Rapid Response: Why the fashion industry needs a makeover, with Imran Amed

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Join us at masters of scale dot com slash apply twenty six. That's mastersofscom slash apply. Twenty six. The most interesting thing you can do if you look at historical photos. Going back.

Fifty or a hundred years? is to look at what people are wearing. It gives you a sense of what's happening in the world at that time. And so when we look back to 2024, Bob, and like the hoka sneakers and the act leisure and the streetwear looks that people are wearing, these are a reflection of what's happening in the world right now. And that's what makes fashion so powerful.

That's Imran Ahmed, founder and editor in chief of the business of fashion. The world. preeminent authority on the fashion and luxury industry. Imron joins us in the wake of the latest Paris Fashion Week. To explain a critical inflection point facing the industry. From high-end custom fitted couture to ready to wear in handbag.

To fast fashion. He takes us inside exclusive Paris fashion shows, as well as the pressure on big corporate players like LVMH. And the good and bad of upstarts Shein and Timu. There's so much to learn here, whether you're a fashion insider or not, so let's get to it. I'm Bob Safian.

And this is rapid response I'm Bob Safian and I'm here with Imran Ahmed, the founder and editor in chief of The Business of Fashion. Imran it it's great to see you. Likewise, it's been a while. It it has. You have been my guru, my guide to the fashion for many years. I wanna start by asking you about Paris Fashion Week the Couture Show, which Just concluded.

They're fashion weeks. All across the calendar. All around the globe. For those of us who are not in the business as tightly as you are. This latest show in Paris, how does it fit into the fashion cycle and what are the messages that

We should be pulling from it. We're so inundated these days. Bob with fashion imagery coming from all over the place. It's sometimes hard for the more casual observer to understand. You know how it all fits together. The couture shows or the haute couture shows, they sit at the very top of the fashion pyramid.

In order to be granted The appelation by the Federation, the Federation in Paris that oversees the the Chambre Sandical de la Haute Cuture. There's a whole bunch of rules you have to follow about how the clothes are made. Who makes them, where they're made. And these clothes, traditionally, Bob, are made Specifically for the individual. So a lot of these shows, unlike the ready to wear shows that happen in February and September, um, the Haute Couture show shows happen in January and usually in July. This year they were brought forward a week because of the Paris Olympics. And there are clients at those shows.

watching the looks come down the runway and actually thinking about what they want to buy. And sometimes these looks can sell for hundreds of thousands of dollars because they're all made by hand using specialist ateliers that are scattered all over um Paris and other parts of France. Some of the garments are actually embellished by very, very talented artisans in India known as the Carrigars. So I would say that The haute couture represents the highest form of fashion in the in the kind of Western fashion tradition. From the purposes of a Business. Like

Your creating these these looks To actually sell them? Like you're hoping someone in that audience is gonna spend that hundreds of thousands of dollars or Or is it

Sort of more. Promotion, marketing It it's both. The scale of the business is not huge. They say There's only about two hundred women in the world. But there are meaningful, sizable

brands that focus on haute couture trying to sell perfume products like a uh fifty dollar lipstick all the way to, you know A a two thousand dollar handbag. It's kind of the dream factory for the fashion industry. So this couture show, like Were there Takeaways from it. Place at the moment.

You know, after mid pandemic and post pandemic boom in the luxury industry where brand were you know Growing at high Twenty percent. annual growth figures. The industry is at this kind of reckoning point right now. So it was quite interesting for me as a fashion and business analyst and observer to be in the mix this week, seeing how things were going. You saw a few things, you know, designers like Tom Brown

Who is also the president of the the CFDA in the US, and Daniel Rosebury, who's the creative director of Um Scap Rally, a couture brand that's being revived by Uh the business mogul Diego Dallavalle. They really You there seemed unperturbed by what's going on in the industry. Like these shows were Incredible.

Лик та кретив і ефо. that g that went into these shows was absolutely You know, it it creates this sense sense of wonder. Daniel took us all into the basement, or maybe it was the wine cellar or the kitchen of this, you know. old mansion in you know in in the heart of Paris, and we were plunged into darkness.

And you know, his normal venue is this uh bathed in light, but because of the Olympics he had to move to a new venue'cause they've shut down so much of Paris and and we were all seated in this like rectangular shape, probably no more than Two hundred of us at the most. Um and the models were

Uh as they emerged Uh from the from the back, you know the first one came out sheathed in this gold Incredible gold feather Uh look uh l made to look like feathers, not real feathers. Tom Brown.

He staged a show that was inspired by um the Olympics. And so you know, he always does these like very, very Immaculately some somewhat lengthy choreographed shows. You know, he created his his show almost entirely from muslin. And muslin is the f when when you're in the quote haute couture process, when when they make the first version of the garment for you, they make it out of muslin. And Tom, he chose to make his entire show out of muslin. And actually the invitation that they sent to us

were muslin coats, like the couture coats that all of the the artisans and and and and craftspeople in these ateliers use. So you know it was a very experiential, very creative Uh incredible experience to have. Meanwhile The big mega brands, Dior and Chanel. Do you want

You know, it's part of the L VMH group, which is the the world's largest luxury goods group, dominant in the sector of fashion, but also increasingly in the beauty space and watches and jewelry and hospitality Dior and L VMH have been showing slowing sales in recent seasons and so There's there's this kind of crisis of like, well, what's gonna happen now? Chanel actually doesn't even have a creative director at the moment because three weeks ago Virginie VR

The truly legendary Carl Lagerfeld after he passed away suddenly stepped away from the brand. And so that that show Went on without A creative director at the helm, which is you know, highly unusual for a house like Chanel. And really spoke.

to the fact that we're in really a transitional moment, both for Dior and for Chanel, the two kind of Pinnacles of haute couture in Paris. You wrote an article on business effects recently that argued that the Fashion system. Is struggling under what you call a corporatized approach. Can you explain that? The big brands in this industry have become

So big. So dominant. That it makes it really, really hard for the younger independent designers Um we had

For a time, that's like really healthy ecosystem where you'd have these designers come out of fashion schools. Um Some of them would go work for a big fashion house, some of them would would kind of create their own brands. And they would sow the seeds for the future creative directors who would eventually take over at the helm of these big houses. But lately I've just had this feeling that that

That early stage part of our industry is not very healthy. You know, there's been a lot of things happening in the industry that have just made it really, really hard. In the United States, you know, the department store. channel is extremely challenged at the moment, then this is where Designers. at the early stages of their business would first sell their collections and they put on these very onerous

sometimes impossible sales terms on these designers in terms of sell through And then more recently Bob, we've sine like the r a crisis. happening in the in the online luxury e commerce part of the business. So you have you know, this quite important three or four of the most important luxury e-commerce players facing their own issues. You had Far Fetch, which was

Saved. at the last minute out of bankruptcy by a big e commerce player in Korea in December. And you know, again, Farfetch was one of the channels that a lot of designers Used to kind of you know, reach the market before they could open their own stores and, you know, operate their own e commerce shops. Matches fashion, which is you know, grew out of a beautifully curated Set of uh

stores in London. And then was valued. Uh something like one billion dollars by Apex who invested in it and kind of tried to turn it into like a big e-commerce player. That didn't work. Matches uh is in administration right now, which is the UK version of um chapter eleven. Uh and and also uh Netta Porte, which was like really the pioneer in the luxury e commerce space, which is owned by Rishma. And Netaporte was supposed to be sold to Farfetch, but when Farfetch had those problems, the deal fell apart. So Netaporte's kind of languishing at the moment as Rishma's trying to find a buyer. And so

You know All of these things have conspired to make Our industry just feel dominated by a lot of business topics and big corporate players that have made it really, really hard for us to focus on the creativity, which is really the lifeblood of fashion and the industry growth rates are, you know, down to like

Two or three percent. Some companies aren't growing at all anymore. And there's kind of a reality check saying, you know Where does the industry go from here? As you're talking, I'm

I'm struck by how the the interaction between the way the corporate structures and incentives work Impact the creativity of the industry as a whole. Like when I first saw your article, I thought he was going to say, Oh, these big companies It's hard to be creative inside big companies. And

And yeah, we we know that. But it it sounds like there's a lack of creativity, not just in the products, but in sort of the structure of the industry and the way it works. That's exactly right. And so one of the reasons Yeah, after matches was acquired by Apex and after Farfetch kind of did its IPO and was beholden to the public markets. And after

Yeah, Nataporte was a Uke's Nataporte was acquired by Rishma, another big Major luxury goods group. Um They all were pushed to grow really, really fast. And they were focused on this what they call GMV, gross merchandise value. And then they're really focused on communicating growth in GMV. And

In focusing on growth for growth's sake, they lost The curation, like all of Uh you know, these these companies all had different points of view, different buys before they all started to look the same and feel the same. So the only other way that they could compete was based on price. And when they were competing based on price, that's the worst. thing to compete on if you're a luxury

you know, e commerce player and you y the margins began to sink. The math just didn't work anymore. And all of a sudden, as the growth in the market began to fall, You know, these companies were all put into a crisis. So like the lack of creativity. uh in the buy and in the way of engaging with customers, ultimately um was brought on by the corporatization of these assets which which had been acquired by companies that didn't respect or cultivate the creativity that all of us are looking for as customers. We're not looking for identificate retailers on the internet.

We're looking for You know, retail experiences that inspire us. And yes, part of it is that there's a lack of creativity inside these big companies that have become. You know, I it's almost like luxury merchandise now. You know, one brand's one thousand dollar luxury logo hoodie is indistinguishable from another brand's luxury logo hoodie. They you know everyone's putting out bags that are exactly the same shape with the same kind of gold logo hardware. It just feels like merch now. And we're missing that creativity that I think customers are really looking for, especially now that they're scrutinizing their spend so much more. I mean the relationship with cre between creativity and business is a struggle in every industry, but you'd think in fashion retail like

a fashion and luxury, the balance of power would be a little different. That's such an interesting observation. And I think, you know, Bob, I First. tried to start breaking into this industry seventeen years ago. And I think The sway and power that creatives held

In the industry at that time. Was much higher. I think Um The big bosses of these

Luxury groups. But In a way somewhat beholden to these creative talents. Which In a way.

was not healthy either because I think Yeah, they would indulge some of the top creatives. In behaviors And inhabits. And in ways of working that were not

healthy and sometimes were toxic, both for the individual and the people they worked with. I think now the pendulum has Switch the other way. And we we have another unhealthy balance, which is You know, the creatives are being

put into boxes and forced to work in ways that are all about meeting the demands of you know these large now publicly traded companies that are, you know analyzed by all the same investment banks and investment analysts as Procter and Gamble and Apple, you know. And so, you know, when you're when you're b these big public companies and every quarter you have to show growth, it, you know, it really puts a drain on creativity. And so what I hope is that pendulum I th we we find a better balance.

I love how Imron Mills an analytic view of business realities with an appreciation for the artistic side. When those areas are at odds, any industry struggles, balancing and integrating them unlocity. After the break, we'll talk about the interplay between celebrity and fashion and the good and bad of the fast fashion market. Stay with us. When you build substantial wealth through your business, it's often tied up in a single equity position. The upside is real, but so is the risk, and knowing when to act isn't always obvious.

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Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show. Because every Friday we release a second rapid response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely from Ford CEO to NAS administrator to the lessons from The Devil Wears Prada. It takes about 10 seconds to find, just search rapid response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there.

Humans will never be more intelligent than AI. There's gonna be two types of companies. Those were great at AI and those that went out of business because they weren't. How do we build a future? That is human centered. I'm Rana El Calyubi.

And on my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives. Find pioneers of AI wherever you tune in. Before the break, business of fashion's Imran Ahmed shared lessons from Paris Fashion Week and explained why some big brands are struggling.

Now we talk about the latest twists in fast fashion, the controversy over Louis Vuitton tapping musician Pharrell Williams as creative director, and three business trends to keep your eye on. Let's jump back in. I'm curious about Pharrell Williams and and his tenure at Louis Vuitton. great musician, entertainer, entrepreneur.

It's a different kind of role and job for him. How do you interpret and assess How he's doing so far, what someone like that. Does to the industry overall.

What the big bosses at Louis Vuitton and L VMH would say is that they weren't looking for a traditional Designer. Yeah. had the almost impossible task of stepping into the shoes of Virgil Ablow, who by the way was also not a fashion, he was trained as an architect. And what Virgil managed to do was take

A brand that seemed Really inaccessible. And really out of touch. In a way. with so much of what's happening in culture and the world.

And he just kinda broke it open. He broke the rules. You know, and as a black designer He was able to channel different kinds of creativity that came from

The culture and communities that Virgil Comes from And it you know, that was a pretty bold move. for L VMH to take at the time and I think it's pretty

inarguable that that was a really successful decision. So when they were thinking about, well, who could possibly step into Virgil's shoes. I think they were looking for more of a cultural Curator. And communicator. someone who could speak to that same community, that Virgil

Had had a drawn Towards Vitton? To be fair, there was pr a pretty large industry backlash. to that announcement for a lot of people. Uh who work in the industry, who said, you know, you should be taking that opportunity and you should be giving that to aone who paid their dues. Who's done all this before. Yes, exactly.

And so when I had the opportunity to sit down with Farrell, these were some of the topics That he and I addressed. I think What's really important also to note, Bob, as you think about this decision is The Louis Vuitton business Um

Lives and dies on the sale of Yeah. Handbags and leather goods. Yes, they have this Ready to wear business the lion's share of the profit.

At Louis Vuitton. is driven by handbags and leather goods. Pretty monumental show that uh Pharrell staged almost exactly one year ago now on the Pont Neuf.

Um In in Paris. My eye was on the bags. Mm-hmm. What are the bags gonna be? Because you know, that's really what that business is built upon. And what he did was he took

Almost the most Mundane. Or ubiquitous. Louis Vuitton bag shape, the speedy. Mm-hmm. And he blew up. The original Louis Vuitton print, which is the Damier checkerboard print.

And he in and kind of infused that with very vibrant color. And according to the reports that I'm hearing, those bags are selling. Extremely well. So My honest assessment Uh after a year of Pharrell at Viton is I think

He's done a very good job of stepping into Virgil's shoes and trying to pick up Where where Virgil left off. But you know, I think LVMH and Louis Vuitton are increasingly thinking of themselves as cultural brands, not fashion brands. And so perhaps this is a sign of the times. W whenever I've been to fashion shows and And I haven't been to many, but I always feel like a a fish out of water. Like I I don't have the right wardrobe myself. I'm not cool enough. I don't know what to look for.

By design, by the industry. But at the same time, as you mentioned, there's this strain of democratization. I just was curious for you, like How do you operate in this environment? Cause you're an insider. And an outsider at the same time. How do you think about all of that when you're Living in that world.

I tried for a long time to break in this industry and Nobody would let me in. You know, and it was I knocked on so many doors. You know, I went through official rec recruitment channels coming out of business school

I you know, networked my my way to top CEOs. And designers and pretty much the message that everyone We don't need

people like you. Like someone actually literally said that to me. Like we don't need people like you. And I was like I'm you know A management consultant with an MBA, you know, th th this wasn't seen as an industry that needed someone with my kind of experience. And so It has been fascinating as someone who was a complete outsider to now be able to

not just be on the inside, but be be welcomed into the industry and be appreciated by this industry and to be valued for these perspectives that I I bring to the industry my perspective has always been informed by being an outsider. Because I wasn't. schooled in the rules or conventions or norms of how the fashion industry should work.

or who it should be as accessible to. You know, I think my perspective Has had an impact in fashion because I come with that outsider's perspective. I left the couture shows that we were just talking about halfway through to come to the Aspen Ideas Festival because I want to be. In spaces and places like these that open my mind and help me connect the dots about what's happening in fashion and how that is interest connected with and intertwined with all of the stuff that's happening in the wider world. The technological forces, the geopolitical forces, the cultural forces

Um, the social forces that are shaping the world around us, because at its best, the fashion industry is also a reflection of those forces. The most interesting you can think you can do if you look at historical photos. Going back. Fifty or a hundred years. Is to look at what people are wearing. It gives you a sense of what's happening in the world at that time.

And so when we look back to twenty twenty four, Bob, and like the Hoka sh sneakers and the athleisure and the the streetwear looks that people are wearing, these are a reflection of what's happening in the world right now. And that what's that's what makes fashion so powerful. I wanted to ask you about Um fast fashion. H M just this week announced a surprise change in CEO. Like how much of what's going on in fast fashion is about

Competitors, you know, Shean and Zara and Tima, which is spending big in the US to get attention. How much is about that, how much is about The market for fast fashion overall. So fast fashion is obviously a topic we're obsessed with at BOF. Probably one of the biggest, if not the biggest issues when it comes to fast fashion is the issue of waste.

So you know, so much of what we produce in our industry is actually never bought or worn by anybody. So it's not the waste of me buying something and then then throwing it away after using it. It's the process. It's never But

It's never Warn. And so All of the toxicity and chemicals and

Emissions And that are part Of creating clothing and by the way, every garment we create has some kind of impact. All of that effort is Actually for nothing because those clothes are never worn because so much of the industry is making things without knowing what people actually want to buy.

And one of the things that Tamu and Sheehan have managed to do. is create this like a very responsive Manufacturing cycle, the way they work with manufacturers in really small runs, the way they're testing and gathering data from customers on what people want before investing and making more of it. There's actually part of that model that's Quite intelligent.

The challenge is The materials they're using. the conditions of the people who work in those supply chain Yeah. We don't really know much about it because they're not very transparent about it, and it causes me g a lot of concern.

that we're training customers to buy things and wear them Once or twice and then discard them. So there's there's a little element of what they do that I'm quite curious about. But a lot of what's happening in those models That's actually really problematic.

And and the way Zara and HM and some of these bigger players are responding to that is You know, Zara, for example, is moving a bit more up market. They're trying to reduce waste. I had the opportunity to visit their headquarters in Spain and see like the it's almost like a If you were like managing a uh the lift off of a space shuttle. It was like this like uh room filled with computers and data and like everything that's going on in their supply chain all around the world. It was like fascinating.

H and M. historically has been one of the businesses that's been most focused on sustainability, but they've really lost their creative edge. I think the biggest thing we need to change is customers' relationships with clothes. And the industry has a big part to play in that. I it it's interesting. I I never realized that sort of the volume of waste that was from clothing that's never worn. And that in some ways the model that she and Temu are using are reducing that aspect of it.

Even as what they're producing maybe is even more disposable than ever. Exactly. Yeah. If there are a handful of things that I should be following, focused on, or understand about the fashion right now, that I should take away from this conversation. W what are they? What do I keep my eye on? I would keep my eye on artificial intelligence because just as

It is likely to change and disrupt. Pretty much everything. In business. And creativity. It's going to be really interesting to see how

leaders on both the creative and the business side of fashion begin to Integrate. A I tools. And processes into the way They run the business, but also the way they run the creative process. And some of the designers I'm talking to are also already

Using some of these tools. The second is Uh the rise Of the Indian fashion market. You know, India

over the next decade is going to become the third largest economy in the world. after the United States and China, a market that every fashion CEO I know. Is it starting to look at And I guess the third thing is something that we already touched on, which is, you know

Fashion's role. In Addressing the climate crisis, you know, fashion is one of Uh the highest Emitting

most damaging industries In the world. And as a Moral responsibility Um but also

As an economic uh imperative reducing waste in fashion Is also going to increase profitability in fashion. And so really focusing on this waist area, I think is really, really important. Um, not just because, you know. We're living in this planet that's getting hotter and hotter and hotter, but also because

This is an industry that's gonna be more challenged over the next 10 years. And I think people are gonna be looking for ways to cut costs and deliver more efficiently to customers. And a big part of that will come from reducing waste. Imran As always, a great education and great entertainment to Catch up with you. This has been great. Bob, it's been such a pleasure. To chat with you.

Imeron's discussion reminds me just how complex and multifaceted all businesses are. Paris Couture Week might leave the impression that artistry alone drives the fashion industry, but there's also supply chains and gross merchandise value and AI and more. What Imron illuminates is how multi-disciplinary we all need to be in the evolving marketplace. That's hard and it's exciting.

Whatever gets us inspired, whether it's a muslin coat or a spreadsheet. We'll need it. I'm Bob Safian. Thanks for listening.

Rapid response is a wait what original. I'm Bob Safian. Our executive producer is Eve Tro. Our producer is Alex Morris. Assistant producer is Masha Makutonina. Mixing and Mastering by Aaron Bastanelli. Theme music by Ryan Holiday. Our head of podcasts is Lital Malad. For more, visit rapidresponsshow.com.

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