Has the post-fast fashion era already begun? Five models reinventing profitability in textiles

The wave of insolvencies sweeping through French textile retail marks the end of an economic model based primarily on volume. This is characterised by mass store closures, with nearly 3,000 mid-market shops shutting in five years, and a cumulative increase in raw material costs estimated at over 70 percent. The model also relied on customer activation through a high level of sales, which have constantly increased in recent years, and a large physical footprint. This approach has led to overstock, which continues to weigh on the sector's profitability.

This crisis is not a dead end. It is acting as a catalyst. Behind the collapse of the fast fashion paradigm, new value-creation models are emerging. These are more capital-efficient, more precise in their offerings, and better aligned with contemporary consumer habits. This is the diagnosis from Eight Advisory, which identifies five growth levers capable of simultaneously restoring financial profitability and brand desirability.

To decipher the implications, Luc de Saint Sauveur, partner, and Élise Rohart, director in the Strategy team, provide an uncompromising strategic and operational analysis. They outline successful pathways forward for a sector at a crossroads.

Overstock: structural pathology of the fast fashion model

While public debate focuses on inflation or the erosion of purchasing power, the weakening of the fast fashion model stems from another source: a key operational indicator, stock.

“What we are seeing very clearly is that overstock has become the chronic disease of retail and fast fashion,” explains Luc de Saint Sauveur, a business turnaround specialist. “It triggers a vicious cycle that degrades the entire value chain.”

This cycle is well known: producing too much, too soon, leads to a structural dependence on promotions. Sales become a “drug”—necessary to clear volumes but destructive to margins and reference prices. Brands even find themselves “clearing too much” and, ultimately, harming their desirability.

The challenge, however, is not to abandon accessible fashion. “A value strategy is not incompatible with newness,” insists de Saint Sauveur. “You can offer rapid renewal without falling into overstock.” Players like Zara have shown that a very short time-to-market, combined with strict discipline on volumes, allows for a balance of speed and control.

Contrary to popular belief, the sector's crisis is not primarily a cash flow crisis. “For many established brands, it is not initially a problem of cash flow management. What becomes lethal is missing one season, then two. The recovered stock is tied-up cash, and sooner or later, that takes its toll. Added to this are new, more agile competitors who are redefining the rules of the game. They are catching legacy brick and mortar players off guard in their daily sales.”

Five levers to restore margin: return of vertical integration

The restructuring of the sector requires more integrated models. These models must be capable of simultaneously managing rapid assortment renewal, controlled gross margins, operational risk, and customer relations.

1. DNVB: reconquest of gross margin

Digital Native Vertical Brands (DNVB) report gross margins that can reach 70 percent, or even higher. This performance is based on a dual approach: disintermediation, as wholesale traditionally captures 30 to 50 percent of the final price, and the adoption of direct-to-consumer models, of which pre-ordering is the most advanced form.

Admittedly, these brands internalise significant costs. Customer acquisition and logistics represent 15 to 25 percent of turnover. However, the margin recovered through disintermediation largely offsets these expenses. Conversely, legacy players remain penalised by “a legacy of IT systems, real estate, and a certain organisational inertia.”

2. Time-to-market: key lever for legacy players

For the traditional mass-market, the transformation is not about a radical break but a gradual adjustment. “The absolute priority is time-to-market,” states de Saint Sauveur decisively. “The time between product design and its arrival in-store must be reduced.”

This agility helps to limit exposure to seasonality risk, quickly adjust volumes, and reallocate capital to high-performing products.

3. Drop model and co-creation: recreating desirability

While operational discipline protects margins, growth is driven by desirability. The drop model and community co-creation meet this demand.

“Today’s consumers expect a narrative, an event, an experience,” observes Élise Rohart. “They want to feel unique, to access something limited and ephemeral.”

Co-creation goes beyond marketing engagement. It integrates the customer into the design processes and even into the launch of collections. Brands are thus moving closer to a logic of lifestyle co-construction, reducing commercial uncertainty while strengthening loyalty.

4. Physical network: from a liability to an asset

For legacy brands, the store portfolio is not doomed; it must be repurposed. The point-of-sale becomes a marketing investment and an omnichannel hub, rather than a simple profit centre.

The first decision is often painful: close more stores, but do it better. “Closing also means creating the opportunity to open in the right place,” recalls de Saint Sauveur. This involves smaller spaces, more visible locations, and an economic model aligned with actual footfall.

In this logic, the store acts as a media channel. Pop-up stores, which are temporary but offer high visibility, illustrate this shift. “They generate a lot of traffic, a lot of buzz, and enhance the experiential dimension,” notes Rohart. The key challenge remains investing in a seamless customer journey, with no disconnect between the website, app, and store.

5. Can pre-ordering be industrialised?

Pre-ordering acts as a direct lever on net profitability. It eliminates the risk of unsold stock and mechanically reduces the need for markdowns. It also optimises logistics. “On pre-order models, we have observed return rates halved, reaching as low as 8 percent compared to a market standard for brick and mortar players, which can be as high as 30 percent for online sales,” highlights Rohart.

An essential question for the future of the sector remains, linked to the ability to scale up this new paradigm: can pre-ordering, which is effective on limited volumes, be extended to the mass-market?

For de Saint Sauveur, the potential is real: “On essential products, quality recurring basics, very significant volumes can be achieved.” In a context of constrained purchasing power, an industrialised pre-order model could even compete with some second-hand fashion platforms. “In the long run, it could become a credible alternative to Vinted.”

End of a model, not of accessible fashion

The current crisis is not one of affordable fashion, but of an economic model built on the illusion of infinite volume. Overstock, margin dilution, and the commoditisation of the offering have revealed its limits.

Tomorrow's winners will be neither the fastest nor the cheapest. They will be those who can orchestrate scarcity and exclusivity, meticulously manage their flows, and transform digital and community into value-creation levers. In this post-fast fashion era, profitability is no longer dictated by the size of volumes, but by strategic precision.

This article was translated to English using an AI tool.

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