Asket, a menswear brand founded in 2015, grew an average of 150% every year in its first five years. It’s made gross merchandise sales of $10 million through direct-to-consumer channels and broken even on the business. Its strategy now is to slow down growth.
It’s typical for young businesses to have high levels of growth in the first few years and then plateau, but rather than an unfortunate inevitability, this is a conscious decision by Asket to cap growth in line with the brand’s mission to build “a world free of fast consumption.”
“From here on, we’re aiming to grow at a maximum of 60% per year in order to make sure that we do things right,” says cofounder August Bard Bringéus. “Apart from 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 is to the climate crisis.”
The fashion industry has thrived on the fast fashion model perpetuated since the 1990s which has seen the cost of clothing plummet, while consumption has sky rocketed. The global fast fashion market is expected to grow from $25.09 billion in 2020 to $30.58 billion in 2021 and grow again to $39.84 billion by 2025, according to Researchandmarkets.com’s Fast Fashion Global Market Report 2021.
Asket is not alone in its belief 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 objectives to reduce the industry’s impact, the first of which is to “reduce the volume of new physical clothing.” It found that 4 billion items of apparel were bought in the U.K. alone in 2019.
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Kate Fletcher, a researcher in sustainable fashion and co-author of Earth Logic, a framework for creating solutions which prioritize planet over profit launched at London Fashion Week in February 2020, believes a sustainable future cannot exist without addressing this issue. “Within the work in fashion and sustainability is a lack of criticality, and a lack of people being prepared 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 events on sustainability, is themed around “prosperity vs. growth.”
“It is one of the biggest challenges that the earth, and this industry, is facing right now: how do we redefine what ‘prosperity’ means and what ‘growth’ means?” says Morten Lehmann, chief sustainability officer at Global Fashion Agenda who organize the event. “Is value only growth and volume, or is it how we create value to both the supply chain and the workers, the artisans out there, to consumers and, of course, also to stakeholders and shareholders?”
Global Fashion Agenda released a report last year which found that if fashion continues on its current trajectory, it will miss its 2030 carbon emissions reduction target, set in line with the Paris Climate Agreement, by 50%.
However, Lehmann believes that looking at growth as something that incorporates environmental and social impact, as well as financials, can make smart business sense. “[Investors] know that climate crisis is not a thing that might happen, and the biodiversity crisis is not something we are questioning, it’s happening. Access to cotton and polyester will not be the same in the future and the prices on these raw materials will drastically change,” he says.
While the problem might be industry-wide, brands are figuring out approaches to tackling it within their own businesses.
Tackling Degrowth At Brand Level
For Asket, this is through its permanent collection of seasonless designs. It does not hold sales and the only changes made to its collection each year are improvements to existing designs or the addition of a new product category, such as its swim short launched this summer. A womenswear line has also just launched.
“The way we grow now is by getting more people to buy fewer garments, rather than constantly upselling to our existing customer base by telling them that what you bought yesterday is no longer on trend,” Bard Bringéus explains.
For larger businesses, circular initiatives, such as reselling and recycling, which reduce the need for new product can provide a route to degrowth while providing new revenue opportunities.
Ecommerce retailer Zalando has created “Zircle,” an app where consumers can sell fashion products back to them for credit. Zalando then resells it through its 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 life 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 approach of the ‘take, make, waste’ and we need to move into a circular approach,” says Kate Heiny, director of sustainability at Zalando.
The Ellen MacArthur Foundation’s New Textile Economy report from 2017, found that by moving to a circular system, the industry could unlock a $560 billion economic opportunity through new business models.
Heiny says that it’s not just about revenue generated from new models, but also positive brand equity. “We view every euro, and every minute that we spend bringing sustainability to life, not as a cost, but as an investment, in order for us to stay relevant. We expect a return on customer satisfaction and engagement with sustainability services.”
For Birdsong, a London-based label founded in 2014 with the purpose of providing work for women who face barriers to employment, degrowth is about fairer distribution of profits. “Growth at the expense of others is one thing, and growth that’s redistributed to all is another,” says Sophie Slater, the brand’s founder. “We still want to grow because we’re redistributing that growth to everyone in our supply chain. That means our workers get more hours, paid at 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 reselling platform that gives a cut to participating brands each time one of their products is resold.
A New Way To Do Business
There are obstacles to trying to build a fashion business while advocating for slower consumption. Neither Asket or Birdsong sell wholesale to avoid the pressure from retailers to produce new collections, and their pool of potential investors was narrowed down to those who share their purpose. Asket has raised two rounds, totalling $1 million, from angels, friends and family, and Birdsong’s funding came from social impact investors who measure the positive societal impact of the business as well as profits.
Bard Bringéus says that the finance sectors needs to make changes to accommodate more types of businesses like his. “Predominantly, financing is based on that short term horizon, which is a huge challenge,” he says. “What really needs to happen to change the finance market, and the stock market, is regulation that just makes it harder to continue to extract resources and exploit people and planet at the rate that we are now.”
Pressure is starting to mount on brands to address the problem. Fashion Revolution’s Transparency Index, which rates 250 of the biggest apparel brands on their supply chain disclosures each year, has started including information on production output. The 2021 Index found only 14% published the annual quantity of products produced. When it came to circularity schemes, 27% offered a recycling program, 18% offer product repairs and 14% had alternative business models such as renting and reselling in place.
At first glance, degrowth sounds counterintuitive to good business but in reality, it’s about better business with lower volumes. It requires creative thinking around the ways fashion operates; an exciting challenge for those who want to embrace the task. Of course, consumers will have a role to play too by reducing demand for new apparel, but those who can supply them with their fashion fix in ways that don’t over extract natural resources will be at the frontier of a brave new fashion industry.