Why the fashion industry needs a makeover

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IMRAN AMED: The most interesting thing you can do if you look at historical photos going back 50 or 100 years is to look at what people are wearing. It gives you a sense of what’s happening in the world at that time. And so when we look back to 2024, Bob, and like the HOKA sneakers, and the athleisure and the streetwear looks that people are wearing — these are a reflection of what’s happening in the world right now. That’s what makes fashion so powerful. 

BOB SAFIAN: That’s Imran Amed, founder and editor-in-chief of The Business of Fashion, the world’s preeminent authority on the fashion and luxury industry. Imran joins us in the wake of the latest Paris Fashion Week to explain a critical inflection point facing the industry, from high-end custom-fitted couture to ready-to-wear and handbags, to fast-fashion. He takes us inside exclusive Paris shows and the pressure on big corporate players like LVMH as well as the good and bad of upstarts Shein and Temu. There’s so much to learn here, whether you’re a fashion insider or not. So let’s get to it. I’m Bob Safian, and this is Rapid Response.

I’m Bob Safian and I’m here with Imran Amed, the founder and editor-in-chief of The Business of Fashion. Imran, it is great to see you. 

AMED: Likewise, it’s been a while.

Copy LinkInside the Paris Haute Couture Week

SAFIAN: It has. You have been my guru, my guide to the fashion business for many years. I want to start by asking you about Paris Fashion Week, the couture show, which just concluded. Now, there are fashion weeks all across the calendar, all around the globe. For those of us who are not in the business as tightly as you are, this latest show in Paris, how does it fit into the fashion cycle? And what are the messages that we should be pulling from it?

AMED: We’re so inundated these days, Bob, with fashion imagery coming from all over the place. It’s sometimes hard for the more casual observer to understand. You know, how it all fits together. Couture, the couture shows, or the haute couture shows, they sit at the very top of the fashion pyramid. In order to be granted, the appellation by the Fédération, the Fédération in Paris that oversees the Chambre Syndicale de la Haute Couture, there’s a whole bunch of rules you have to follow about how the clothes are made, who makes them, where they’re made. And these clothes, traditionally, Bob, are made specifically for the individual. So a lot of these shows, unlike the ready-to-wear shows that happen in February and September, the haute couture shows happen in January and usually in July. This year, they were brought forward a week because of the Paris Olympics.

And there are clients at those shows, watching the looks come down the runway and actually thinking about what they want to buy. And sometimes these looks can sell for hundreds of thousands of dollars because they’re all made by hand, using specialist ateliers that are scattered all over Paris and other parts of France. Some of the garments are actually embellished by very, very talented artisans in India known as the Karigars. So I would say that haute couture represents the highest form of fashion in the kind of Western fashion tradition. 

SAFIAN: From the purposes of a business, like you’re creating these looks to actually sell them. Like you’re hoping someone in that audience is going to spend that hundreds of thousands of dollars? Or is it sort of more promotion, marketing… 

AMED: It’s both. The scale of the business is not huge. They say there are only about 200 women in the world that can buy haute couture. But there are meaningful, sizable brands that focus on haute couture, trying to sell perfume, products like a $50 lipstick all the way to, you know, a $2,000 handbag. It’s kind of the dream factory for the fashion industry. 

SAFIAN: So this couture show, were there takeaways from it? 

AMED: You know, the fashion industry is in a pretty challenged place at the moment, you know, after a mid-pandemic and post-pandemic boom in the luxury industry where brands were growing at high 20% annual growth figures. The industry is at this kind of reckoning point right now. So it was quite interesting for me as a fashion and business analyst and observer to be in the mix this week, seeing how things were going. You saw a few things, you know, designers like Tom Brown, who is also the president of the CFDA in the U.S., and Daniel Rosebery, who’s the creative director of Schiaparelli, a couture brand that’s being revived by the business mogul Diego Della Valle. They really seemed unperturbed by what’s going on in the industry. Like these shows were incredible. Like the creativity and effort that went into these shows was absolutely… You know, it creates this sense of wonder.

Daniel took us all into the basement, or maybe it was the wine cellar or the kitchen of this old mansion in the heart of Paris, and we were plunged into darkness. And, you know, his normal venue is this space called the Petit Palais, which is bathed in light, but because of the Olympics, he had to move to a new venue because they’ve shut down so much of Paris. And we were all seated in this like rectangular shape, probably no more than 200 of us at the most. And the models were, as they emerged from the back, you know, the first one came out sheathed in this gold, an incredible gold feather look, made to look like feathers, not real feathers.

Tom Brown, he staged a show that was inspired by the Olympics. And so, you know, he always does these like very, very immaculately, somewhat lengthy choreographed shows. He created his show almost entirely from muslin. And muslin is the… When you’re in the haute couture process, when they make the first version of the garment for you, they make it out of muslin. And Tom, he chose to make his entire show out of muslin. And actually the invitation that they sent to us were muslin coats, like the couture coats that all of the artisans and craftspeople in these ateliers use. So, you know, it was a very experiential, very creative, incredible experience to have. 

Meanwhile, the big mega brands, Dior and Chanel. Dior, you know, is part of the LVMH group, which is the world’s largest luxury goods group. Dominant in the sector of fashion, but also increasingly in the beauty space and watches and jewelry and hospitality. Dior and LVMH have been showing slowing sales in recent seasons. And so, there’s this kind of crisis of like, what’s going to happen now? Chanel actually doesn’t even have a creative director at the moment because three weeks ago, Virginie Viard, who took over from the truly legendary Karl Lagerfeld after he passed away, suddenly stepped away from the brand. And so that show went on without a creative director at the helm, which is highly unusual for a house like Chanel and really spoke to the fact that we’re in really a transitional moment, both for Dior and for Chanel — the two, kind of, pinnacles of haute couture in Paris.

Copy LinkThe fashion industry’s reckoning point explained

SAFIAN: You wrote an article on Business of Fashion recently that argued that the fashion system is struggling, under what you call a ‘corporatized approach.’ Can you explain that?

AMED: The big brands in this industry have become so big, so dominant that it makes it really, really hard for the younger independent designers. We had for a time, this really healthy ecosystem where you’d have these designers come out of fashion schools. Some of them would go work for a big fashion house. Some of them would create their own brands, and they would sow the seeds for the future creative directors who would eventually take over at the helm of these big houses. 

But lately, I’ve just had this feeling that that early stage part of our industry is not very healthy. You know, there’s been a lot of things happening in the industry that have just made it really, really hard. In the United States, the department store channel is extremely challenged at the moment, and this is where designers at the early stages of their business would first sell their collections. And they put on these very onerous, sometimes impossible sales terms on these designers in terms of sell-through. 

And then more recently, Bob, we’ve seen a crisis happening in the online luxury e-commerce part of the business. So you have three or four of the most important luxury e-commerce players facing their own issues. You had Farfetch, which was saved at the last minute out of bankruptcy by a big e-commerce player in Korea in December. And, again, Farfetch is one of the channels that a lot of designers use to kind of reach the market before they could open their own stores and operate their own ecommerce shops. Matchesfashion, you know, grew out of a beautifully curated set of stores in London, then was valued something like $1 billion by Apax, who invested in it and kind of tried to turn it into a big ecommerce player. That didn’t work. Matches is in administration right now, which is the UK version of Chapter 11. And also Net-a-Porter, which was really the pioneer in the luxury ecommerce space, which is owned by Richemont. Net-a-Porter was supposed to be sold to Farfetch, but when Farfetch had those problems, the deal fell apart, so Net-a-Porter is kind of languishing at the moment as Richemont is trying to find a buyer.

And so all of these things have conspired to make our industry just feel dominated by a lot of business topics and big corporate players that have made it really, really hard for us to focus on the creativity, which is really the lifeblood of fashion. And the industry growth rates are down to like 2 or 3%. Some companies aren’t growing at all anymore. And there’s kind of a reality check saying — where does the industry go from here?

SAFIAN: As you’re talking, I’m struck by how the interaction between the way the corporate structures and incentives work and impact the creativity of the industry as a whole. When I first saw your article, I thought it was gonna say, ‘Oh, these big companies. It’s hard to be creative inside big companies.’ And yeah, we know that, but it sounds like there’s a lack of creativity, not just in the products, but in sort of the structure of the industry and the way it works.

Copy LinkHow a focus on growth is hindering creativity

AMED: That’s exactly right. And so one of the reasons is, after Matches was acquired by Apax and after Farfetch did its IPO, and was beholden to the public markets. And after, you know, Net-a-Porter was acquired by Richemont, another big, major luxury goods group, they all were pushed to grow really, really fast. And they were focused on this, what they call GMV — gross merchandise value. They’re really focused on communicating growth and GMV. And in focusing on growth for growth’s sake, they lost the curation. Like all of these companies, all had different points of view, different buys before they all started to look the same and feel the same.

So the only other way that they could compete was based on price. And when they were competing based on price, that’s the worst thing to compete on if you’re a luxury e-commerce player and again, the margins began to sink. The math just didn’t work anymore. And all of a sudden, as the growth in the market began to fall, these companies were all put into a crisis. 

So like the lack of creativity in the buy and in the way of engaging with customers ultimately was brought on by the corporatization of these assets, which had been acquired by companies that didn’t respect or cultivate the creativity that all of us are looking for as customers. We’re not looking for identical retailers on the internet. We’re looking for retail experiences that inspire us. And yes part of it is that there’s a lack of creativity inside these big companies that have become…  You know, it’s almost like luxury merchandise now, you know, one brand’s $1,000 luxury logo hoodie is indistinguishable from another brand’s luxury logo hoodie. Everyone’s putting out bags that are exactly the same shape with the same kind of gold logo hardware. It just feels like merch now. And we’re missing that creativity that I think customers are really looking for, especially now that they’re scrutinizing their spend so much more.

SAFIAN: I mean, the relationship between creativity and business is a struggle in every industry, but you’d think in fashion retail, like fashion and luxury, the balance of power would be a little different? 

AMED: That’s such an interesting observation. And I think, you know, Bob, I first tried to start breaking into this industry 17 years ago. And I think the sway and power that creatives held in the industry at that time was much higher. I think the big bosses of these luxury groups were in a way somewhat beholden to these creative talents, which in a way was not healthy either because I think they would indulge some of the top creatives in behaviors and in habits, and in ways of working that were not healthy and sometimes were toxic both for the individual and the people they worked with. I think now the pendulum has switched the other way and we have another unhealthy balance which is: the creatives are being put into boxes and forced to work in ways that are all about meeting the demands of these large, now publicly traded companies, that are analyzed by all the same investment banks and investment analysts as Procter and Gamble, and Apple, you know? And so, when you’re these big public companies in every quarter, you have to show growth, it really puts a drain on creativity. And so what I hope is that pendulum, that we find a better balance.

SAFIAN: I love how Imran melds an analytical view of business realities with an appreciation for the artistic side. When those areas are at odds, any industry struggles. Balancing and integrating them unlocks opportunity. After the break, we’ll talk about the interplay between celebrity and fashion, and the good and bad of the fast-fashion market. Stay with us.

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Before the break Business of Fashion’s Imran Amed shared lessons from Paris Fashion Week and explained why some big brands are struggling. Now, we talk about the latest twists in fast-fashion, the controversy over Louis Vuitton tapping musician Pharrell Williams as creative director, and three business trends to keep your eye on. Let’s jump back in.

Copy LinkExploring Pharrell’s tenure at Louis Vuitton

SAFIAN: I’m curious about Pharrell Williams and his tenure at Louis Vuitton. Great musician, entertainer, entrepreneur. It’s a different kind of role and job for him. How do you interpret and assess how he’s doing so far, what someone like that does to the industry overall? 

AMED: What the big bosses at Louis Vuitton and LVMH would say is that they weren’t looking for a traditional designer. You know, Pharrell had the almost impossible task of stepping into the shoes of Virgil Abloh, who by the way, was also not a fashion designer. He was trained as an architect. And what Virgil managed to do was take a brand that seemed really inaccessible and really out of touch in a way with so much of what’s happening in culture and the world. And he just kind of broke it open, broke the rules, you know? And as a Black designer, he was able to channel different kinds of creativity that came from the culture and communities that Virgil comes from. And that was a pretty bold move for LVMH to take at the time. And it’s pretty inarguable that that was a really successful decision. 

So when they were thinking about, ‘well, who could possibly step into Virgil’s shoes?,’ I think they were looking for more of a cultural curator and communicator who could speak to that same community that Virgil had a draw towards Vuitton. And to be fair, there was a pretty large industry backlash to that announcement for a lot of people who work in the industry who said, you should be taking that opportunity, and you should be giving that to—  

SAFIAN: Right, giving it to someone who paid their dues, who’s done all this before. 

AMED: Yes exactly. And so when I had the opportunity to sit down with Pharrell, these were some of the topics we addressed. I think what’s really important also to note, Bob, as you think about this decision, is the Louis Vuitton business lives and dies on the sale of handbags and leather goods. Yes, they have this ready-to-wear business. The lion’s share of the profit at Louis Vuitton is driven by handbags and leather goods.

After that pretty monumental show that Pharrell staged almost exactly one year ago now on the Pont Neuf in Paris, my eye was on the bags. What are the bags gonna be? Because, you know, that’s really what that business is built upon. And what he did was he took almost the most mundane ubiquitous Louis Vuitton bag shape, the Speedy, and he blew up the original Louis Vuitton print, which is the Damier checkerboard print, and kind of infused that with very vibrant color. And according to the reports that I’m hearing, those bags are selling extremely well. 

So honest assessment after a year of Pharrell at Vuitton is I think he’s done a very good job of stepping into Virgil’s shoes and trying to pick up where Virgil left off. But you know, I think LVMH and Louis Vuitton are increasingly thinking of themselves as cultural brands, not fashion brands. And so perhaps this is a sign of the times. 

SAFIAN: I wanted to ask you — whenever I’ve been to fashion shows, and I haven’t been to many, but I always feel like a fish out of water. Like, I don’t have the right wardrobe myself. I’m not cool enough. I don’t know what to look for. And some of that’s by design by the industry. But at the same time, as you mentioned, there’s this strain of democratization. And I just was curious for you, like, how do you operate in this environment? Cause you’re an insider and an outsider at the same time. How do you think about all of that when you’re living in that world? 

Copy LinkHow fashion reflects societal and cultural forces

AMED: I tried for a long time to break into this industry, and nobody would let me in, you know? I knocked on so many doors. I went through official recruitment channels coming out of business school. I networked my way to top CEOs and designers, and pretty much the message that everyone gave me was like, “we don’t need that.” Like someone actually literally said that to me, like, “we don’t need people like you.” And I was a management consultant with an MBA, you know, this wasn’t seen as an industry that needed someone with my kind of experience. And so it has been fascinating as someone who was a complete outsider to now be able to not just be on the inside, but be welcomed into the industry and be appreciated by this industry and to be valued for these perspectives that I bring to the industry. And my perspective has always been informed by being an outsider. Because I wasn’t schooled in the rules or conventions or norms of how the fashion industry should work, or who it should be accessible to, you know? I think my perspective has had an impact in fashion because I come with that outsider’s perspective.

I left the couture shows that we were just talking about halfway through to come to the Aspen Ideas Festival because I want to be In spaces and places like these that open my mind and help me connect the dots about what’s happening in fashion and how that is interconnected with an intertwined with all of the stuff that’s happening in the wider world — the technological forces, the geopolitical forces, the cultural forces, the social forces that are shaping the world around us. Because at its best, the fashion industry is also a reflection of those forces. 

The most interesting thing you can do if you look at historical photos going back 50 or 100 years is to look at what people are wearing. It gives you a sense of what’s happening in the world at that time. And so when we look back to 2024, Bob, and like the HOKA sneakers, and the athleisure and the streetwear looks that people are wearing — these are a reflection of what’s happening in the world right now. That’s what makes fashion so powerful. 

Copy LinkThe state of fast fashion and the waste it generates

SAFIAN: I wanted to ask you about fast fashion. H&M just this week announced a surprise change in CEO. How much of what’s going on in fast fashion is about competitors, you know, Shein and Zara and Temu, which are spending big in the U.S. to get attention. How much is it about that? How much is it about the market for fast fashion overall? 

AMED: So, fast fashion is obviously a topic we’re obsessed with at BOF. Probably one of the biggest, if not the biggest issues when it comes to fast fashion is the issue of waste. So, you know, so much of what we produce in our industry is actually never bought or worn by anybody. 

 SAFIAN: So it’s not the waste of you or me buying something and then throwing it away after using it. It’s the processor—  

AMED: It’s never bought. It’s never worn. And so all of the toxicity and chemicals and emissions that are part of creating clothing. And by the way, every garment we create has some kind of impact. All of that effort is actually for nothing because those clothes are never worn because so much of the industry is making things without knowing what people actually want to buy. 

And one of the things that Temu and Shein have managed to do is create this, like a very responsive cycle. This manufacturing cycle, the way they work with manufacturers in really small runs, the way they’re testing and gathering data from customers on what people want before investing and making more of it. There’s actually part of that model that’s quite intelligent. 

The challenge is the materials they’re using, the conditions of the people who work in those supply chains. We don’t really know much about it because they’re not very transparent about it, and it causes me a lot of concern that we’re training customers to buy things and wear them once or twice and then discard them. So there’s a little element of what they do that I’m quite curious about. 

A lot of what’s happening in those models that’s actually really problematic and the way Zara and H&M and some of these bigger players are responding to that is really — you know, Zara, for example, is moving a bit more upmarket. They’re trying to reduce waste. I had the opportunity to visit their headquarters in Spain and see the, it’s almost like a, if you were like managing the liftoff of a space shuttle. It was like this room filled with computers and data and like everything that’s going on in their supply chain all around the world. It was fascinating. H&M, historically, has been one of the businesses that’s been most focused on sustainability. But they’ve really lost their creative edge. I think the biggest thing we need to change is customers’ relationships with clothes. And the industry has a big part to play in that.

SAFIAN: It’s interesting. I never realized that sort of the volume of waste that was from clothing that’s never worn and that in some ways, the model that Shein and Temu were using are reducing that aspect of it, even as what they’re producing maybe is even more disposable than ever. 

AMED: Exactly. Yeah.

Copy LinkThree fashion trends to keep your eye on

SAFIAN: If there are a handful of things that I should be following, focused on, or understand about the fashion business right now, that I should take away from this conversation, what are they? What do I keep my eye on? 

AMED: I would keep my eye on artificial intelligence because just as it is likely to change and disrupt pretty much everything in business and creativity, it’s going to be really interesting to see how leaders on both the creative and the business side of fashion begin to integrate AI tools and processes into the way they run the business. But also the way they run the creative process. And some of the designers I’m talking to are also already using some of these tools. 

The second is the rise of the Indian fashion market. India over the next decade is going to become the third largest economy in the world after the United States and China. A market that every fashion CEO I know is starting to look at. 

And I guess the third thing is something that we already touched on which is fashion’s role in addressing the climate crisis. Fashion is one of the highest emitting, most damaging industries in the world. And as a moral responsibility, but also as an economic imperative, reducing waste in fashion is also going to increase profitability in fashion. And so really focusing on this waste area, I think is really really important. Not just because we’re living on this planet that’s getting hotter and hotter and hotter, but also because this is an industry that’s going to be more challenged over the next 10 years. And I think people are going to be looking for ways to cut costs and deliver more efficiently to customers. And a big part of that will come from reducing waste.

SAFIAN: Well, Imran, as always, a great education and great entertainment to catch up with you. This has been great.

AMED: Bob. It’s been such a pleasure to chat with you.

SAFIAN: Imran’s discussion reminds me just how complex and multifaceted all businesses are. Paris’ couture week might leave the impression that artistry alone drives the fashion industry but there’s also supply chains and gross merchandise value and AI and more. What Imran illuminates is how multidisciplinary we all need to be in the evolving marketplace. That’s hard, and it’s exciting. Whatever gets us inspired, whether it’s a muslin coat or a spreadsheet, we’ll need it. I’m Bob Safian. Thanks for listening.