As someone who has cut my teeth in the fashion industry for the last decade, this article resonated with me. It was very well written and thoughtful

However, it left out one dirty industry secret that I believe truly caused the fashion crash

https://www.nytimes.com/interactive/2020/08/06/magazine/fashion-sweatpants.html

2/ The dirty industry secret is what's called 'Guaranteed Margins'

These are agreements between Brand X and Retailer Y, that sales of Brand X for Retailer Y will maintain certain quarterly and annual Gross Margin %

3/ As long as Brand X sells through its product in Retailer Y at a reasonable clip, this is a harmless arrangement

However, when Dept Stores sales, traffic, and sq ft expansion flatlined, fashion brands realized that the battle had become a land-grab for rack space

4/ So brands started to use this arrangement as a blank cheque:

More space =
More racks =
More units =
More Sales

Retailer Y was fine with this approach from Brands, because their downside was capped by the Guaranteed Margin agreements

5/ This quickly created a bubble

Too much inventory + declining traffic and sales = markdowns

It didn't take long for one Brand X to miss its sales expectations, which required them to lower prices

This requires Brand Z to also lower their prices

This cascades

6/ Retailer Y is still feeling OK about all of this, because the lower prices actually invite more traffic and customers into the stores

For while there is a sugar rush of increased sales and stable margins for Retailer Y

Brand X is also scaling up their production

7/ This scale allows Brand X to lower their production costs thus improving their margin, giving them more comfort with the Guaranteed Margin agreement despite the markdowns

And the cycle continued for years and years

8/ At this point Retailer Y is just a sea of markdown racks

New weekly product drops are hastily executed on tattered racks and then promptly marked down to give way to the next product delivery that follows on

The customer has lost respect for Brand X and Retailer Y

9/ To offload the excess inventory, Retailers open off-price stores in droves. They argue that off-price is a 'different customer' and that sales are incremental

Nordstrom Rack
Saks Off-5th
Macys Backstage
Neiman Marcus Last Call

Etc

10/ Customers no longer bother going to the 'full-price' version of the retailer, knowing with a little patience that more than enough product is going to make its way through this meat grinder and into their shopping bags at a much lower price

And thats what killed fashion