Greater Manchester's fast fashion industry was rocked this week after the fall from grace of a brand that had once been hailed as one of its rising stars.
Salford-based In The Style, which was once celebrated in a BBC fly-on-the-wall documentary, was valued at £105m when it became a public company two years ago. It was founded in 2013 by entrepreneur Adam Frisby, and its success made him a millionaire.
But this week the business announced it had agreed to sell itself to a private equity firm for just £1.2m in order to avoid administration.
In The Style's fall is the latest in a string of collapses among fast fashion brands in Greater Manchester over the last year.
Missguided, itself a subject of a popular Netflix documentary in 2020, was founded in Prestwich in 2008 by Nitin Passin, who drove a £300,000 pink Lamborghini Aventador as the company boomed. But, last summer the company collapsed into administration before being rescued by Mike Ashley's retail empire. It later emerged that the brand had owed over £80m to creditors before its collapse.
Frasers Group swooped in again in August last year when it bought I Saw It First for just £1 after the fast fashion brand racked up debts of £13m. The Strangeways company was founded in 2017 by Jalal Kamani, the brother of Boohoo co-founder Mahmud Kamani. At its peak, I Saw It First attracted an army of customers as Love Island's official sponsor.
And, just last month, the wholesale arm of fashion brand Lavish Alice was put into administration as the company, which was founded by Manchester's Lee Bloor and Matthew Newton when they were just 22, restructured to go online only.
Even a giant such as Boohoo has has its own set of troubles recently. In January, the brand revealed a huge drop in its sales as extended delivery times and the cost of living crisis continued to bite.
So where does the latest fall from grace leave the fast fashion industry in Greater Manchester and as a whole? In the wake of In The Style's collapse, BusinessLive spoke to experts at the University of Salford Business School and Alliance Manchester Business School to find out what the challenges are facing the fast fashion industry and what brands need to do in order to survive.
According to Dr Gordon Fletcher, school lead for research at the University of Salford Business School, the "increasingly challenging environment" for Manchester's clothing companies comes from a mix of factors.
He said that while some are a result of external factors, like the pressures of inflation, there are also "fundamental issues that lie at the core" of the fast fashion business model that "do not always align" with its target consumers.
Dr Fletcher argues that "shifting generational preferences that are increasingly influenced by social media play a significant role in fashion choice", with young people more concerned about shopping sustainably.
"As Gen Zs start to grow out of the target 18-24 age for fast fashion, this brings challenges," he said. "Although definitions of individual generations are arbitrary, there is always a resistance from those who are newly economically active to not repeat the apparent 'mistakes' of their most immediate predecessors. 'Generation Alpha' (born from 2010 into a fully digital world) has different tastes."
"Fashion has a sustainability issue. It is no secret and increasingly it is this awareness that is the primary influence in purchasing decisions," he added. "Last month, the University of Newcastle was criticised by its own students for permitting Shein to have a stand at a new year's freshers fair.
"With students - who largely fall into this prime consumer demographic - raising concerns, there is clearly going to be an impact on the bottom line of many fast fashion companies.
"Part of the sustainability issue for fast fashion is its use of low wages, cheap and environmentally dangerous materials - in contrast, for example, to wool. But, with the cost of living crisis all purchases are being given a second thought. Successful fast fashion relies heavily on impulsive purchases. Any second thoughts may push the consumer to different options.
"And there are options, including recycled, retro or vintage clothing that has been brought back to use from earlier generations fashion 'mistakes'. In the same way, one-off purchases for significant life events might be reconsidered and a rented outfit might be used instead.
"And, even within the fast fashion world, there is a hierarchy of brands. Some sit at the top of this tree with higher quality items intended for more selective sales."
Another challenge highlighted by Dr Fletcher is that of intellectual property - because once an item is 'seen' it can be copied by others and usually for less.
"Other brands rely on lower prices and larger volumes of sales to appeal to those with less consumer power. Because of this, fashion also has an intellectual property problem", he said.
"The materials in copies are generally more environmentally harmful and the item may only be worn a few times (even once) before it becomes damaged. Copied fashion harms the brands at the top of the hierarchy and is less appealing for those consumers concerned about the environment."
Concluding, Dr Fletcher said: "Fashion traditionally operates on tight margins. Current business models do not necessarily let existing companies in the supply chain to shift to more sustainable materials, offer living wages or pursue intellectual property infringements. With inevitably tight margins, a series of multiple negative shifts in the equilibrium can have disastrous consequences.
"Considered in isolation, most business models could respond to any of these five challenges. While some are more difficult to overcome than others, there is sufficient evidence from other sectors to suggest that they can be addressed. But in combination, this week's sale for £1.2m of In The Style in order to avoid administration could be seen as generous."
Also sharing their thoughts with BusinessLive, Dr Heiner Evanschitzky, professor of marketing at Alliance Manchester Business School, said hype from investors when new players entered the online fashion market during the pandemic has led to inflated valuations.
He adds that consumer demand "began to dampen a year or so ago" in response to high inflation and the cost-of-living crisis, which signalled the end of almost two years of rapid growth for fashion ecommerce.
Dr Evanschitzky argues that has led to an "almost inevitable consolidation" of the industry.
He added: "Too many brands had flooded the market to be competitive in the long run. We’re now seeing more established outlets, such as Boohoo, gain momentum as they realise economies of scale – whereas smaller retailers continue to be hindered by the size of their operations.
"Frasers Group understands the importance of boosting their online presence; snapping-up online fashion brands makes economic sense for a multi-brand group that can improve efficiency and thereby make these brands profitable.
"For the region, it is important to ensure that strong online fashion retailers remain headquartered here. One risk is the potential for investors to load brands with debt and sell them on, or worse, if they fall into administration, so it’s vital the industry collectively nurtures their growth.
"Ultimately, brands that inspire customers and have a unique value proposition will most likely survive the test of time."