How did fashion grow into a global business?

Fashion is a big part of the modern global economy. The industry reaches almost all corners of society and generates massive profits. But its evolution has been marked by contrasting stages. Today, fashion is highly democratised as well as being deeply unsustainable. It has not always been this way.

The fashion industry has changed dramatically over the years. The mechanisms of garment creation and diffusion have evolved along with transformations in the structures of society, forms of clothing production and the media.

Fashion is closely tied to history, and the characteristics of the industry have shifted gradually over time. Its degree of influence on society has expanded with economic development and the increase in the global population’s capacity to consume.

The idea of ‘fashion’ is considered to have been born in Europe at the end of the Middle Ages. From then on, its development went hand in hand with the growth of cities. At first, it was a phenomenon limited to the privileged social classes, but from the 18th century (with the so-called ‘consumer revolution’), the social spectrum of people engaging with fashion broadened significantly.

With the advent of the industrial revolution, fashion began to become an ‘industry’ in its own right (Riello, 2020). But modern fashion as we understand it now – with its rhythmic succession of new forms, and its great aesthetic and economic importance – did not take shape until the second half of the 19th century. What we see today began life as French haute couture, or ‘high dressmaking’ – the act of making exclusive, high-end items (Lipovetsky, 2002).

**From haute couture to ready-to-wear**

The idea of haute couture was born in Paris in the mid-1800s. It was then that the figure of the couturier appeared: a fashion designer who created garments independently, constantly innovated ideas and signed their creations.

The clothing collections, exclusively for women, were periodically renewed and presented to the public in fashion shows. The customers chose the designed garment model, and the piece was made to measure from it, using high quality materials.

All this meant that the clothes were very expensive and only affordable for a small share of society. But some of the designs were also sold for reproduction with less expensive materials and more affordable prices, allowing these products to reach a wider range of people. Sooner or later, the trends launched by haute couture were also imitated by industrial clothing, again spreading the popularity of the designs.

Haute couture grew rapidly and acquired great importance in the French economy in the period between the two world wars. The designs created in Paris became internationally popular and spread throughout the world.

The sector was led by a small number of designers, who set the main trends. In the first decades of the 20th century, names such as Coco Chanel, Jeanne Lanvin, Paul Poiret and Elsa Schiaparelli stood out. After the Second World War, Cristóbal Balenciaga and Christian Dior were particularly prominent (Jones and Pouillard, 2017).

From the 1960s onwards, French haute couture gradually lost its predominance to the emergence of other forms of fashion production more suited to changing markets. Fashion ceased to be identified exclusively with luxury, and although Paris remained the world’s luxury capital, it had to share fashion leadership with other centres such as London, Milan and New York.

Many of the major French brands started to lose customers and income from their traditional activities. Over time, their work became primarily a mechanism for promotion and maintaining prestige, while the bulk of profits started to come from cheaper products such as perfumes, accessories and ‘ready-to-wear’ garments (Belfanti, 2017).

The main driving force behind these transformations was the intense social change that Western countries experienced in the 1960s. This gravitational shift led to an initial democratisation of fashion, with the incorporation of new sectors of society – including younger people, men, working women and the middle classes – into this type of consumption.

The idea of haute couture ceased to be the main source of fashion, and its position was taken over by the ready-to-wear industry. This change brought with it a multiplication of styles, as opposed to the previous homogeneity of taste and annual trends driven by a small number of high-level designers.

Ready-to-wear fused the ideas of fashion and industrial manufacturing. It involved mass-producing clothes with standardised sizes, but with a high level of quality and careful, fashion-conscious design. The phenomenon was (again) born in France by designers independent of the high fashion system, but it was soon joined by some of the great couturiers such as Yves Saint-Laurent.

There were similar trends in other countries. In the 1960s, London, which had not traditionally been very innovative and was noted only for high-quality menswear, became a pioneering centre for new trends, thanks to the cultural movement known as ‘Swinging London’, which in fashion took the form of an innovative, youthful and informal style.

Young Londoners in that decade had a consumption capacity far greater than at any other time in the past, which encouraged a proliferation of boutiques selling this type of clothing around Carnaby Street and the King’s Road.

Designers such as Mary Quant, the creator of the mini-skirt, became internationally known. London established itself as one of the world’s fashion capitals and it would continue to be identified with the most innovative trends in the following decades (O’Byrne, 2009).

New York, which had already established itself as an alternative fashion centre to Paris in the 1940s, was also on the up. From the late 1960s and early 1970s, a series of new designers launched powerful brands of industrially manufactured clothing and defined a contemporary American style. These looks were characterised by a search for more casual elegance (Rantisi, 2006).

But it was in Italy that the ready-to-wear industry reached its greatest development, especially from the 1970s onwards. Designers such as Giorgio Armani, Franco Moschino and Gianni Versace (all headquartered in Milan) drove a spectacular growth in Italian fashion production and sales abroad (Merlo, 2003).

The value of Italian exports in the fashion industries rose from €800 million in 1970 to around €20 billion in 1990. The success of Italian fashion was also supported by lower-priced brands, such as those of the Benetton group, which were accessible to a wider segment of consumers. Created in the mid-1960s, this company anticipated some of the strategies for making production more flexible and launching fashion garments at low prices that would later be developed by the big retailers of ‘fast fashion’ (Camufo et al, 2001).

The great luxury conglomerates and the triumph of fast fashion

Italian luxury brands had to face increasing competition from the large fashion groups that had been emerging in France since the late 1980s. A leading example of this was Louis Vuitton Moët Hennessy (LVMH). Founded in 1987 by Bernard Arnault, this conglomerate was built on an aggressive investment strategy that brought together a number of previously independent luxury companies (Bonin, 2012).

The corporate strength that the French brands achieved from the 1990s was accompanied by a stylistic renewal in many of them, thanks to the incorporation of a new generation of star designers (often of foreign origin). These included Michael Kors at Céline, John Galliano at Dior, Alexander McQueen at Givenchy and Marc Jacobs at Louis Vuitton.

The French fashion brands increased their competitiveness, especially in the new markets that opened up in Eastern Europe and, above all, Asia. Japan provided an average of 36% of sales for the ‘fashion and leather goods’ division of LVMH between 1996 and 2001. Once this trend started to tail off in the early 2000s, the company began expanding into Beijing, with its share of the Chinese market growing to 31% by 2012 (Donzé and Fujioka, 2015).

But the greatest competition for Italian fashion in the 1990s came from the United States. New York had established itself as one of the world’s fashion capitals in the 1990s, with the city’s fashion shows becoming a core part of the international calendar for presenting new collections. Designers such as Geoffrey Beene, Bill Blass and Roy Halston consolidated an American fashion with a sporty and informal character, which was later developed by designers such as Tommy Hilfiger, Calvin Klein and Ralph Lauren (Belfanti, 2017).

The large North American fashion firms mainly dedicated themselves to ready-to-wear, covering all price ranges within this type of clothing. They also supported the dissemination of their brands with large investments in marketing and advertising, paying much less attention to the creativity of the design or the quality in the manufacture of the garments.

For this reason, many of these companies can hardly be considered manufacturers at all: they typically do not have their own structure to produce the garments. Instead, they simply design the product and take care of marketing and retailing, contracting the manufacturing process to third-party suppliers, mostly located in emerging countries.

Another factor that has increased competition in the international market since the 1990s has been the development of fast fashion. These are low-cost garments mostly manufactured in countries with low labour costs, commissioned by large distribution chains, with an attractive design based on following fashion trends. Companies design and produce new garments all year round, often in very short production cycles.

Fast fashion is a response to both demand and supply factors. On one hand, it has been driven by the spread of demand for fashion to all levels of society (not just high-end luxury consumers). Consumers who previously bought mass-produced, low-end clothing without worrying about linking the clothes to the latest trends have shifted their purchases towards low-priced but fashionable designs and well-known brands.

At the same time, some clothing production and distribution companies have responded to the growing competition in the sector by increasing the flexibility of their production and the speed of adaptation to market demand.

This has been facilitated through organisational and technological innovations, such as the use of communication technologies to receive instant feedback from stores on products being sold, and the strategy of ordering unfinished garments to be coloured and trimmed just before launching them on the market.

These companies have shortened the duration and increased the number of ‘seasons’, renewing their products more frequently, to the point of almost constantly launching new garments.

To make the items conform to the latest trends, the most successful companies have managed to organise a very fast creation and manufacturing process, allowing them to imitate the style of the garments shown on the main fashion catwalks and to launch the product a few weeks later (Miranda and Roldán, 2023).

Fast fashion has exploded over the last two decades and it has captured a significant share of the apparel and accessories market. This has given rise to the creation of large firms that have taken leading positions in the ranking of fashion companies by turnover, such as Spain’s Inditex (parent company of the Zara chain) and Sweden’s H&M (Miranda and Roldán, 2021).

These fast fashion companies have given a new impetus to the democratisation of fashion. At the time, fast fashion has multiplied consumption and production, increasing the negative environmental impact of the textile and clothing industry.

Growing concerns about this problem (as well as the exploitation of workers) has led many of these companies to implement strategies to reduce their environmental impact and to improve the conditions for employees in their supply chain. But these measures, which can also be seen as part of the firms’ marketing strategies, are often ineffective.

This is especially clear in terms of environmental damage, since the very nature of fast fashion implies an extraordinarily high consumption of products that are quickly discarded. The result is the depletion of natural resources and a sharp increase in pollution and waste accumulation.

The problem has been accentuated in recent years by the emergence of so-called ‘ultra-fast fashion’, led by the Chinese company Shein. Internet-based businesses like this have accelerated production cycles even further, selling garments of very low quality and price, encouraging the consumption of a large quantity of products with a very short life.

To move towards a truly sustainable business model for the fashion industry, it would be necessary to moderate consumption, to reduce production and to extend the useful life of products. In other words, it would mean abandoning the current fast fashion model. The governments of several countries across the European Union (EU) are already pushing to move towards that goal.

But the question is whether this will mean going backwards in the process of democratisation of fashion, returning to a more socially stratified era, and whether consumers will be willing to accept this step backwards.

There appears to be a trade-off between access and impact. The story of the fashion industry to date has been one of exploding popularity at the expense of both the environment and working conditions. Turning back time will not be straightforward.