What is fast fashion and who is the King of Fast Fashion? He made $1 billion today.

October 11, 2024

What is fast fashion and who is the King of Fast Fashion?

Fast fashion is a "quick copycat" business model in the clothing industry. Fast fashion copies or adapts high-end fashion trends to quickly produce and distribute look-alike designs sold for less. It allows the general public to wear the less expensive knockoffs of high-end fashion. Fast fashion relies on cheaper materials, cheaper labor, and cheaper fabrication methods that can have adverse environmental and societal impacts. 

The trick of Fast Fashion is to be: fast, affordable, trendy, and scarce (FATS).

• Fast: Fast fashion brands typically take as little as a few weeks to get new styles from the design phase to the retail shelves, compared to traditional fashion cycles that can take months. This is made possible by copying the design of others and send them to production and distribution by highly efficient supply chains.

• Affordable: Fast fashion focuses on mass-producing high-end-looking clothing at low costs, allowing brands to sell their products at much lower prices compared to high-end designers or traditional retailers. Fast fashion often uses inexpensive materials and labor in less developed countries. 

• Trendy: Fast fashion companies rely on popular trends seen on the runways, in magazines, or on social media, quickly replicating these styles for the mass market. This means they are highly reactive to what’s currently “in style,” and customers can purchase versions of what celebrities and influencers are wearing almost immediately.

• Scarce. Fast fashion brands introduce new styles continuously, often several times a week. This creates a sense of urgency among consumers to buy items before they are gone, encouraging frequent store visits and increasing sales.

Fast Fashion is controversial due to impacts in three categories: overconsumption, labor, and environment (OLE). 

• Overconsumption: Fast fashion's emphasis on constantly changing fashion promotes a culture of disposability, where clothing is worn only once or a few times before being discarded. Fast fashion clothing is also less durable than higher-quality garments and tends to wear out more quickly, contributing to a cycle of short-term use and disposal.

• Environment: The fast fashion model encourages overproduction, leading to larger amounts of waste. The fashion industry is a major contributor to pollution from textile chemicals used in garment production. Furthermore, the use of synthetic fabrics (like polyester) contributes to microplastic pollution.

• Labor: Many fast fashion brands have been linked to unethical labor practices, including poor working conditions and low wages in abusive garment factories ("sweatshops") in developing countries.

Some of the most well-known fast fashion brands include:

• Zara (part of Inditex)
• H&M
• Forever 21
• Primark
• Fashion Nova
• Shein (ultra fast fashion)
• Boohoo

In response to growing criticism, some of these brands are starting to introduce more sustainable practices, such as using recycled materials, reducing waste, and committing to improving the working conditions in their supply chains. However, these efforts are often met with skepticism, as the core business model of fast fashion — high-volume, low-cost, trend-driven production — remains fundamentally at odds with long-term sustainability goals.

Fast fashion has revolutionized the clothing industry by making runway trends accessible to a wider audience at low prices. However, fast fashion comes with high environmental and societal costs.

Amancio Ortega: The King of Fast Fashion

Amancio Ortega is today the 8th richest human on Earth. Mr. Ortega is the founder of Inditex (Industria de Diseño Textil, S.A.), one of the largest fast fashion retailers in the world. Inditex owns several major clothing brands, including the highly popular Zara, as well as Massimo Dutti, Bershka, Pull&Bear, Stradivarius, Oysho, Uterqüe, and Zara Home.

Amancio Ortega is 88 years old. He was born: March 28, 1936, in Busdongo de Arbas, León, Spain. Ortega started working at a young age in various textile businesses in Spain, where he learned about the fashion and retail industry. 

In 1975, Ortega founded Zara, a small store in A Coruña, Spain, selling affordable, trendy clothing. His approach to fashion design revolutionized the industry by producing designs that mirrored runway trends but at lower prices and at a faster rate. In 1985, Ortega founded Industria de Diseño Textil, S.A. (Inditex) as a holding company for Zara and other brands. 

Today, Inditex, which is headquartered in Arteixo, Galicia, Spain, is enjoying a record high market capitalization of $185 billion. Something tells us that we should begin shorting the stock. However, Inditex is the biggest fast fashion group in the world, operating over 7,200 stores in 93 markets worldwide and has some moat on the industry. Inditex will probably have strong sales during the holiday season this year. In recent years, Inditex has also made commitments to improve sustainability in its supply chain, using more eco-friendly materials, and could become a leader in a cleaner fast fashion industry.

Ortega is known for his low-profile lifestyle despite his wealth. He has made significant contributions to charitable causes, primarily through the Amancio Ortega Foundation, focusing on education and health initiatives. In 2011, Amancio Ortega stepped down from his role as chairman of Inditex. However, Ortega remains the largest shareholder of the company and still has significant influence over its direction. Today, October 11, 2024, Amancio Ortega's fortune is estimated at $130 billion.

It pays to be copy, and to be a pioneer at it. Whatever you get dirty along the way, you can promise to clean later on. 

Now you know it. 

Live well. Die better. Enjoy