Asket, a men’s clothing brand founded in 2015, has experienced an average growth of 150% each year in its first five years. He achieved gross merchandise sales of $ 10 million through direct-to-consumer channels and broke the business. Its strategy is now to slow growth.
It is typical for start-ups to have high levels of growth in the first few years and then stabilize, but rather than an unfortunate fate, it is a conscious decision by Asket to cap growth in accordance with the the brand’s mission to build “a world without rapid consumption”.
“From now on, we are aiming for maximum growth of 60% per year to make sure we are doing it right,” says co-founder August Bard Bringéus. “Besides the traditional business plan, we also have a long-term conceptual plan of what Asket needs to become to be a solution to the problem that the fashion industry has with the climate crisis.”
The fashion industry has thrived on the fast fashion model perpetuated since the 1990s which saw the cost of clothing plummet, while consumption skyrocketed. The global fast fashion market is expected to grow from $ 25.09 billion in 2020 to $ 30.58 billion in 2021 and again to reach $ 39.84 billion by 2025, according to the Fast Fashion Global Market Report 2021 from Researchandmarkets.com.
Asket isn’t alone in believing that this level of growth is at odds with the industry’s sustainability goals.
Fashion’s biggest challenge
This week, the British Fashion Council launched its Circular Fashion Ecosystem report which sets out three key goals for reducing the impact of the industry, the first of which is to “reduce the volume of new physical garments”. He revealed that 4 billion pieces of clothing were purchased in the UK alone in 2019.
Kate Fletcher, a sustainable fashion researcher and co-author of Earth Logic, a framework for creating solutions that prioritize the planet over profit launched at London Fashion Week in February 2020, believes that a sustainable future cannot exist without addressing this problem. “In working in fashion and sustainability, there is a lack of criticality and a lack of people willing to call out the things that are really the problem and deal with them head-on,” she says.
Next month’s Copenhagen Fashion Summit, one of the industry’s key sustainability events, will be themed “prosperity versus growth”.
“This is one of the biggest challenges facing the land and this industry right now: how do we redefine what ‘prosperity’ means and what ‘growth’ means? Says Morten Lehmann, sustainability director at Global Fashion Agenda which organizes the event. “Is value just growth and volume, or is it the way we create value for both the supply chain and the workers, the artisans, the consumers and, of course, also the stakeholders and shareholders? “
Global Fashion Agenda released a report last year that found that if fashion continues on its current trajectory, it will miss its carbon emissions reduction target by 50% by 2030, set in accordance with the Accord of Bets on the climate.
However, Lehmann believes that viewing growth as something that integrates environmental and social impact, as well as financial aspects, can make smart business sense. “[Investors] know that the climate crisis is not something that could happen, and the biodiversity crisis is not something we question, it is happening. Access to cotton and polyester will not be the same in the future and the prices of these raw materials will change dramatically, ”he said.
While the problem can be industry-wide, brands are finding ways to solve it within their own businesses.
Fight against brand decline
For Asket, it is through its permanent collection of timeless models. He doesn’t run sales and the only changes to his collection each year are improvements to existing models or the addition of a new product category, like his swim shorts launched this summer. A line of women’s clothing has also just launched.
“The way we are developing now is to get more people to buy less clothes, rather than constantly selling to our existing customer base telling them that what you bought yesterday is no longer in fashion,” explains Bard Bringeus.
For large companies, circular initiatives, such as resale and recycling, that reduce the need for new products can pave the way for degrowth while providing new revenue opportunities.
E-commerce retailer Zalando has created “Zircle,” an app where consumers can resell fashion products to them on credit. Zalando then resells it in his new pre-loved category. Last October, they rolled it out in 14 markets and received 100,000 products in the first month. Their goal is to extend the lifespan of 15 million items by 2023.
“The holy grail for us is the decoupling of our economic growth from our social and environmental impacts. We need to move from a linear ‘take, make, waste’ approach and we need to move to a circular approach, ”says Kate Heiny, Director of Sustainability at Zalando.
The 2017 Ellen MacArthur Foundation’s New Textile Economy Report found that by moving to a circular system, the industry could unlock a $ 560 billion economic opportunity through new business models.
Heiny says it’s not just about the revenue generated by the new models, but also about positive brand equity. “We see every dollar and every minute we spend bringing sustainability to life, not as a cost, but as an investment, in order to stay relevant. We are awaiting feedback on customer satisfaction and engagement with sustainability departments.
For Birdsong, a London-based label founded in 2014 with the aim of providing work for women facing barriers to employment, degrowth is about distributing profits more evenly. “Growth at the expense of others is one thing, growth redistributed to all is another”, explains Sophie Slater, founder of the brand. “We want to continue to grow because we are redistributing that growth to everyone in our supply chain. This means our workers get more hours, paid a living wage, and we can hire more people who face barriers to work. ”
Slater is also exploring circular options such as working with Shwap, a new peer-to-peer resale platform that offers participating brands a discount every time one of their products is resold.
A new way of doing business
There are hurdles in trying to start a fashion business while arguing for slower consumption. Neither Asket nor Birdsong are wholesaling to avoid pressure from retailers to produce new collections, and their pool of potential investors has been reduced to those who share their goal. Asket has raised two rounds, totaling $ 1 million, from angels, friends and family, and Birdsong’s funding has come from social impact investors who measure the company’s positive societal impact as well. as profits.
Bard Bringéus says finance industries need to make changes to accommodate more types of businesses like his. “Funding is primarily based on this short-term horizon, which is a huge challenge,” he says. “What really needs to happen to change the financial market and the stock market is regulation that makes it harder to continue to extract resources and exploit people and the planet at the rate we are now. . “
Pressure begins to build on the marks to fix the problem. The Fashion Revolution Transparency Index, which annually rates 250 of the top clothing brands on their supply chain disclosures, has started including production information. The 2021 index found only 14% released the annual amount of products produced. Regarding circularity programs, 27% offered a recycling program, 18% offered product repairs, and 14% had implemented alternative business models such as rental and resale.
At first glance, decay seems counterintuitive for good deals, but in reality, it is better deals with lower volumes. It requires creative thinking about how fashion works; an exciting challenge for those who want to embrace the task. Of course, consumers will also have a role to play in reducing demand for new clothes, but those who can provide them with their fashion fix without over-extracting natural resources will be on the frontier of a brave new fashion industry.