Fashion brands must stay as lean as possible.
Or they won’t survive in today’s market.
If you look at the image below, average operating margins for fashion brands rarely go above 15%.
Yes, there are exceptions like Hermรจs at 45%, but most brands don’t come close to that.
I’ve audited over 100+ fashion brands. The ones growing while staying profitable usually sit between 10 to 15% net operational margins.
Margins are already slim, and on top of that, this industry has a brutal cashflow cycle with heavy stock exposure.
You often need to buy a lot, and often months in advance, depending on your production lead times and MOQs.
The Current Reality
So, what’s the current reality from someone who sees behind the scenes of tens of fashion brands every month?
Most are either breaking even or losing money.
And don’t get fooled by people sharing impressive numbers online.
If you saw what I see, you’d know many of them are not winning at all.
They’re coping. Hard.
๐ช๐ต๐ฎ๐ ๐๐ฒ๐ฝ๐ฎ๐ฟ๐ฎ๐๐ฒ๐ ๐ฎ ๐ฏ๐ฟ๐ฎ๐ป๐ฑ ๐๐ต๐ฎ๐ ๐ด๐ฟ๐ผ๐๐ ๐ฝ๐ฟ๐ผ๐ณ๐ถ๐๐ฎ๐ฏ๐น๐ ๐ณ๐ฟ๐ผ๐บ ๐ผ๐ป๐ฒ ๐๐ต๐ฎ๐ ๐๐๐ฟ๐๐ด๐ด๐น๐ฒ๐?
Resourcefulness.
I’ve seen brands doing โฌ10M per year with 7 people and no office.
And others doing โฌ80K per month with 5 people and an expensive London office.
In fashion, even small inefficiencies can break you.
Overspend 5% on fixed costs, 4% on stock, 6% on ads, and suddenly you’re not profitable anymore.
Every Decision Must Move the Needle
๐ง๐ต๐ถ๐ ๐ถ๐ ๐๐ต๐ ๐ ๐ธ๐ฒ๐ฒ๐ฝ ๐ฟ๐ฒ๐ฝ๐ฒ๐ฎ๐๐ถ๐ป๐ด ๐ถ๐: ๐๐ต๐ฒ ๐ฏ๐ฟ๐ฎ๐ป๐ฑ๐ ๐๐ต๐ฎ๐ ๐๐ถ๐ป ๐บ๐ฎ๐ธ๐ฒ ๐ฑ๐ฒ๐ฐ๐ถ๐๐ถ๐ผ๐ป๐ ๐๐ต๐ฎ๐ ๐ถ๐ป๐ฐ๐ฟ๐ฒ๐ฎ๐๐ฒ ๐น๐ฒ๐๐ฒ๐ฟ๐ฎ๐ด๐ฒ ๐ฎ๐ป๐ฑ ๐ฐ๐๐ ๐๐ฎ๐๐๐ฒ.
If something doesn’t move the needle in a meaningful way, and you don’t have cash lying in the bank, don’t do it.
Every decision should lead to: “It either moves the needle or it’s not worth it.”
Thinking of launching a variation of a product that’s only performing okay? Don’t.
Spending 45 minutes a day in team stand-ups? Use that time to record a founder video instead.
Thinking of renting that office? Don’t. Use that money to pay influencers to film unboxings and reviews for your socials and ads.
We all have the same 24 hours.
How we use them is what makes the difference.
A salesperson can knock on doors all day or spend that same time building content online.
We both know who wins in the long run.
So ask yourself: Is what you’re doing today actually moving the needle? If not, cut it.
Your brand’s future depends on it.
