As globalization has slashed the cost of clothing production over the past forty years, the fashion industry has quietly shifted. Prior to the 1990’s, developing and manufacturing different clothing styles was expensive and time-consuming. Brick and mortar retailers had to be cautious when purchasing the upcoming season’s stock, as unsold inventory could be quickly rendered worthless by lack of demand. These checks and balances within the market served to dampen production and force a level of restraint between producers, retailers, and consumers. Producers would only risk making what retailers could reasonably purchase, and retailers would only purchase what consumers might reasonably buy. As the cost to produce a t-shirt fell from around $12 in 1980 to $3 by 2010, the financial risk of unsold inventory collapsed with it. No longer was fashion governed by the seasons or by the cost of inventory. It was governed by speed.
But with that speed came the erosion of all checks and balances. Retail buyers no longer feared unsold inventory. Blink, and the racks would be filled with cheap, new styles. The risk was officially mitigated.
Or was it?
While a floor manager thirty years ago would lose sleep over unsold inventory, overproduction has become the new foundation of modern fashion. Retailers discovered increasing sales was as simple as increasing the volume of new items on their racks. Globalization made this possible by delivering something consumers reliably crave, novelty.
Every year, 20-30 billion garments are left unsold. Brands and retailers have several options for dealing with excess inventory: donate, recycle, resell through secondary markets, or destroy. Unfortunately, the first three options require time, labor, and coordination, making them unattractive choices to companies focused on efficiency and turnover. Even off-price retailers like Marshall’s and TJ Maxx are no longer true resellers. Much of the clothing on their racks is manufactured specifically for the off-price market rather than sourced from excess inventory. This leaves many retailers with the cheapest and quietest option: destruction.
For decades, excess inventory disappeared silently. Without regulation or required reporting, it was companies could simply send it to a landfill, ship it to developing markets, or destroy it. With its landmark anti-waste ruling which makes destruction of non-food goods illegal, the French government is doubling down on their war against ultra-fast fashion. They are forcing large companies to publicly disclose how much unsold stock they discard attempting to pressure brands to produce less. With estimates of 630 million euros worth of unsold goods being destroyed in France alone, it is encouraging to see the EU now taking up similar measures. However, this law bans the symptom of overproduction, not the incentive behind it.
As long as overproduction remains profitable, brands will find ways to accomplish it. Without a meaningful shift in consumer behavior and fines that penalize low-quality clothing production, France may see an explosion of resale markets, not a reduction in garments produced. In order to truly curb waste in the industry, policymakers will need to target their legislation further up the supply chain. Their previous rulings which restrict ultra-fast fashion brands like Shein from advertising could work in tandem with the anti-waste ruling to slow the environmental Chimera that is overproduction. However, with the legislation still moving through the glacial European regulatory process, we may not know its true impact, good or bad, for years to come.
Government’s attempts to regulate behavior regularly runs into the same problem: incentives are powerful. Fashion’s dilemma reminds me of the challenges leaders face when trying to reverse low birth rates. When governments apply financial incentives, giving birth becomes a money transaction instead of a personal decision. The results are often the opposite of what are intended. In Georgia, however, a widely respected priest approached the problem culturally rather than with policy. He made the unusual promise to be named godfather to every third child born to an Orthodox Christian family. He has since baptized over 40,000 babies, and economists believe his promise had a measurable impact on Georgia’s long-term birthrate. It was only through the actions of an influential figure that things started to change.
The fashion industry may need a similarly influential voice to turn its rudder away from the iceberg that is overproduction. Government action alone will not suffice. As long as the market continues to seek out the cheapest labor, production costs are unlikely to rise enough to discourage companies from producing as much as possible, as quickly as possible. Without cultural values shifting back towards high-quality, long-lasting garments, companies will react to regulation as they always have: by finding loopholes. Until consumers demand fewer, better pieces, the fashion industry will continue to resist change. Culture, not regulation, will ultimately decide whether fashion continues along its current path, or returns to craftsmanship and restraint.
Until next time,
Elise
