Is the Fabled Fashion Ship Sinking?

A fashion industry insider reports.

Charles Frederick Worth was one of the world’s first noted fashion designers (See his Court Dress, above). In 1845, a fashion designer was an artist, highly regarded and sought after by the society of the royal court to advise on their wardrobe choices. Worth’s main concern, as a designer, was to design and handmake one of a kind haute couture that would distinguish each of his customers. Associated with class, distinction, style, and influence, people like Worth have been labeled taste-makers for well over a century. Relics aside, today, the role of a fashion designer is far more complicated, competitive, and multifaceted than ever before.

Well known designers, such as Stella McCartney, have been known to express a desire to run away from the industry after a season. When she received harsh criticism after her debut collection from the press in 2001, McCartney told NY Magazine, “People think I’m strong, but actually I wanted to crawl away. I thought, I’m going to live in the country with my horse and I’ll get a nine-to-five; I don’t need this.”

However, with hundreds of new designers emerging to show at fashion weeks around the world each season, even negative press is better than the alternative of no press. Minor complaints aside, in the past few years, incidents suggest that there are more serious issues afoot plaguing designers than insults from the press. From John Galliano’s drunken Nazi rantings, to Marc Jacob’s repeated drug problems, and the most tragic being Alexander McQueen’s suicide last year, designers seem to be experiencing something beyond the usual industry stress. With all of these melt downs, one has to ask: Might these outbreaks just be symptoms of a larger system failure?

To understand the current circumstances, one must first understand the role of a designer. Today, the designer actually functions as a Creative Director, overseeing many different pieces of the company’s product design, execution, brand imaging and positioning, and much of the marketing and press. Another key part of the role is being accountable to the Financial Officer, also known as the “Money” of the business. Which means a designer really has to understand every step, cost and stage of their business to be able to make well informed decisions on how to steer the business. Below is a diagram to illustrate everything that must be managed and considered in order to produce and sell fashion on a mass market level. The arrows describe the tiers of power throughout the system.

In a cascade system, such as in a fashion house, each part of the system is dependent on the other. Therefore, if one part of the system fails, the entire system collapses. And yet, somehow, up until recently, this system has been quite efficient across the board for most well known fashion houses. This system has been able to maintain because the least powerful and the lowest paid group within the system, the laborers, farmers, and factory workers, make up the largest part of the system’s labor pool, keeping the costs and product prices low. Ironically, these links just happen to be what keeps the whole system going.

The other factor that the fashion system relies heavily upon, but also pays little for, are materials. However, if the costs of labor go up because, for instance, a country like China decides to enforce and increase their labor standards (which is currently happening), the standards raise across the board in other countries. Over time, the price of the product must go up as well. If cotton crops fail repeatedly due to climate changes, the cost of materials increase across the board due to shortages, and the price of the product goes up again. If the price offered to customers goes up dramatically, amidst all the cheep and cheerful overstock product flooding the market from last year, customers simply won’t buy it. After all, most people already have enough stuff. The brand will only sell items on sale, which results in job instability of everyone in the cascade system.

The Designer and the “Money” must take the issue seriously and find a solution before the system can continue on a healthy level. However, limited resources and rising labor costs are not an easy problems to solve, especially when you have an extremely competitive market and are running a complex system already set up to work only one way. Unfortunately, there are only a few options within the fashion industry to stay afloat:

The Iron Fist Solution, á la H&M: Make the customers temporarily happy by making and selling enormous amounts of low price-tag products of cheap quality. In this case, the cost of business operations is covered through the slivers of profit on each item sold, and multiplied by the tens and hundreds of thousands of items that are produced. With this solution, the brand needs to be able to sell directly through their own stores and the designer must have some kind of monopoly over materials and labor to keep the prices of the goods exceptionally low. This technique will destroy the competition, as long as the designer can continue running the business on minimum costs. However in the current environment, this is not a long term solution. The costs of materials and labor will go up as resources continue to run low, which is caused by the mass production of poor quality goods in the first place. At this point, the company is chasing its own tail, and even if  the company using the Iron Fist Strategy can hold out long enough to put the competition out of business, eventually they’ll put themselves out of business if they don’t innovate their process at some point so that they find a solution to materials shortages.

The Velvet Glove Solution a.k.a. the Luxury Market Method: Invest in maintaining the appearance and allure of a “luxury brand” while selling a lot (although maybe not as much as an H&M) of lower cost product at “luxury” prices. Examples of this would be the Diors and Chanels of the world. This is the Iron Fist Solution seasoned with a little better quality and taste, and disguised by marketing that allows the brand to make a much higher mark-up on the sale of each item. Therefore, even if the brand is selling less items across the board, they make more for the operations budget on each item. So while we, the customers, equate Chanel with haute couture dresses and iconic tweed jackets, they’re making their money on selling patent leather (a.k.a. vinyl) shoes, handbags and perfume at exorbitant prices. This also destroys the competition, who can’t compete with the marketed “luxury” brand allure and history. While this solution may last for some time, provided consumers don’t get wise to the marketing schemes or lose their taste for “luxury,”  it again does not address the materials and labor cost increase issue, which eventually will cut into the marketing budget and over time might cause detriment to the brand.

The Performance Solution: They keep the costs of products proportionate to the costs of materials and labor. This solution invests in manufacturing technology, textile engineering, and science to keep ahead of the curb. This would be the Patagonia’s of the world. In this solution, there is almost no competition, you create your own niche market, and through innovations, you gain customer loyalty. Be the only one to know where to get materials that are made of recycled or renewable resources, thus removing the dependency on natural materials costs and you have created a more sustainable future for your company.

The Innovator’s Solution: There are always new designers and businesses springing up with a new way to do things. Whether it’s tackling marketing, design, or materials in new ways, this group of oddball fashion designers and indie-houses are thinking outside the box to drive consumer culture and the market out of the old ways. With the current media and market focusing on all things “green” and “socially responsible,” this new crop of innovative businesses are popping up to fill the hole in the market through the use of unthinkable techniques, collaborations, and technologies. Examples of these designers might be BioCouture, who creates leather jackets from tea film, Christopher Raeburn, who’s been known to use left over parachute material from the military to make windbreakers, or perhaps, Bright Young Things, whose marketing tactics appear to aim to convince people to buy less. While this growing “innovator” circle has not fully matured into well known designers in the mainstream, perhaps the mass market is not an innovative place to be if a designer is trying to plan for a future with fewer resources and fairly paid labor. However, these designers might just be the ones who ultimately find long term solutions to the current fashion crisis.

With all that is going on in the world’s environment, markets, and economies, it is easy to despair. From the standpoint of a designer, who oversees enough of the business to understand how things work (or how things don’t work), it’s like watching the ship going down in slow motion.

From their mast heads, some of the biggest designers of our times seem to be doing just that. Perhaps they’re just on their way to becoming relics themselves, without enough knowledge to change the way that their industry works altogether. Well, not all of them.

Karl Lagerfeld

Karl Lagerfeld is living in his ivory tower which he’s built so high that he might be the only one left with his head just above the water in the end. Recently he was quoted by Vogue as saying, “I have a lot more sympathy for people who have to take the train to work every day. What a load of nonsense.”

Sympathy, eh? “Designers are artisans who are extremely privileged to have a poetic profession. They are not artists. We have to stop saying that they are,”  Lagerfeld adds.

He makes the job look easy. Meanwhile those designers who feel all of the responsibilities behind the job, have panic attacks or worse. But let us remember back in 1975, in the thick of building his career to the empire he now owns, he mentioned to The Observer Magazine his philosophy on his own work practices, “I am a sort of vampire, taking the blood of other people.” With this work ethic he has gone very far, leading some of the most powerful and influential fashion houses in the industry, producing billions of dollars worth of product, and making people on all corners of the planet thirst for a wide range of products on an unprecedented level. Perhaps he actually is the bug that bites.  But then again, according to him, he doesn’t even take himself seriously. It’s a wonder that the rest of the world considers him a fashion guru.

Editor’s Note: Due to sensitive circumstances, the author has asked us to use a pseudonym. We have honored the request in this case.

Image: Joe Paczkowski