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 Hermès 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.
𝗪𝗵𝗮𝘁 𝘀𝗲𝗽𝗮𝗿𝗮𝘁𝗲𝘀 𝗮 𝗯𝗿𝗮𝗻𝗱 𝘁𝗵𝗮𝘁 𝗴𝗿𝗼𝘄𝘀 𝗽𝗿𝗼𝗳𝗶𝘁𝗮𝗯𝗹𝘆 𝗳𝗿𝗼𝗺 𝗼𝗻𝗲 𝘁𝗵𝗮𝘁 𝘀𝘁𝗿𝘂𝗴𝗴𝗹𝗲𝘀?
Resourcefulness.
I’ve seen brands doing €10M per year with 7 people and no office.
And others doing €80K 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
𝗧𝗵𝗶𝘀 𝗶𝘀 𝘄𝗵𝘆 𝗜 𝗸𝗲𝗲𝗽 𝗿𝗲𝗽𝗲𝗮𝘁𝗶𝗻𝗴 𝗶𝘁: 𝘁𝗵𝗲 𝗯𝗿𝗮𝗻𝗱𝘀 𝘁𝗵𝗮𝘁 𝘄𝗶𝗻 𝗺𝗮𝗸𝗲 𝗱𝗲𝗰𝗶𝘀𝗶𝗼𝗻𝘀 𝘁𝗵𝗮𝘁 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲 𝗹𝗲𝘃𝗲𝗿𝗮𝗴𝗲 𝗮𝗻𝗱 𝗰𝘂𝘁 𝘄𝗮𝘀𝘁𝗲.
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.
