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A Reality Check for Fashion's Status Quo

BoF editor-in-chief Imran Amed recaps the week in the business of fashion.
MindBodyGreen | Photo: The Business of Fashion
By
  • Imran Amed

TUCSON, United States — It's been a very tough week in the fashion business. First came the unconfirmed (but not denied) news that Scott Sternberg's Band of Outsiders business is on the verge of closing, with the label cancelling orders and laying off staff.

The very next day, Kris Van Assche announced that he was pressing "pause" on his eponymous label to focus on his role as creative director of Dior Homme. "Times are tough for independent labels," Van Assche said to Women's Wear Daily. "This wonderful adventure has reached a point where I feel the need to take a break and some distance to better think about how to develop my brand in the future."

Indeed, several other emerging fashion businesses in London and New York have been facing problems of late — Meadham Kirchhoff, Richard Nicoll, and Peter Som, to name a few.

To add to the glum news, Michael Kors reported its slowest quarterly revenue growth since the company went public in 2011, citing the strong U.S. dollar, weak tourism and poor in-store traffic as the key drivers. Investors did not like that one bit. Kors' stock price plummeted and the company lost nearly 25 percent of its market value in one day: about $3 billion was wiped off its market capitalisation.

But this is not just a weekly blip. A headline in the Financial Times read: "Luxury goods lose gloss as consumer enthusiasm begins to wane," and the newspaper noted that "patchy Asian consumer enthusiasm, volatile exchange rates and geopolitical instability has taken its toll on some of the biggest names in this once unstoppable sector."

It's a far cry from Revitalize2015, a conference held just outside Tucson, Arizona, organised by my friend Jason Wachob who runs MindBodyGreen, the health and wellness industry's answer to The Business of Fashion. At the event, Jason has assembled 100 of the leading minds from the burgeoning health and wellness industry. The buzzwords here are meditation and mindfulness, paleo and gluten-free diets, the Microbiome and functional medicine.

The Health & Wellness industry has been called "The Next Trillion Dollar Industry," as more people spend their disposable income on experiences and activities that improve their day-to-day lives. From yoga to meditation to health foods, this industry is growing at an astonishing 50 percent per year, according to Accenture.

The appeal of fashion and luxury will always remain, but this week's news is another sign that in order to thrive, fashion brands must think deeply about how they engage with consumers and provide experiences and fulfilment that goes beyond glossy, marketing-driven aspiration. Fashion is now competing with other sectors, whose products bring meaning and joy to the lives of consumers.

Yet another reason to reconsider the formulaic fashion business model.

Enjoy our top stories for the week gone by:

Uniqlo's $50 Billion Brand Puzzle
Uniqlo aims to be the number one fashion giant in the world with revenues of $50 billion. But to achieve this, the company needs to be loved for its brand as well as its product.

Olivier Zahm's Cocktail of Intellect, Sex and the Seventies
Olivier Zahm's blend of sex and the Seventies is well documented. But it is the way the former art journalist passes this aesthetic through an artistic and intellectual lens that gives his magazine its unique DNA.

Pop. Fizz. Fashion?
Why are soda giants like Coca-Cola and Pepsi targeting fashion?

How Parisian Atelier Pallas Spawned a Growing Luxury Label
After seven years making prototype garments for the likes of Céline and Balenciaga, Daniel Pallas and his wife Véronique decided to launch their own line, which now generates about 50 percent of the company's total turnover.

BoF Voices Discussion: Are Celebrity Labels Good for Fashion?
Celebrities from the worlds of music, film and reality television have the kind of media reach and marketing might that most fashion designers can only imagine. However they are configured, celebrity lines are most certainly on the rise.

Gwyneth Paltrow's Contextual Commerce Play
Actress-turned-lifestyle guru Gwyneth Paltrow talks to BoF about her strategy for Goop.

Imran Amed Founder and Editor-in-Chief

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The State of Fashion: Technology