Fashion Week: Profitable investment or poker move?

Fashion week, while a true showcase for the fashion industry, is a complex strategic operation. Paris Fashion Week kicked off on 23 September, offering experts the chance to take a look behind the scenes of such an event. Recent reports reveal the fundamentals of this industry: the costs are exorbitant, but so are the profitability stakes. So what is the real return on investment (ROI) for brands?

A major strategic investment

Organising a fashion show is a huge investment in a risky communication project. According to a recent study by the Institut Français de la Mode (IFM), the cost of a luxury fashion show can range from 500,000 to five million euros. Although this amount may seem high, it covers a multitude of essential cost items.

First, the rental of the venue. Renting iconic locations like the Grand Palais or the Louvre can cost between 100,000 and one million euros for a few hours, depending on the event and the necessary adjustments. Some brands, like Chanel, strategically invest in the restoration of historic locations in exchange for exclusive access. For example, Chanel invested 25 million euros in the renovation of the Grand Palais last year.

Another expense is the custom-made decors, often made by artists or craftsmen, which can cost hundreds of thousands of euros. For fashion houses such as Dior or Louis Vuitton, the decors are important elements of the staging and can represent a significant part of the total budget.

Then there is the production of the clothes. Every garment shown at a fashion show is the result of exceptional craftsmanship and the use of high-quality materials. Production costs can therefore skyrocket and be 20 to 50 times higher than those of ready-to-wear, depending on the complexity of the design.

International talent is another important investment. Hiring world-famous models, as well as makeup and hair stylists, contributes to the visibility and impact of the event. Inviting celebrities, influencers, journalists and international buyers also entails significant logistical costs, especially for travel and accommodation. Hiring top models like Gigi Hadid or Kendall Jenner costs around 10,000 to 50,000 euros per show. Renowned makeup artists and hair stylists can charge 10,000 to 30,000 euros for their services. The costs of hosting celebrities, influencers, journalists and international buyers can easily reach anywhere between 200,000 and 500,000 euros, including travel, accommodation and event costs.

Finally, communication and marketing play a central role. Promoting a fashion show requires large-scale advertising campaigns, strong press relations and impactful social media actions, all of which are essential to maximise the event’s reach and strengthen the brand image. For a luxury house, a communication campaign can cost between 100,000 and one million euros, depending on the scale of the activations and the desired visibility.

The economic interests

What are the economic benefits? According to estimates by the IFM (Institut français de la mode, ed.), the six weeks of Paris Fashion Week generate a turnover of 10 billion euros. The huge investments in Fashion Weeks are motivated by various factors, such as visibility and brand awareness. A fashion show is an opportunity for a brand to gain recognition among the general public and to confirm its positioning. For example, the Louis Vuitton fashion show on the Pont-Neuf generated more than two billion media impressions last year.

Strengthening brand image also plays a role, as fashion shows allow brands to tell a story and create an unforgettable experience for their audience. This helps to strengthen their brand image and customer loyalty. And of course, there is the hope of an increase in sales. Although the direct impact of fashion shows on sales is difficult to measure, the collections shown during Fashion Weeks are said to represent between 30 and 50 percent of brands’ annual sales, according to industry studies.

However, traditional fashion shows, no matter how spectacular, are no longer the only means of communication. Digital presentations, showrooms and immersive experiences offer new perspectives that are both more sustainable and more personal. At the same time, the adoption of circular economy practices such as upcycling and waste reduction has become necessary. The brands that manage to adapt to these new paradigms and use social media to connect with their customers will define the future of fashion.

This article originally appeared on FashionUnited.FR. Translation via AI and edit by Rachel Douglass.