An article by Linda Yueh for BBC News Business .
We know that clothing is big business, but it may be surprising just how big the fashion business is.
The fashion industry’s contribution to the British economy is an estimated £26bn – that’s twice the size of the car industry’s and nearly as big as the contribution from housing, according to the British Fashion Council.
It is not just dresses and handbags, but also design and manufacturing that make the sector the largest part of the so-called creative industries, which include marketing, etc.
It’s an important part of the services sector that makes up around four-fifths of the economy. And services has powered the economic recovery, which I have written about before.
I wrote then that it was a tougher sector to picture than say manufacturing cars which is tangible. Intangible services like business services or design are harder to see.
But a couple of times a year during London Fashion Week, it is visible as models wear dresses that embody design as they sashay down the catwalk. And it’s also seen on the red carpet where actresses and singers generate publicity for labels as they come and watch the shows.
In the five days of London Fashion Week, about £100m of orders are placed for that season. Two-thirds of the buyers are international. As with many businesses, it’s a global market. That was clear from the fashion entrepreneurs that I interviewed, Tom Ford and Anya Hindmarch.
It’s also an industry that has taken to social media to reach that market. Burberry livestreams its catwalk show, so potential customers can watch online wherever they are. It’s a rare billion-pound British fashion house and that is due in part to having a large social media presence that has global reach.
It also means that it is a fiercely competitive business where it’s hard to stand out unless you’re a well-known brand and even then, it’s easy to fall in and out of fashion (sorry for the pun).
An estimated 95% of start-ups fail in the first five years, according to Imran Ahmed, who blogs on the “Business of Fashion”. That’s higher than that of other small firms where one-third won’t survive beyond the first three years.
Behind the catwalk and glamour, fashion entrepreneurs face the same challenges as other businesses seeking to stand out and attract customers. As I spotted various fashion editors in the front rows, it reminded me of the movie The Devil Wears Prada.
In addition to design, production, staging and selling to the retailers who are in the audience at the shows and to customers globally, the designers have to impress the fashion magazines whose publicity could be worth literally millions.