Fashion Industry Profile: Chapter 5. The Business of Fashion

Fashion Business Report by Consulting Firms

Once a consultant, always a consultant 🙂 Although I worked in the consulting industry for four years only, consulting may have a lifelong impact on me. Even after I redirected my career into fashion, I am always interested in how consultants are involved in the fashion business. One noticeable fact is that former consultants are scattered in the executive committees of big fashion groups. For instance, among LVMH’s 11 executive committee members, three have consulting working experience. Pierre-Yves Roussel, Head of Fashion Group, is a former McKinsey partner.[1] DFS executive Philippe Schaus worked for The Boston Consulting Group.[2] Strategy executive Jean Baptiste Voisin is another former McKinsey partner. [3]

LVMH

LVMH2

LVMH3

Consulting firms usually have a Strategy & Operations sector, or from the industry perspective, a retailing or consumer business sector. However, as far as I know, no sector such as “fashion” or “luxury goods” exists. Nevertheless, when a fashion company decide to become large-scale or global, it is very natural to employ management consultants to  help solve all manner of strategic problems. Depending on the assignment, consulting companies can offer end-to-end solutions or more surgical advice and tackle challenges ranging from supply chain optimization to international growth.[4]

How the top consulting firms involve themselves into fashion business is also interesting. Below summarizes the trend and the latest reports from those leading consulting firms.

1. McKinsey & Company

The consulting No.1 company McKinsey released the first joint fashion report: The State of Fashion 2017. This BoF and McKinsey’s in-depth report on the global fashion industry focuses on the themes, issues and opportunities impacting the sector.[5]

McKinsey.JPG

2. The Boston Consulting Group

BCG is renowned for its strength in consumer business. It also had some collaborations with BoF back in 2004 when BoF launched its Careers section, conducting a study on the race for talent in fashion and luxury.[6]

The BCG-BoF study includes an in-depth survey of 60 luxury and fashion companies worldwide in March 2014 and interviewed many industry executives about their talent needs and practices. Thirty percent of those surveyed were from France and 25 percent from the UK, with others from a mix of countries including Italy, Hong Kong, Spain, Canada, and India. The research spanned a wide range of luxury and fashion companies, from large corporations to small independents. Forty percent of the companies surveyed have more than $1 billion in annual revenue; 15 percent have between $10 million and $50 million in annual revenue.

BCG also has released articles on fashion and luxury in its annual Consumer Value Creators Series, as well as a luxury market overview and forecast.

3. Bain & Company

Bain has a long tradition of releasing luxury industry insights. For example, its Luxury Goods Worldwide Market Study, Fall-Winter 2016 is the 15th edition of the Bain Luxury Study, analyzed recent developments in the global luxury goods industry.[7]

Bain.JPG4. Deloitte Consulting

Following 2014 and 2015, Deloitte released its global luxury market report Global Powers of Luxury Goods 2016. This report identifies the world’s top 100 largest luxury goods companies and analyzes them from multiple perspectives. It also looks at industry trends, M&A activity, and the conditions within the global economy.[8]

Deloitte


[1] “Pierre-Yves Roussel,” LVMH, https://www.lvmh.com/group/about-lvmh/governance/executive-committee/pierre-yves-roussel/.

[2] “Philippe Schaus,” LVMH, https://www.lvmh.com/group/about-lvmh/governance/executive-committee/philippe-schaus/.

[3] “Jean Baptiste Voisin,” LVMH, https://www.lvmh.com/group/about-lvmh/governance/executive-committee/jean-baptiste-voisin/.

[4] “How 4 Management Consultants Broke Into Fashion,” Business of Fashion, October 29, 2014, https://www.businessoffashion.com/articles/careers/4-management-consultants-broke-fashion.

[5] “The State of Fashion 2017: Download the Report,” Business of Fashion, December 2, 2016, https://www.businessoffashion.com/articles/news-analysis/the-state-of-fashion-2017.

[6] “BCG-BoF Report | The Race For Talent in Fashion and Luxury,” Business of Fashion, April 28, 2014, https://www.businessoffashion.com/articles/careers/bcg-industry-report-race-for-talent-in-fashion-and-luxury.

[7] “Luxury Goods Worldwide Market Study, Fall-Winter 2016,” Bain & Company, December 28, 2016, http://www.bain.com/publications/articles/luxury-goods-worldwide-market-study-fall-winter-2016.aspx.

[8]”Global Powers of Luxury Goods 2016,” Deloitte, https://www2.deloitte.com/global/en/pages/consumer-business/articles/gx-cb-global-powers-of-luxury-goods.html.

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