With ethical fashion now becoming more established and recognised in the fashion industry and by the general public at large (fairtrade, sustainable and organic companies have now been trading for a number of years, their products are more accessible than ever and many trade shows have specific ethical sections) we thought we would give a brief critique on this market to try and illicit views from yourselves on the current state of the market and its future direction.

One thing that continues to strike us is the sheer volume of activity in the ethical fashion market, we are never amazed at the number of brands that there are, the number of new brands that start up and the column inches that ethical fashion commands in the press. This at face value would indicate a very healthy and growing market. There is no doubt that the ethical fashion market is growing rapidly. The Co-Op’s ethical consumerism report 2009 notes that ethical expenditure has grown almost threefold in the last 10 years. In fact ethical clothing has grown from £4m to £172m between 1999 and 2008 representing a whopping 4,300% increase.

However if you dig a little deeper and look behind the column inches there is certainly another story of struggle and hardship of a sector struggling to gain size and economies of scale to break into the mainstream. Despite the growth story, the sector remains tiny in comparison to both total ethical expenditure and the clothing market as a whole. For example the £172m spent on ethical clothing in 2008 represents only 0.48% of the total spend on ethical products in that year (ethical banking and finance lead the way at £6,976m and £6,825m respectively) and represents only 0.55% of the UK clothing spend in total that year (per ONS statistical data Annual Business Inquiry Report).

As in most industries these days, to be successful in the clothing industry requires scale. This gives a large number of benefits including being able to meet factory minimums on the purchase of material and in the make up of garments as well reducing input prices to provide profit. In addition scale provides an outlet that is readily found and easily shopped by the public. New ethical brands for example rarely have the budgets to open a store on the high street  (if they did they would be unlikely to be able to afford to produce a wide enough range to fill a shop) and it is becoming increasingly expensive and difficult to be seen on the internet above established stores with large marketing budgets.

The difficulty of achieving this scale has been demonstrated across the industry. Peopletree, perhaps one of the best known and established ethical clothing  brand set up in the UK in 2001 but 6 years later at the end of 2007 only reported £1.4m in sales and was still making a loss of £366,000, in fact accumulated losses to that date were then in excess of £2m. Ascension (formerly Adili) launched in 2006 to great fan fare and received substantial funding (close to £5m) was sold in March 2010 for £1 having never achieved the scale or profits it craved. Devidoll a site selling high end ethical items is currently on sabbatical. One ethical brand that has managed to break out of this was howie’s now having stores in Bristol and London’s Carnaby Street. Could they have achieved this without selling out to Timberland?

So what do we think about the ethical clothing market going forward. Challenges of scale and breaking into the mainstream against high street multiples and supermarkets will continue to be the major challenge. The industry’s growth rate will continue to remain very fast (albeit from a small base) from both existing brands, new brands and through ethical initiatives in the larger mainstream players such as organic ranges at Marks & Spencer, Tesco’s and Sainsbury’s. The increased emergence of celebrity endorsement in the ethical arena will further help. However unfortunately demonstrated by the success of brands like New Look, George at Asda and Primark, a large majority of the UK population for a long time yet will continue to shop on a value based proposition, particularly in the current economic climate with little regard to the impact on the environment and the workers who make the clothes.

It is all our responsibility to continue to push the ethical agenda in the clothing industry to raise awareness and to try and continue this slow change in this vast market. It will be very hard work overcoming the disadvantages (economically) of producing ethically but as with most things you get out what you put in and if successful the hard work will be evident in improved working conditions and an improved environment for everyone.  We implore all customers, suppliers and brands to continue to support ethical clothing, raise awareness of the issues and hope as a powerful group in this sub sector become a truly viable alternative to the current high street offering.

Co-Founder

Mark Swire