There’s an interesting little nugget in today’s Hugo Boss Q3 results: part of the reason for the 14% fall in net profit of the German powerhouse was due to “the switch to four equally sized collections a year,” according to chief executive Claus-Dietrich Lahrs. Yes they also talked about the slowdown in China, but they didn’t seem that bothered by it, and this seemed more significant. It made me think, once again, about the gap between the fashion show system and the shopping system – and wonder if the current financial system is not, after all, responsible for the gulf. Not because it demands constant growth (though that’s part of it), but because it gets people thinking in quarters as opposed to halves.
The conversion had associated manufacturing and delivery costs, and, of course, they had to educate the consumer about the fact there was new stuff in store. Of course, in the long run this should actually up revenues in all quarters. As Mr Lahrs said, the idea is to “incentivize customers to visit their shops regularly.” And he and his gang expect winter collection sales to be up.
It did make me think, once again, about the gap between the fashion show system and the shopping system – and wonder if the current financial system is not, after all, responsible for the gulf. We tend to see it as a creeping moral corruption, but maybe it’s simply straightforward numerical congruency: if you are reporting four times a year, it makes sense to have four collections to report on.
Granted, this is extrapolation, because not every brand is public. However, it seems to me that since most of the big, industry-driving brands are listed, it’s only logical to assume their behaviour will influence everyone’s behaviour.
Indeed, I wonder if it’s this development that is really behind the all-deliveries-all-the-time situation we are in, as opposed to the fact that everyone can see stuff on-line as soon as it is shown, that early adopters all demand the ability to buy winter coats in July, and shopping has turned into a social activity.
Maybe, instead of blaming culture and shameless marketers for our transformation into serial shoppers, we should look to the need for quarterly reports to explain the evolution from the two-show system to the four-collection cycle. It’s not nearly as sexy or morally provocative to discuss financial reporting as consumption, but – well, Occam’s razor, and all that.