overproduction

An Earthquake in the Fashion Industry

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What Happens to Luxury E-Commerce?

An earthquake is going on in the fashion industry, invisible to most. It’s about luxury e-commerce. Specifically, Farfetch, which was about to collapse.

The platform represents the e-tailer everyone talked about. For mainstream fashion shoppers, dazzled by the lights plus an excessive selection, being absent from it meant not belonging to the right circle. For retailers, it was a possibility to make a lot of money. However, the supermarket setting did not intrigue niche fashion enthusiasts at all.

What is Farfetch?

Farfetch is a marketplace that connects brick-and-mortar fashion boutiques. Therefore, people from anywhere in the world can buy their favourite items from a boutique on the other side of the globe and get them delivered to their doorstep. Afterwards, since focusing on the luxury segment, they have started offering services directly to fashion brands. Also, they bought the London boutique Browns.

Who’s behind the group?
Investors gather the Chinese Alibaba; Artemis, the holding company of the Pinault family, owners of Kering; and the Swiss luxury group Richemont.

How does the business work for Farfetch?

They take a 30% cut from all the retailers as they can connect to a worldwide audience. However, born in 2007, the company became profitable in 2014. But, they could hardly maintain the profit. The company shares, valued at about 20 billion dollars at its peak, lost about a third of their value, dropping to a record low of 60 cents. Now, the firm has a market value of $250 million. In fact, the platform was close to bankruptcy.

What happened?

In 2019, Farfetch acquired the Italian New Guards Group, license-owner of Off White and others, reporting unexpected losses of about 2 billion dollars. In other words, by abandoning its inventory-free marketplace strategy, Farfetch lost its original, cost-effective pattern. Yet, their business peaked during the pandemic. But, as the company pursued growth, costs increased simultaneously.
Indeed, the New Guards acquisition reported a 40% drop in sales.

Two more factors contributed to the downfall: brands wanted more control over their products and the discount policy. Moreover, a slowdown in the luxury market had an impact on sales.

Farfetch was supposed to buy a 47.5% stake in Yoox-Net-a-Porter Group, but perhaps we won’t see this deal.
After the share price plummeted, a white knight came to save the e.tailer: the Korean group Coupang, Inc.

What to expect from this earthquake in the fashion industry

For those who see fashion as creative expression and not a giant supermarket, Farfetch isn’t fascinating. Indeed, many call it the ‘Amazon of fashion’ – a destination thriving on relentless discounts.
A few freethinkers might wonder where on earth those exaggerated quantities of garments would be sold. Though it is good to witness brands talking about sustainability while partnering with a company that made overproduction in the fashion industry its business model!

Eventually, an invisible earthquake is happening in the fashion industry, which may result in a tsunami. All the brick-and-mortar retailers connected to the platform have lost their lucrative toy. But, planning to sell through Farfetch, they still have ordered immense quantities of fashion garments. Since local customers were just a tiny percentage of their business, where would they sell their huge stock? Where will they sell the unrealistic budgets pushed by the marketplace?

Now, what should we expect? Will brick-and-mortar ‘Farfetchers’ survive? Or will they fall under the tsunami?

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Understanding The Fashion System

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The Truth Behind Sales & Markdowns

Understanding the fashion system involves exposing the hidden environmental costs of frequent fashion promotions and sales. Aiming for sustainability in the fashion industry is critical to saving the planet.

Sales used to occur at the end of the season only. But now, promotions and markdowns are frequent. What’s changed in the fashion industry? Since fashion became finance and brands became properties of corporations, profit has been the only logic guiding the fashion industry. Corporations use overproduction to maximise profit; sales are part of the game.

The negative impact of fashion sales

Sales apparently are a way to get a deal on clothing and other products. But, they contribute to a bigger problem in our society: the value of clothing and the labour that goes into making it is not recognised. In other words, sales devalued product quality and labour.

Sales perpetuate an unsustainable production cycle that harms our planet. To support this profit-driven system, they fuel impulsive buying, encouraging people to buy things they don’t need. Additionally, when brands play a pricing game with their products, it can call into question their credibility. On the one hand, brands praise the value of their products. But a month later, this value has halved. Who are they kidding?

However, overconsumption and overproduction are two faces of the same coin: capitalism, an economic system that values profits above all else. 

Despite the apparent fascination, thinking individuals should consider the detrimental impact of sales on the planet and people. With overproduction and fashion waste visible from space, the fashion industry significantly contributes to climate crises, biodiversity loss, and environmental degradation. In fact, the recent UN guidelines underscore the urgent need to combat unsustainable consumption patterns.

The call is clear: curbing overconsumption. To do so, we must acknowledge sales and frequent markdowns as symptoms of a profit-oriented system that harms our environment. But, to find solutions, first, we must grasp how the fashion system operates.

The fashion system: who does it work?

Brands pressure retailers to meet escalating budget demands each season (minimum amount or quantity). That leads to excessive purchasing beyond actual retailers’ demand. To ensure profits for brands, retailers buy more than they can sell.
Excess inventory drives up retail prices because high quantities of merchandise are sold only during sales. So, higher prices throughout the season partially cover this loss.
Lastly, overstock forces retailers into a cycle of frequent discounts and promotions, aiming to encourage more purchases from end consumers.

This interconnected cycle of consumption and production cannot be rectified by addressing only one aspect without considering the other. In this context, we cannot trust brands who preach sustainable fashion.

Solutions: sustainable fashion practices

Sustainable fashion practices for retailers: Stop Sales! 

• Reduce the quantities of clothing and accessories ordered per season. If brands do not accept lower orders, do not buy from them. By preventing overstock, retailers can maintain fair prices throughout the year. Both retailers and consumers would benefit from this.
• Refrain from excessive discount events like Black Fridays, promotions, and sales. Customers are no longer willing to buy at the true value of a garment.
• Educate consumers to prioritise quality over quantity, investing in durable, timeless pieces and understanding the value behind their purchases.

What Consumers Can Do: be agents of change!

• Don’t contribute to the climate crisis. Change the system: make conscious choices. 
• Buy less, much less during the season. Take only quality items that complement your existing wardrobe; reuse clothes.
• Avoid trendy items; embrace a timeless aesthetic that transcends fleeting fashion. Remember, quality endures – good design transcends trends. It doesn’t have an expiry date.

Ultimately, sales aren’t sustainable. Understanding the fashion system, how brands’ pressure on retailers drives over-purchasing, inflates retail prices, prompting endless discounts, and addressing both consumption and overproduction, is vital for impactful change.

At suite123, we prioritise good design, timeless fashion, and conscious consumption. And we care about people and the planet. Therefore, we do not endorse sales. 

Let’s make conscious decisions about what we consume, nurturing a sustainable world for generations to come.

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A Quiet Act of Rebellion

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Our Fashion Story Beyond the Beaten Path

Our stance at suite123 is a quiet act of rebellion against the fashion industry’s dominant business model.

The fashion system relies on relentless overproduction and manipulative marketing strategies. Despite mounting evidence of the industry’s devastation on the environment and despite the unmeasurable fashion waste, brands keep making large quantities of new clothes. And shops continue to order endless varieties of clothing from these brands. Likewise, people keep purchasing and discarding clothes. Nothing ever changes. The only thing that changes is labels. Now, garments are labeled as sustainable just to play with illusion.

Fashion rebellion #formodernhumans

So, at suite123, we rebel against corporations that talk the talk but fail to walk the walk.
And we rebel against the masses who follow the carnival barkers blindly, contributing to perpetuating a system that exploits workers. This system, in turn, depletes the masses’ rights, yet they refuse to see it. In fact, despite the information available, most people ignore it and keep supporting the very brands exploiting people and the planet.

We are not a big corporation. On the contrary, we are a tiny independent boutique that operates on a private shopping pattern. An experiment outside the norm in the fashion universe.

Thoughtful design, independent creators, limited productions

Our rebellion lies in endorsing thoughtful design, independent creators, and advocating for limited productions. Also, educating people and encouraging the choice of a select few quality pieces over mindless accumulation. In other words, we advocate for limited quantities of quality garments for a tiny niche of individuals who are free thinkers.

For the new year, our dedication persists in seeking creativity, good design and quality to curate a limited selection that encapsulates true essence. It’s about less, much less, but better. No gimmicks, no endless arrays of clothing, and no false claims of sustainability. Also, no carnival barkers to fill you with pointless stuff. Instead, a meticulous curation of meaningful garments, unwavering in its value.

Rather than conforming to a fashion system that screams, we thrive in quiet working. Being aware of how our model is somewhat revolutionary in an industry flattened by business logic, we persist with our quiet act of rebellion.

In a world of fashion noise, we choose the quiet revolution of mindful curation and quality over quantity.

We invite you to join us on this journey!

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This is Autumn?

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Global boiling & its impact on the fashion industry

September 23rd was the first Autumn day, but this is Autumn? Sunday, the temperature in Milano reached 32 Celsius (about 90 Fahrenheit). In other words, we don’t have to wait for climate change – climate change is here. For brands and fashion retailers, it is particularly odd.

Specifically, it’s the global boiling era. Yet, in every industry, as well as in fashion, people work like nothing serious happens. Do they wear blinders? Don’t they feel the heatwave? Or maybe they think: “Yes, it’s hot, but there’s nothing we can do.”
As a matter of fact, in every field, people like cogs dutifully do their job. No questioning. It seems money, budgets, and turnover is what counts. Who cares if we are boiling?

What’s the impact of climate change on the fashion industry?

Fall/Winter shop windows reveal the inadequacy of fashion. Fashion is out of sync with current times.
First, people still wear lightweight clothing. We don’t need warm garments now. Indeed, stores overflow with wool sweaters, coats, down jackets, and all the winter stuff. But who dares now to try a wool sweater when the temperature invites you to the beach?
Second: sooner or later, cold weather will come. However, because of the heat wave, retailers who sell mass-produced garments will lose about two full-price months from the selling season. That means mass retailers’ unsold stock will be huge. Therefore, they will sell most garments during the end-of-season sale.

Autumn fashion in the global boiling era

In this context, it is clear that the actual pattern (mass manufacturing/ overproduction and distribution) doesn’t work anymore. We must stop and rethink the fashion industry from scratch. Ignoring climate change is dangerous nonsense since it is now a tangible reality.

Also, the above points come from a financial perspective, while ethics should be our first concern. Raising awareness on climate action is crucial. We must reduce our impact on the planet. How do we do it? By limiting by far our consumption to what really counts. Consume less. Don’t buy pointless stuff. Avoid waste.

Above all, start asking yourself: This is Autumn?
Most people pretend nothing happens. But with what conscience do they keep their eyes closed?

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The paradox of sustainability

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Is sustainable overproduction a valuable strategy?

Do you know the paradox of sustainability? The paradox is this: making many more garments labelled as green products. In other words, it means perpetrating the same old overproduction pattern and marketing it as sustainable.

If that’s how you make money, why should you change? Okay, but the planet is dying, and we are facing a climate emergency the fashion industry should care about! Well, the attention towards this topic is just a facade.

In fact, according to Edited, “In the past four years, the number of clothes described as ‘sustainable’ has quadrupled.”

Green overproduction: the paradox sustainability

Yes, we know we write about this topic a lot. But when the data we ran across confirms our impressions and perplexities, it is appropriate to address it over and over.
Is sustainable overproduction a valuable strategy? Specifically, is that how we plan to save the planet? Making four times the stuff we made before is our strategy?

If this is true, we are far from reducing our impact on the planet. Of course, that is not sustainability. And it doesn’t take a genius to understand it. So, let’s call it by its name: this is marketing! This is greenwashing!

Sustainable fashion, like eco furniture, food, tourism or whatever, has become a profitable business. And more than an effective change of direction, it represented a change of marketing. Just call it green, and you’re going to sell it! Whatever object or service you are trying to launch on the market.

The solution the fashion industry ignores

Let’s be clear: sustainable fashion, rather than making new garments and new stuff in huge green quantities, is a matter of educating people towards conscious consumption. Indeed, the solution is producing way less garments. At the same time, we reuse, resell, recycle and upcycle existing clothing.

But, instead of educating people, for the fashion industry, it is easier to make money by flooding the market with sustainable products. Which, in the end, aren’t sustainable at all.

And so, this is the paradox of sustainability: making four times more garments and naming them sustainable. Unfortunately for us and for the planet, it is not a joke!

Free download our sustainability checklist here!

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