian suit in favor of a trip to Italy or an Italian
film festival. They are spending less on fashion in developed countries and more in emerging nations such as Vietnam and India. 5
Fashion is a labor-intensive business that is moving to online sales, fittings and previews. High fashion brands such as Giorgio Armani ,
Christian Dior and Chanel must compete with apparel sold on eBay and vintage sites such as LuxuryGarageSale.com . Questions
persist about whether people will wear the same clothing in different countries. And yet the sector continues to serve as a cultural
connector to our past and our identities, a way to show status and a way to fit in with our peers at work.
Disruption has been rumbling through the fashion sector, and its cousin the retail chains, for years, as online sales take a larger share and
startups create new products or services.
“The fashion industry is suffering because it’s not listening to the consumer,” says Pamela Danziger, author of several books on luxury
markets and consumers, who leads the luxury consultancy Unity Marketing. She cites “very deep and structural problems,” ranging from
ignoring women over 40 and the “experience economy”—consumers’ increasing preference for spending on experiences—to simply
making too many clothes. “We’re just drowning in all this [low-quality] apparel,” she says,

Nike Leads U.S. Apparel Brands in Revenue
Ralph Lauren, Old Navy trail by more than $20 billion

Source: Dhani Mau, “The 10 Biggest U.S. Apparel Companies,” Fashionista, July 2, 2016, http://tinyurl.com/zvhkgwy

Nike is the undisputed leader of American apparel brands, bringing in well over $20 billion, more than second-
and third-place fashion companies Ralph Lauren and Old Navy. Activewear brand Under Armour raked in $3.1
billion and solidified its status as the fastest-growing brand in that category.

U.S. clothing and accessories stores sold around $254 billion in 2016, about the same as in 2015, according to the U.S. Census
Bureau. 6 (The numbers don’t count fashion sales by department stores, which have declined for years.) Globally, fashion generated
$1.69 trillion in revenue, and that is expected to increase to $1.73 trillion in 2017, according to the market research firm Euromonitor
International. Despite growth in many developing countries, that’s essentially unchanged from the $1.7 trillion rung up in 2012. 7
Most urban consumers will spend more on clothing and fashion by 2020, but will allocate a larger share of their budgets to other items
such as leisure. 8
Fashion includes many styles and price points. At the top is haute couture, typified by Chanel, Christian Dior, Prada and other brands
whose prices and focus appeal to wealthy consumers or rising stars. Couture is a half step lower in the hierarchy, followed by “bridge,” a
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fast-disappearing category that is fine fashion but not as elegant and pricey as couture. Ready-to-wear clothing is sold at discounters and
department stores for the masses. The newest category is “athleisure,” athletic apparel that may be worn to a pub or the office.
Fashion also refers to an array of accessories including belts, scarves, coats and swim suits. It encompasses formal or evening wear,
sports and athletic attire, and often includes jewelry and shoes.
Fashion industry sales grew by no more than 2.5 percent in 2016, half the level of the previous decade. 9 Slower growth is expected to be
the norm, and many major companies are cutting costs or restructuring operations. While 40 percent of fashion executives expect
improvements in conditions for the sector, volatility in the global economy plus competition from online companies are their biggest
challenges, according to “The state of fashion,” a 2016 report by the consulting firm McKinsey & Company. 10
Among the risk factors for fashion companies are a slowdown in China’s growth, reduced global trade, the United Kingdom’s vote to leave
the European Union, the threat of terrorist attacks and erratic commodity prices, the report found. 11 “As volatility becomes the new normal
in 2017, fashion companies could see all dimensions of their business affected,” the report’s authors wrote.
A prime example is Ralph Lauren , which in June said it would close 50 stores and eliminate 1,000 jobs. One quarter of its annual
revenues come from department stores, which are themselves closing many locations and discounting more merchandise. With
department stores declining Ralph Lauren will sell less to them in 2017. 12
Keeping fashion relevant may be trickier than ever amid divergent interests, shopping patterns and choices based on consumers’ ages
and life stages. “Fashion people are out of touch,” says Danziger, adding that jeans and jackets are fine for most of her business
meetings. (See Short Article, “For Many Workers, Casual Is Cool.”)
Yet discounting seems the norm, and consumers expect virtually everything to go on sale. “Luxury shoppers used to be embarrassed to
compare price or ask about price, and it’s commonplace today,” said Robert Burke, a fashion and retail consultant. 13
Now, when consumers look online to compare prices, they see the Jimmy Choo shoe that interests them—and a variety of knockoffs. This
helps to erode brand loyalty. “When was the last time brand was important, really? It might have been right before the recession when
aspirational luxury was on the rise,” said Gabriella Santaniello, analyst with the retail research firm A Line Partners. 14
U.S. consumers spend on average 3.1 percent of their budgets on clothing, though those age 34 and younger spend much more,
according to federal data. 15 Clothing remains the No. 1 purchase for holiday gifts, but its share has been stagnant at around 50 percent
since 2011, while jewelry, liquor and food steadily rise, a Deloitte study found. 16
In the experience economy, people spend more on wine and travel or an evening out with friends than on clothing, experts said.
“On the whole, conditions have never been more challenging for luxury brands,” said Fflur Roberts, a Euromonitor analyst, noting
consumers’ “massive push” toward luxury experiences at restaurants and hotels. Roberts expects China to overtake the United States
shortly as the largest market for luxury goods, which includes cars, travel and fashion. 17
For many decades, the fashion sector has offered up the style or styles for a particular year. “Most brands are in the business of telling
people what it is they desire before they know,” Givhan says. But in recent years, consumers have become more independent and less
likely to swoon and buy whatever the latest style is from Paris or New York. “People used to ask, ‘What’s going on with hemlines?’ Now the
hemline is whatever hemline is flattering to you,” says Givhan.
For those who want to inject change in their wardrobe, a growing number of companies will rent work attire or VIP celebration duds. Rent
the Runway offered an early version of the sharing economy with fancy gowns and dresses, then in 2016 added a women’s work
wardrobe with an “Unlimited” plan. Similar to Netflix, it allows women to borrow three items at a time for as long as they want for $139 a
month. 18
Some travelers prefer to rent a suit or running shoes. This “bag-free, hassle-free” trend is fueled by hotel chains and a handful of Uber-like
startups that provide a suitcase of clothing to travelers when they arrive. 19
With the average American woman now wearing a size 16 to 18, plus-size women are increasing their clothing budgets faster than women
wearing size 6 or 8. 20 “Many designers, dripping with disdain, lacking imagination or simply too cowardly to take a risk—still refuse to
make clothes for them,” wrote Tim Gunn, co-host of the TV show “Project Runway” and former chief creative officer for Liz Claiborne. He
called the problem the mythology of “glamour and thinness” and said designers must create clothes for women in a variety of shapes and
sizes. 21
A few fashion companies are starting to expand their offerings, and one Virginia woman started ResellXL in 2016 to sell denim
sportswear, designer evening gowns and the St. John’s Knits brand in larger sizes. 22

“Fashion is really about passion and creativity, just like music or dance or poetry,” first lady Michelle Obama said in welcoming design
students to the White House in 2014. “For so many people across the country, it is a calling; it is a career. It’s the way they feed their
23
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23
families.”
Millions of jobs have been created in the textiles, clothing, leather and footwear industries, mostly in
developing countries and mainly for women. At the same time, around 80 percent of apparel jobs have
disappeared in the United States from 1990 to 2011. 24 Four countries benefited most from shifts to low-
cost production centers: China, India, Brazil and Indonesia. In 2010, China became the largest exporter of
clothing and textiles, accounting for more than one-third of worldwide production and 11.2 million jobs. 25
Women hold more than two-thirds of jobs in global apparel manufacturing, according to the International
Labour Organization, which notes that pay remains low; in several countries they earn only $75 to $300 a
month despite working long hours. And workers still face hazardous conditions in apparel factories, long
after a 2012 fire in a Bangladeshi garment factory killed more than 100 workers. 26
Despite low factory wages, many in the fashion business do well. Profit margins for luxury apparel and
accessories average 24.8 percent of sales, higher than high-end cars or jets or hotel companies,
according to Deloitte data. So apparel and accessories companies remain tempting targets for financial
and buyout firms to acquire. 27
Farfetch is among those buying, including the purchase of British fashion retailer Browns in 2015. In
November of last year, Browns unveiled modern branding and a revised website to showcase its support of Project Runway co-host Tim
new fashion designers and the addition of 68 brands. 28 Gunn says designers should
stop ignoring plus-size women.
The company’s website focuses on luxury fashion—and speed. It adds about 1,000 new listings a week.
Most items are photographed on a model, to help customers better see draping, fit and scale. At Farfetch’s
Los Angeles studio, the goal is for a model to wear clothing for four minutes at most. Purchases average $700 and the company’s sales in
2016 were expected grow 56 percent from the previous year. 29
In late 2016, Farfetch was “firmly on track to become profitable” and founder Neves expected an initial public offering in two or three
years. 30
As the fashion industry tries to adjust to all these new realities, here are the issues under consideration:

Weighing the Issues
Is the fashion industry going out of fashion?
Helen Boxall, a teaching assistant in a small English city, has a degree in fashion design. She loves fashion, yet she’s taking a year off
from buying any clothing.
Her reasons are simple: She agreed to stop clothes shopping as part of a crowdfunding campaign to raise money for the anti-poverty
group Oxfam—and she’s appalled at all the fashion that ends up in landfills or lost in the backs of closets. “Fast fashion is killing the planet,
and we as consumers are voting for it,” she said. 31
She’s part of a global minimalism movement of people who focus on paying off debts and sharing experiences, time or castoff items
instead of gifts. 32 Another version of this shows up as fashion video bloggers who swap clothing or mend it. They also head to charity or
vintage shops for their “haulternative” to the malls or boutiques. 33
People who used to buy at high-end department stores now order their clothing from Target.com or Farfetch, or browse vintage or
independent shops. They seek classic clothing, some made with a flair or a twist, say Katiti Kirondé, a designer and former model who
has worked for fashion companies for 30 years.

Macy’s Remains Dominant Force Among Department Stores
Struggling anchor store J.C. Penney brought in less than half of Macy’s sales

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Source: “Top 100 Retailers 2016,” National Retail Federation, June 30, 2016, http://tinyurl.com/zaman6e

Macy’s is leading the department store pack, bringing in more than twice the sales of Sears and J.C. Penney.
Despite having almost 400 fewer U.S. locations than Kohl’s, Macy’s took in about $7 billion more than the
second-place retailer.

Even though Instagram or social media make it easier to find new clothing or shoes, some consumers are less interested in acquiring
them, some experts said. Those who buy luxury goods are more interested in “more meaningful luxury experiences,” Euromonitor said,
though they may be less inclined to travel to potential terrorist targets such as Paris to experience them. 34
Others are trading their fashionable suits for more comfortable and casual work clothing. The divide between weekday work and weekend
leisure attire is lessening, and there’s lots more stretch and give to fabrics. 35
“Peoples’ relationships with fashion are changing,” says critic Givhan. “People are more interested in technology and experiences and all
those other things. But it won’t necessarily put the fashion industry out of business.”
Consultant Danziger isn’t so sure. “Materialism is falling out of favor,” she says, and fashion brands are used to telling consumers what to
wear. Now, she says, consumers want to choose—and they want a relationship with brands. “Fashion has lost its relevance to the
consumer,” says Danziger.
Even when they buy a handbag, designer logos are losing their allure. “Consumers are becoming less focused on image and more
focused on individuality—especially the younger generations,” said Marshal Cohen, chief industry analyst for market researcher NPD
Group. 36
In the United States, low- and middle-income households have altered their spending patterns since 1984. They spend less on clothing
and more on housing and health care, in part because the relative costs of clothing have declined while health care rose. 37
Fashion “has lost its magic a little for Millennials,” who instead are focused on food, Javier Seara, partner of Boston Consulting Group,
said. 38
Fashion brands are fighting back by personalizing the shopping experience, including opening restaurants based on their brand.
Burberry store employees sometimes organize birthday parties and art visits for shoppers who spend liberally, pouring a glass of
champagne or even flying them to its London fashion show. Cultivating strong relationships with well-heeled customers, using a mix of big
data and personal attention, is important to high-end brands. 39
So is serving coffee, fresh juice or macarons. Gucci operates three artisanal food cafés in Florence, Tokyo and Shanghai, where the first
one opened in July 2015. Giorgio Armani, Roberto Cavalli and Versace followed Ralph Lauren’s lead into restaurants. “The more
experiential you can make your shopping destination, the longer they stay and the more money they spend,” said Dave Moore, president
of retail at Irvine Co., a Newport Beach, Calif.-based real estate developer. 40

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Instagram and other social media—plus celebrities who love to show up wearing something glittery or new—bring fashion to more people
than ever before. “Social media has intensified celebrity influence and helped stars be more involved in fashion,” said designer Zaid Affas,
who began his eponymous clothing line in 2014. 41 (See Short Article, “‘Michelle Markup’ Shows Celebrity Impact.”)
Fashion magazines also are reinventing themselves, with several launching e-commerce sites and even connecting their brand to the hit
animated comedy movie “The Minions.” Vogue and its parent Condé Nast, which owns GQ, Allure and other titles, plans to produce 2,500
videos, bringing the editorial off the page and onto the screen. A series called “Inside the Wardrobe” is devoted to uncovering the secret
styles of actress Suki Waterhouse, singer Lilly Allen and reality TV performer Olivia Palermo. 42
Fashion is in a “time of disruption,” says Kirondé, with robotics and technology influencing the way clothing looks and feels. “It’s a time of
incredible experimentation.”

Is the fashion industry really global?
Latin American retailers buy plenty of fashion clothing made in Italy, China and elsewhere. Increasingly they offer local designers found at
the growing number of South and Central American fashion weeks in Honduras, Peru, Chile and Argentina. “There’s kind of been an
awakening … that you can create amazing products [here] and people will want them,” said Karla Martinez, editor-in-chief of Vogue
Mexico and Vogue Latin America. 43
The global fashion business—clothing designed in Los Angeles or Paris, sewn in Spain or Vietnam and sold in New York, Beijing and
Brasilia—continues to develop international supply chains. And increasingly, it seeks out local makers and designers whose work reflects
the cultures and interests of one city or one group, whether they’re Zambians or U.S. Latinas.
“Some people want that uniqueness and the connection to the producer,” says Givhan. She cited The Row, created by actresses Mary-
Kate and Ashley Olsen, as a brand that proudly embraces its made-in-the-U.S. approach. “The more expensive it is, the easier it is to
produce here,” she says, though the United States lacks the infrastructure and machinery to produce shoes or fine knits.
Fashion houses may be huge multinationals such as Gucci and Chanel, but more likely they are small companies with only a dozen or so
staffers. That is particularly true in Europe, where the average clothing company employs 10 workers. (Yet Italy’s clothing and textile
industries employ almost as many workers as its U.S. counterparts, both close to 400,000.) 44
Through crowdfunding, it’s easy to launch a fashion line based on a product with a focused appeal. One crowdfunding site, Before the
Label, focuses exclusively on fashion startups, and donors receive the apparel or accessory they back. 45
Danziger, the luxury fashion and retail expert, expects the buy-local movement that has changed the food and restaurant business, to take
hold in the fashion world too. “People want to buy items made close to home, made with authentic materials,” she says.
Regional tastes in work attire still vary considerably across the United States and the globe. What works in Washington, D.C., may not in
Seattle, never mind in a business meeting in Shenzhen. McKinsey explores the projected differences in fashion spending in 2025 and
concludes that “growth is also granular and varies by category and city.… What it takes to win in one category in one city is not necessarily
the same as what it will take in a different category in the same city, or … in a neighboring city.” 46
“Cultivating a local clientele can help global fashion players deal with volatility, as they can intensify their focus on one geography during a
prosperous time and shift to another when the first hits a low,” wrote the McKinsey analysts. This means creating limited edition and
specialized products based partly on predictive analytics. 47
Fashion clothing is traded globally and accounted for $483 billion in exports in 2014. In a few countries, including Bangladesh, Haiti and El
Salvador, more than one-third of all exports are apparel and fashion items. In China, clothing accounted for 8 percent of all exports in 2014
and worldwide, it’s 2.6 percent. 48
LVMH , owner of Louis Vuitton, Fendi leather goods and TAG Heuer watches, demonstrated the power of global reach serving as a buffer
49
when business is bad in one region. It reported strong third-quarter 2016 sales in Asia even as they slid in parts of Europe.
Smart brands are adopting a “glocal” strategy that uses their global experience, then tailoring products and services to local markets. So
Louis Vuitton sells its bags and purses from stands in shopping centers in Hong Kong, the United Arab Emirates and Romania, but will not
use this approach in most of Europe or the United Kingdom, where such a sales channel would damage its status. 50
Gucci and Zara are both focused on global growth, with room for local adaptation to reflect tastes and incomes of different cities in China
and elsewhere. Gucci offers a tiered approach to product assortment, so in Chinese cities with less affluent residents, more affordable
leather goods and accessories largely fill the shops, but in Beijing and Shanghai, the higher end items dominate. 51
International travel and the internet both will make fashion a global experience, even for those who stay in one city. The consulting firm Bain
& Company and others point to the growth of e-commerce in luxury goods and fashion. By 2020, 940 million online shoppers are expected

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to spend almost $1 trillion in cross-border e-commerce purchases, including fashion, electronics, food and much more, according to the
McKinsey Global Institute. 52
Those well-heeled consumers will buy many items while traveling, with tourists accounting for almost half of luxury shopping in 2016,
according to the Bain Luxury Report. High-end tourists buy fashions, accessories, jewelry, art and more, driven partly by currency
fluctuations. So the higher value of the yen has led Japanese and Chinese tourists to visit and spend in Hawaii and California, rather than
Tokyo, and travel to many parts of Europe is curtailed because of fears of terrorism. 53
Yet the Chinese soon may want to bypass the United States. President-elect Donald Trump has talked of levying tariffs as high as 35
percent on imports from China and other countries—even though some Trump-brand clothing is made in China. 54 His choice for U.S.
trade representative, Robert Lighthizer, has accused China of engaging in unfair trade and advocated the use of tariffs to promote
American industry. 55
The fashion and retail industries are cautiously waiting to see how or whether Trump’s comments will turn into new policies. Some industry
representatives say if they are enacted, the cost of tariffs could be passed on to consumers in higher prices. 56

Is the fashion business failing at sustainability?
For anyone who tours the fashion recycling plant in Wolfen, Germany, the size and scope of fast fashion, and the willingness to buy and
discard clothing, looks very clear.
The gargantuan I:CO plant, located about 85 miles southwest of Berlin, operates around the clock. It processes apparel dropped off at
recycling banks from H&M stores across Europe and also from Levi’s, Timberland and Nike. About 50 workers per shift sort through the
350 to 400 tons of clothing that arrive daily, mostly in yellow wire cubicles weighing 1 ton apiece. Denim is among the most popular
materials coming through, and also one of the easiest to recycle. 57
Yet recycling, even on such a massive scale, will not solve the global problem of disposable fashions. It clogs landfills in many U.S. cities
and floods Kenya and Rwanda and elsewhere with cheap used clothing. Recycling techniques currently in use won’t work on newer fibers
or clothing made of two or more fibers. Many recycled fabrics may not be turned into clothing again, but must be mashed up and turned
into insulation or other industrial products.

The environmental group Greenpeace has launched a Detox My Fashion campaign to curb pollution from throwaway fashion.

The real solution: “Fashion brands need to urgently rethink the throwaway business model and produce clothing that’s durable, repairable
and fit for re-use,” said Kirsten Brodde, head of the environmental group Greenpeace’s Detox My Fashion campaign. The project works
with dozens of apparel brands to reduce their environmental footprint. 58
Yet with the global growth of fast fashion and buyers’ love of bargain clothing, a change in business models won’t come easily.
“Sustainability is important to some designers, but not all,” says Givhan, adding that consumers bear some culpability in the growth of
fashion throwaways.

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Price, quality and recommendations from family or friends are more important in purchasing decisions than environmental or fair trade
practices, according to a Euromonitor poll. 59
A recent Newsweek article detailed the limits of reusing and recycling fashions. It reported that only 0.1 percent of clothing that is
reclaimed by retailers or donated to charities is turned into new textile fiber. Far more of it is thrown into landfills or incinerators—about 80
pounds per American each year, or double what it was 20 years ago. This has created what the magazine called an “environmental crisis,”
with leached chemicals getting into groundwater and ripped-up textile industries in several African countries. 60
The global clothing recycling industry may not be able to keep up with the new castoffs; inventories are piling up and some recyclers have
gone out of business in the United Kingdom and elsewhere. 61
Consumers are buying more clothing and wearing them less. British women wear clothes only three to seven times, and then may throw
them away, survey shows. 62 In the United States, the average person bought 67.9 garments in 2015, and 7.8 pair of shoes, according to
the American Apparel and Footwear Association, up from 64 garments in 2013. 63
Still, Greenpeace’s Detox Fashion campaign has nudged mainstream fashion to more sustainable practices around water and other
areas, Euromonitor said. “Greenwashing”—an insincere or superficial interest in environmental measures—is still commonplace even as
more companies look for ways to reduce their environmental impact. 64
Some smaller companies make eco-friendly fabric from bamboo, eucalyptus and other wood. and major fashion houses are slowly
changing raw materials and processes. They want to become part of the “circular economy” in which nothing is wasted and everything is
repaired or recycled or reused. This has led startups to develop platforms to resell clothing, among them The RealReal, Poshmark and
Tradesy. 65
Fashion companies, working in organizations such as the Sustainable Apparel Coalition, are sharing resources and creating goals to
reduce their environmental footprints and improve working conditions, and to be transparent about their progress. A number have pledged
to cut water and chemical usage. 66
Yet it’s complicated, because the fashion industry relies on many suppliers, and often, the new more environmentally friendly methods are
more costly—at least initially. “We are not an NGO specializing in sustainability. We are a corporation, and through our creativity we have
to find economically viable solutions,” said Francois-Henri Pinault, CEO of Kering , the fashion giant that owns Saint Laurent. 67
Luxury brands are joining the green fashion initiatives, though often quietly. In June 2015, Kering released its first environmental profit and
loss report, measuring water consumption, greenhouse gas emissions and air pollution. Producing its luxury goods cost the environment
$838 million—half of it from the production of raw materials, such as greenhouse gases from cattle ranching. Yet neither Kering nor other
couture brands “weave sustainability into the mysterious magic” of their brand’s marketing, wrote Givhan in the Washington Post. 68
Greenpeace, in a rating of fashion and retail brands called Detox the Catwalk, said many high fashion brands “avoid tackling the problem
with the seriousness it deserves.” It singled out for praise H&M, Benetton and Inditex, owner of Zara. 69
Progress continues even as discarded clothing piles up. So SOEX Group, which owns the huge 700-worker recycling plant in Wolfen, will
build another one in the United Arab Emirates sometime in 2017. 70 It will employ around 400 people to sort and repackage clothing for
export to Africa, the Middle East and elsewhere. 71

Background
A Tale of Three Women
When Gabrielle Chanel began making hats around 1905, she was a kept woman, a mistress whose restless energy required a creative
outlet. Her ideas contradicted most of the fashion world as she created simple headwear followed years later by almost austere dresses
and suits.
Her target customers were modern women like herself, those who wanted pockets and clothing that didn’t demand corsets and frills and
lace. Some were courtesans, others countesses or wealthy wives. “Coco” Chanel was a dressmaker who sewed together creativity,
ambition and business sense, and a willingness to cultivate a mystique about herself and her background of poverty.
She became one of the best-known women in the fashion industry, then and now. By the 1930s, she was reportedly the wealthiest woman
in France and her success drew poets and writers and painters to her. More than 85 books have been written about her. 72
The history of the fashion industry is closely woven into the stories of some of its best known designers from Linda Allard, a woman from
Akron, Ohio, who was hired as a designer for $60 a week and went on to create the Ellen Tracy line; to Sonia Rykiel, who started out
making maternity clothes for herself and became the queen of knitwear from her Paris studios. It is a story of entrepreneurship and risk-
taking, of dropping out and coming back, as Chanel’s ins and outs demonstrate.

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Born in 1883 to an impoverished unmarried mother, Chanel grew up in small French towns. When her mother died, she, her sisters and
brother were sent to live in a Catholic orphanage and school. It is said the
nuns taught her to sew.
A dark slender beauty, Chanel worked at a tailor’s shop and also for a time as
a music-hall singer in Paris, where she collected her nickname Coco because
it figured in the refrain of one of her most popular songs. “She would become
the muse, patron, collaborator or mistress of a number of remarkable men,
including some of the most celebrated artists of modern times,” such as
Picasso, Cocteau, Dali and Diaghilev, wrote biographer Lisa Chaney. 73
She made hats for noble women and courtesans. In 1913 she opened a hat
shop in Paris, backed by a wealthy English lover. Chanel considered Arthur
Capel, the rich British man who bankrolled her first business ventures, as her
true love. Some believe the entwined CC in Chanel’s logo stand for Chanel
and Capel. (Others say they represent Coco Chanel.) 74
When she was 30, Chanel designed and sold a comfortable knit suit that she
first made for herself. The simple suit, similar to a school girl’s uniform,
became a staple of women’s wardrobes. 75
Her shop flourished and she soon started making custom clothing—for sport,
for evening wear and for ladies’ lunches. Many of her designs were intended
to be worn without a corset, and gave women more freedom of movement,
whether they worked in a department store or attended high society events.
Yet Chanel was not the first fashion designer to understand that women
wanted clothing that suited their life, perspectives and adventures.
Starting around 1850, a number of suffragettes started wearing “bloomers”—
also called “Turkish trousers”—as a way to declare their independence or to
exercise and build good health. (Fashionable young women in Europe wore
them for recreation and exercise, and to masquerade balls and for informal
portraits.) 76 Bloomers became closely associated with and took their name
from Amelia Jenks Bloomer, a women’s rights activist and editor of The Lily
newspaper. She wrote about the pants and wore them to rallies, which
encouraged other women to don them as well. Yet some wearing bloomers
were scorned in person and in articles and cartoons, and it took decades for
more women to adopt them as bicycling attire. 77
Women’s hemlines did not change during the 1800s, but the shape of their
skirts certainly did, going from very narrow to wider and bell-like. The
introduction of hoops reduced the need for layers of petticoats. The bustle—
shaped and draped cloth added to the back of a woman’s dress or suit—
grew bigger or smaller in the late 1880s. 78
During that time, John Redfern, an English designer, began to create tailor-
made jackets and skirts for women who golfed or went yachting. Redfern, the
Coco Chanel founded a fashion house and became an industry son of a tailor, grew up on the Isle of Wight in England. Each year, European
icon. (Bettmann/Contributor) aristocrats and Americans would flock there for the Cowes Regatta. Redfern’s
fashionable deck-side dresses made of serge, jersey and silk became very
popular and his reputation as a ladies’ tailor soared. 79
80
In 1876, Redfern & Sons opened a shop in London, and expanded to Paris in 1881 and Fifth Avenue in New York City in 1884. Some
fashion experts say his styles previewed the more relaxed women’s clothing styles of the 20th century. 81
In Paris, Chanel created style trends and previewed others. Her short hair prompted many women to adopt the boyish style. She was a
strong, forceful manager who planned ahead for new products and embellishments to her fashions. 82
Around 1924, she became one of the first fashion designers to create a perfume bearing her name. It was Chanel No. 5, the five because
a fortune teller said it was her lucky number. 83 To bring Chanel No. 5 to market successfully, she partnered with two brothers named
Wertheimer, who ran a major cosmetic company in France. They made, bottled and distributed her perfume and received 70 percent of its

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receipts; the owner of Galeries Lafayette, one of the major Paris department stores, received 20 percent for serving as connector and
Chanel kept 10 percent. “The spectacular success of the scent cemented her fortune,” wrote biographer Anka Muhlstein in the New York
Review of Books. 84
The Wertheimer family has held a controlling interest in Chanel’s company since 1924, despite Chanel’s efforts to unseat them in the
1930s. 85
Then, three weeks after France and Britain declared war on Germany in 1939, Chanel closed her couture house and laid off most of her
workers, with only her boutique at 31 rue Cambon remaining open selling perfumes and jewelry. Public opinion turned against her and
trade unions and government begged her to reopen. She refused. “I had the feeling that we had reached the end of an era. And that no one
would ever made [couture] dresses again,” she said. 86
While Chanel’s business and reputation grew in the 1930s, Anne Elisabeth Jane Claiborne, another advocate for working women’s
clothing, was growing up in and around Brussels. Her father, a banker, wanted her to become a painter, so he took her to museums
around Europe. Her mother, a fine seamstress, taught her to sew. 87
She came from a prominent Louisiana family, yet her sensibility came from her early years in Belgium: “The look of things is as important
as their function.” When the Nazis started their European conquests, she moved to New Orleans in 1939 and decided to look to the
fashion world for employment. 88
She moved to New York, where she won a Harper’s Bazaar design contest, and in 1950 landed a job as a sketcher for a Seventh Avenue
sportswear designer. 89 Claiborne spent most of her career as a working mother; she had one son and two stepchildren from her second
marriage to Arthur Ortenberg, who had hired her in that design job. In 1960, Claiborne was hired as the chief designer for the Jonathan
Logan junior dress division. She spent years trying to convince senior management of the need for comfortable career clothing for women
who worked. 90

A New Start
In Paris, after the war, Chanel, bored without work, decided to restart her fashion house, and developed a line of clothing shown in a 1954
fashion show. It was largely panned by fashion writers for failing to adapt to the styles set by Christian Dior’s more rich, feminine look. 91
Yet she persevered, and in 1955 debuted the 2.55 handbag, quilted with a gold chain and leather shoulder strap. Strong and light, it
allowed the woman’s hands to remain free. 92 It initially sold for about $220; today they run closer to $4,900. 93
Chanel very much liked wearing pants, even though a French law forbade women from wearing two-legged apparel except when riding
bicycles or horses. The law stayed on the books until 2013. 94
In the 1960s and 1970s, the fashion world took its cues from the women’s rights movements. In 1960, 37.7 percent of U.S. women were
working or looking for work: by 1980, that increased to 51.5 percent, and the labor force participation rate for women ages 25 to 34 nearly
doubled in that span. 95 As women landed jobs as accountants, lawyers, professors and journalists, they needed professional wardrobes
—and a new group of designers, many of them women, stepped up to outfit them.
In 1976, Claiborne, Ortenberg and a business partner established Liz Claiborne Inc. with a goal of offering a collection of fashions,
displayed in one place so customers could mix and match pieces, and aimed at the array of women entering the workforce. “The clothes
became an instant hit, and the company went public in 1981,” said Givhan, The Post’s fashion writer. 96
Claiborne’s wearable blouses and pants were less sophisticated than those of other 1980s designers such as Donna Karan and “Yuppie”
designer Ralph Lauren, but they were brightly colored, professional and sold well. “I wanted to dress busy and active women like myself,
women who dress in a rush and who weren’t perfect,” Claiborne said in 1989. “And I tried to bring good taste to a mass level.” 97
By 1985, Claiborne’s company became the first Fortune 500 enterprise to be founded by a woman. And by the late 1980s, her clothing
carpeted the major department store brands: Macy’s, May Company, The Broadway and others. “I would go into Dayton’s Department
Store in Minneapolis, Minnesota, and marvel at how much acreage was devoted to the Liz Claiborne apparel,” wrote Walter Loeb, an
influential retail analyst. “Liz Claiborne was everywhere.” 98
That ubiquitousness worked against her, as department stores decided to create their own house brands or exclusive relationships with
designers. Claiborne’s company had acquired other brands such as Dana Buchman and Lucky jeans; the company’s new management
focused on them. Shoppers no longer connected to Claiborne, whose fashions felt dated. 99
Miuccia Prada, born in 1949 in Milan, creates fashion that many say is intelligent and international. Yet she lives in the same building
where she grew up, the granddaughter of the great fashion designer Mario Prada, who founded Prada in 1913. In the mid-1970s, she went
to work for the family’s fashion leather house, after receiving a doctorate in politics. She was a Communist, and hated the rigid tastes of
that decade defined by designer brands. 100

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The youngest daughter, known to her family as Miu Miu, she launched the Miu Miu brand in 1993 to be more colorful and avant-garde than
the rest of the fashion house. 101

“Ugly Chic”
In the 1990s, she introduced Prada’s take on “ugly chic”—attire that defies
conventional views on what’s attractive—and changed direction every season,
a slap against Milan’s consistency of style and silhouette. “There is a key point
that people keep underestimating about me: I am a very trendy person! I
mean, my job is more complicated, but basically I am interested in what’s
next. Since I was 16, I wanted to be the first one,” Prada told Harper’s
Bazaar. 102
Like Chanel, she has championed the arts and funded filmmakers and an
array of other creative endeavors. Some fashion writers say she is the closest
thing to Chanel today, with a cultural recognition that extends far beyond the
fashion world. 103
Prada’s talents as a designer spring from her intense curiosity and an
understanding that fashion is both artistic and commercial—and that selling
matters. “If people take money out of their pockets, it means that what you are
doing is relevant to them.…. To sell is to prove that what you are doing makes
sense. I’m completely against the idea that we do fashion for an elite—that
would be too easy, in a way,” Prada said in 2013. 104

Today, Forbes magazine ranks Prada as the 79th most powerful woman in
the world. 105 The fashion house is a $3.96 billion company that must contend
with volatility in currency markets and a slow move to online sales. 106 The
Chanel brand, with headquarters in Paris and $5.2 billion in sales, is worth
$7.2 billion. 107 And Liz Claiborne’s brand was sold to J.C. Penney for $308
million in 2011 after posting losses since 2006. The decision forced the
company to seek a new name: initially Fifth & Pacific Cos. Inc., then in 2014
Kate Spade & Co. 108

Current Situation
Miuccia Prada heads the fashion house founded by her
Speeding Up and Selling Online grandfather. (Frazer Harrison/Getty Images for Glamour)
Online sales now represent a growing share of all fashion merchandise sales.
A Zara designer and pattern maker in Spain spent five days creating a loose-fitting winter coat based on a store manager’s description of
what women in New York and elsewhere wanted. After 20 more days of sewing and finishing, 8,000 of the coats—ironed, tagged and
quality inspected—were flown from Barcelona to Zara’s Fifth Avenue store in New York, priced at $189 each. Other clothing goes from
idea to stores in only two weeks. “Think of Zara not as a brand but as a very speedy chameleon that adapts instantly to fashion trends,”
said Anne Critchlow, an analyst for the French bank Société Générale. By offering new designs that others do not yet have, Zara may
charge more than its competitors. 109
“See now, buy now” means the new clothing shown at Fashion Weeks are almost immediately available to consumers who used to have to
wait six months or longer.
Prada sees no sense in the see now, buy now trend. “It’s less creative and less interesting,” and for quality brands, they may have to
pretend that something is fresh and brand new when it was created months ago, she told WWD. 110
The idea is to avoid consumer fatigue or boredom with styles, which show up on fashion blogs, in Instagram feeds and more for months
before they’re even in stores. Yet Givhan, the Washington Post critic, suggests that what’s being shown on the runway and on Instagram is
“not that great to begin with.” Previews should increase the appeal, she says, noting that movie trailers are around for months and often
whet the public’s appetite to see the film.
Amazon previewed its fashion and apparel aspirations in 2016 when it launched seven in-house brands of apparel and accessories for
women, men and children. The labels, including Lark & Ro and Franklin Tailored, give no clue they are controlled by Amazon. The online
marketplace started into apparel in 2009 with the purchase of Zappos, an online shoe site. 111

Automation Spreading
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The pace of change has accelerated in other ways too: with technology and
innovations in fabric, new ways to share fashion digitally, and a growing use of
robots or computerized sewing machines.
More than 80 percent of garment and footwear workers in Vietnam and
Cambodia could lose their jobs to automation, according to the International
Labour Organization. 112 Reprogrammable robots could churn out new
fashions and “shorten supply chains and lessen … lead times,” Jonathan
Zornow, founder of Sewbo, a garment robot startup, told Quartz. 113
Garment workers in Bangladesh, Cambodia and elsewhere have attempted
to unionize and staged several strikes over low wages and poor working
conditions. In some cases wages increased, although they often remained
below their government’s living wage measures. 114
Burnout among designers may be another problem. “The fashion cycle: Does
it causes designers to burn out? Brands were producing two or four or six
collections in a year, some of these brands are producing like 12, and it’s kind
of crazy,” says Givhan.
Yet companies that develop systems and expectations for speed may have an
advantage. “Since the beginning, the idea has been to understand what the
customer wants first and then have an integrated manufacturing and logistics
system to be able to deliver it to them quickly,” Pablo Isla, chairman and chief
executive of Zara parent Inditex, said. 115
Some say “slow fashion”—where stages and players in the production are
carefully considered and documented—may be an antidote to the burnout and
environmental worries. It’s intended to be ethical and mindful. 116
Fashion boutiques that continue to develop fresh, interesting designers will
Katiti Kirondé, a former model, launched a fashion line based
find a following online on Farfetch or one of its competitors. “They sell things
on a better white shirt for women.
that nobody has, incredibly different, fabulous things. You won’t find them
elsewhere,” says Kirondé, who in 2011 launched a fashion line based on
creating a better white shirt for women. Those that stick with old ways or offer up fashions that are widely available will die, she says.
More fashion and beauty brands—and in particular sneaker companies—use “the drop,” a carefully timed release to sell limited edition
items quickly. Kanye West’s Yeezy line for Adidas and several designers’ collaborations on limited edition lines for Target and H&M sell
out quickly, online or in shops—and then often are resold at twice the price on various reseller sites. Individuals share their score, then post
and resell them on DePop and other sites. 117

Athletic Wear Scored Strongest Sales Growth Last Year
Luxury sector was weakest performer in 2016

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Source: Imran Amed et al., “The State of Fashion 2017,” McKinsey & Company, December 2016, http://tinyurl.com/zevx5gj

Sales in the athletic wear sector of the fashion industry grew by 8.5 percent in 2016 over the previous year,
more than double that of any other category. Sales in the luxury sector increased by only 1 percent, while the
total global industry grew by 2.5 percent.

Yet they are not heading out to shop. Kenneth Cole will shut all 63 outlet stores to focus on online sales. 118 Other apparel retailers are
facing what is known as “the Amazon effect”—sales lost to lower cost, easy to shop online marketplace: American Eagle, Macy’s and
others all are closing many stores. 119
Online shopping and promotion contribute to a flood of counterfeit fashion items sold on Amazon, eBay and in pop-up stores and less
scrupulous retailers. In the European Union the cost of counterfeit fashion apparel—from coats and skirts to shoes—is 26.3 billion euros
($27.7 billion as of early January), or 9.7 percent of total sales, and at least 363,000 jobs lost. Organized crime syndicates from China or
Morocco set up factories in Italy and elsewhere and use social media to sell the fake shoes or capes. 120
Some brands are fighting back. Alexander Wang won a $90 million judgment in 2016 after suing the owners of 459 websites believed to
be selling counterfeit clothing, handbags and shoes. The court transferred their domain names to the fashion designer. 121
The fashion industry is growing into niches, offering growth prospects and opportunities to those catering to new buyers who have fewer
choices or more cash.
Kinky Boots, a 1999 documentary turned 2005 movie, told of a Northamptonshire shoe manufacturer that moved from tired designs to
creating sparkling boots and shoes for transgender men. Today, an array of companies create lingerie, shoes and suits for the up to 3.2
million transgender individuals in the United States. 122
LBGTQ fashion has a longer history, but “Single’s Day” and androgynous fashions—jackets, shirts, jeans and suits that may be worn by
men or women or men becoming women—are two fast-growing trends.
Single’s Day has turned into China’s busiest online shopping day of the year. The online retailer Alibaba sells billions, and the tally for all e-
retailers was $55 billion. It could take hold in Denmark, France, Finland or Australia, among the countries with at least one-sixth of their
adult population single. 123
Single men and women and couples may buy into genderless clothing, which focus on jeans, shirts and jackets for all. Despite issues
about fitting both men and women, they are increasingly trendy and marketed under such labels as ungendered, gender-fluid and gender-
neutral. “It’s a tricky, complicated thing” to fit hips and legs to men and women simultaneously, said Tim Kaeding, Mother Denim designer
and co-founder. 124
Fashion brands and retailers also are starting to catch onto the myriad ways that consumers want to shop. It varies considerably by age
and life stage, and also by their interests and the “channels and retailers that each generation grew up with,” reported NPD Group and
Wharton. Yet all generations want one-stop or convenient shopping, value and leisure and entertainment as they shop. 125

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Generation X, those ages 34 to 44, shop more at department stores than other age groups, while Baby Boomers favor warehouse clubs
for apparel and accessories as well as groceries and gas, The NPD Group report found. And across all age cohorts, the largest share of
online dollars was spent on travel, apparel, electronics and home and kitchen.
While buying online continues to be a major influence for fashion brands, becoming the next big thing has proved more difficult—especially
if you’re not named Kardashian or Trump. Only rarely does Project Runway, the U.S. reality TV show depicting designers creating, really
launch a major brand. 126
By failing to bring about a huge success, Givhan wrote, the show “offered a nuanced tale about what success means in today’s fashion
industry, why it is so difficult and why it mostly has nothing to do with having one’s name up in lights.” 127

Looking Ahead
Smart Clothing
Before long, your clothing may be an eclectic mix of fabric made of vegetable or organic matter and tech tags that log onto the internet and
provide invitations to VIP events.
Perhaps a sensor in the pocket of your jacket will alert you when you are within 100 feet of someone who attended your university or is part
of your social circle, creating opportunities to connect and converse. 128
A new coat will be embedded with sensors that serve up tickets to an event by the apparel manufacturer or instructions on washing that will
be transmitted directly to the wearer’s washing machine. Avery Dennison, the company that makes care labels for clothing, is working with
designers on such internet-connected clothing and has a goal of 10 billion connected pieces. 129
The Janela “smart products” platform will allow buyers to check the authenticity or manufacturing history of the pants purchased, see
exclusive smartphone content, order other products and participate in loyalty programs. “Products are able to be born digital,” Cisco CEO
Niall Murphy said. 130
Technological and other advances will weave its way into 3-D printed clothing and smart fabrics. Augmented reality and “magic mirrors”
with high definition cameras will transport shoppers to catwalks or advise them on possible purchases. 131
Fashion will be much more personalized for a consumer’s taste and size, The Post’s Givhan and others say.
Within a decade, an array of “open source” fashion items may be available to download and print on home 3-D printers, futurist Ray
Kurzweil predicted. New forms of printers and printing materials will overcome the stiff, synthetic quality that makes printing fabric difficult
now. And fashion brands will follow the music and media sectors in adapting to the reduced control over manufacturing, execution and
other factors, Kurzweil said. 132
Expect more performance clothing to help swimmers, runners and other athletes compete better. Already a British company has created a
triathlon suit and other tools with performance enhancements carefully measured by the founders. 133
One such advance is a fabric created by Stanford University professors that will allow heat to pass through it and also wick away sweat. Its
aim is to cool people off during warmer weather; it could be ready for commercial use by 2018. 134
Fashion brands will adopt new technologies to meet social and environmental concerns. A company is developing DNA-based technology
to prevent counterfeiting, clarify the origin and avoid cotton apparel produced with slave labor. 135 Researchers at Birmingham City
University in England are developing connected clothing that will contact charity shops or eBay and put themselves up for sale if they are
not worn for a long time—after first tweeting or chatting with the owner, reminding that they are being neglected. Researchers hope to
address overconsumption of clothing and the related environmental damage. 136
At the Massachusetts Institute of Technology, a team of design, engineering and occupational therapy students adjust their prototype
design of a shirt. As their summer ends at the Open Style Lab program, they may have created clothing that will help an autistic girl named
Eliza Mury concentrate better and learn more in school. The Open Style Lab has turned into an incubator for functional fashion that serves
a niche of people with disabilities or other needs. Though each design is personalized for one client’s needs, it also is intended to be
adapted for a wider audience. 137
Having clothing that collects data and transmits and collects it via the cloud raises privacy concerns. Could your new jacket track your
whereabouts? Data protection and consumer trust must be sewn into the future clothing, Cisco’s Murphy said. 138
Another trend will turn recycled food, from banana leaves to salmon skins, into clothing and shoes. One Madrid-based company named
Ecoalf uses old coffee grounds and discarded plastic bottles to create insulated vests, purses and shoes. 139

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