The fashion business

 
Models present creations for the Simongao collection during the 2014 Autumn / Winter London Fashion Week in London

We know that clothing is big business, but it may be surprising just how big.

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 Amed, 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.

More on Talking Business with Linda Yueh is broadcast on BBC World on Friday at 14:30 GMT, on Saturday at 00:30 GMT and on Sunday at 12:30 GMT and 18:30 GMT. In the UK it is broadcast on the BBC News Channel on Saturday at 20:30 GMT.

 
Linda Yueh Article written by Linda Yueh Linda Yueh Chief business correspondent

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  • rate this
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    Comment number 98.

    Most textiles are now imported from the Orient made in China, Bangladesh, Indonesia, Vietnam, etc. Labor intensive products that can be mass produced by relatively unskilled labor makes those products very cheap here. To compete locally employers have to create "sweatshops." While they exist including in the US I think they are only a tiny fraction of the clothing market as a whole.

  • rate this
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    Comment number 97.

    "The fashion industry's contribution to the British economy is an estimated £26bn...according to the British Fashion Council. "

    According to my sources in the retail financial industry that is a vastly inflated figure, and includes so many sundries as to make any reasonable analysis redundant using these "glibly" quoted statistics.

  • rate this
    -2

    Comment number 96.

    I don't know about your house but the closets in my house are bursting with acres of cheap textiles and not so cheap textiles to the point where I think the walls will burst. In fact I'm almost drowning in it. 99% of it belongs to the woman who lives with me.There seems no end to her need to shop for more.I'm happy with a few of each type of garment.If they wear out or no longer fit I replace them

  • rate this
    0

    Comment number 95.

    John@93

    I am not in the rag trade but I know quality when I see and feel it.

  • rate this
    0

    Comment number 94.

    84.leoRoverman
    "I'd be happier if my wife got hold of a sewing machine and made her own but that seems to be a dying art."

    It used to be that making your own clothes was much cheaper than buying them, that is no longer the case, plus women didn't used to work so they had time to, some people still do, but there is no longer a financial incentive and much less time.

 

Comments 5 of 98

 

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