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New report says fast fashion’s value is on a steady decline

According to the latest Brand Finance Apparel 50 report, the value of fast fashion giants such as H&M and Zara is decreasing as sustainability and innovation become the key drivers of consumer choices.

Though it may not seem like it if your Instagram is full of influencers flaunting SHEIN hauls, the fast fashion market is losing its value – at least according to a new report by Brand Finance.

Released this week, the research homes in on sustainability credentials as the primary driver of consumer decisions. This is evident when observing the continued success of brands that have set strong eco-goals, as well as the substantial growth of the luxury market.

A great example of the former is Nike. Despite losing a 6 percent drop in its overall brand value, it has continued its nine-year reign as the world’s most successful apparel company, valued at USD 31.3 billion.

It’s no coincidence that it also has the highest Sustainability Perceptions Value (SPV) at USD 2.3 billion. The report argues that Nike’s ‘Move to Zero’ campaign was extremely successful in communicating its sustainability goals to its global consumer base.

Not to mention, Nike is constantly innovating – a quality that retains existing customers while attracting new ones. The brand seems to never run out of unique and interesting colourways, iconic individuals to collaborate with, and old styles to revive from its archive.

On the contrary, fast fashion is falling behind on all fronts, from sustainable practices to innovation, and overall brand identity.

Fast fashion is on the decline

With concerns about climate change growing with the turn of each season, consumers are becoming more conscious about the impact their purchases have on the planet’s well-being.

A large part of ensuring our individual carbon footprint stays low involves assessing the sustainability credentials of brands found on high streets around the globe. Unfortunately, many of them aren’t impressive in this area.

This is evident when assessing the popular Swedish retailer H&M, which has seen its brand value drop 26 percent, with an overall value of USD 9.4 billion. Meanwhile, Zara’s brand value is down 15 percent, worth USD 11 billion.

Authors of the Brand Apparel 50 report attribute the weakening of these brands to their ‘vague communication and a lack of transparency regarding sustainability.’

H&M was recently exposed for using high levels of synthetic materials in its clothing, even in its supposed ‘Conscious Collection’. Even these ‘eco-friendly’ collections make use of materials are derived from fossil fuels, a key driver of pollution and climate change.

Though this revelation saw the Swedish retailer hit with a lawsuit, it is not alone in lying about sustainability.

So many multinational companies are guilty of using greenwashing tactics that EU regulators are cracking down on the use of wishy-washy terms like ‘eco,’ ‘environmentally-friendly,’ ‘carbon neutral,’ and ‘natural’ when made without substantial backing.

While this is sure to change the marketing game, it is becoming increasingly difficult for brands to create the illusion of sustainable practices. Thanks to an abundance of informational resources online (a great one is GoodOnYou), it’s getting harder to fool customer bases.

In that light, it shouldn’t be shocking that many luxury brands are seeing major growth.

FASTEST-GROWING APPAREL (CELINE) [DIOR ROLE 28% Brand Finance Source: Brand Finance Apparel 50 2023 BRANDS 2023

Major leaps for luxury

As customers lean further into sustainability and strong brand identity, luxury brands with a strong heritage are becoming a safe bet.

The vast majority of such brands have made lifelong commitments to using only the finest materials, creating many products in-house, and paying their workers fairly. Many also have repair guarantees if their products show signs of damage and wear.

In terms of production, their collections are often limited. This ensures that there is little deadstock to deal with, less material waste sent to landfills, and a product that is long-lasting once it is sold.

Celine was named the fastest-growing apparel brand of the past year. Its brand value increased by 51 percent, which authors of the report credit to it being acquired by the innovative luxury powerhouse LVMH in 2018.

Also thriving are Dior, Louis Vuitton, and Chanel with an increased value of 46 percent, 12 percent, and 27 percent respectively.

From all of this, we can conclude that sustainability, innovation, and quality are important factors for consumers of today.

Though the market is typically unpredictable, it’s likely that a crackdown on the practices of fast fashion companies combined with an appetite for well-made, planet-friendly products will continue to drive these trends for years to come.