Investment in the Fashion Industry Essay Example | Topics and Well Written Essays - 3500 words

Investment in the Fashion Industry - Essay Example The paper "Investment in the Fashion Industry" explores the fashion and investment in this industry. The opportunities are great although level of competition is tough. The area of Southampton has population of less than 2millions, but the potential buyers are more than 80percent of the population. The female population of the area is 52percent, whereas the teenagers comprise of more than 34percent of the entire population, and population of kids below 10yrs consists of 28percent. Significant percentage of the population can be regarded as the potential buyer within this region of Southampton. The fashion industry of Southampton has potential based upon financial standing of its population. More than 70percent of the population are working class, whereas 20percent of the population is involved in business related activities, however the remaining population is retired class and their earning is based upon pensions and public funds. The per capita income of this region is relatively b etter than other parts of United Kingdom, and the local population is attuned to contemporary customs and fashion. The region is therefore considered to be ideal for the investment in fashion industry, however risk does prevail. The risks associated with the investment are mainly related with the ongoing economic recession, the purchasing power of the local population has reduced, and people are reluctant to invest towards non-returnable and non-profitable items. The negative aspect of this investment is the profession itself., the fashion is considered to be commodity which can be sold but never re-sold. The fashion is consumer product, it is not business or commercial commodity which has re-sale in the market, the customer can never expect to make profit by investing in fashion consumables. The ongoing economic turmoil has therefore cautioned the public about their spending and savings. The unemployment in United Kingdom is expected to reach record high level, and it will take yea rs to create more earning opportunities for the public because the government savings and profit returns are restricted (Harald, 2000). PEST Analysis on Industry Political Analysis 1. The deregulation in the European market launched by the European Union created hindrances for the fashion industry. The industry has been accused of excessive profit margins, and labour law violations. 2. The stand of European Union has caused implication for the fashion industry within United Kingdom; the fashion industry therefore found it difficult to continue with the implementation of high tax cuts. 3. The restrictions imposed by the European Union offered opportunities to the remaining companies of the fashion industry, therefore the market shares of the rival fashion units increased significantly. Economic Analysis: 1. Fashion industry worldwide in general has played a central role in stirring the growth of the world economy. 2. In the current scenario the major concern for the industry comes from the rising tax cuts and ongoing economic turmoil. 3. In the midst of such economic crisis, the imposition from the European Union has reduced the profit making figures for the fashion units. 4. The financial penalties have halted the commercial activities of the company; unfortunately the company seldom enjoy enough revenue which can be utilized for such purpose. 5. The banking and financial institutes shall be referred for financial borrowing, and the credit facility shall be thoroughly evaluated with special emphasis upon the interest rate. 6. It is important for the company to evaluate the purchasing power of the customers inside Southampton. The economic power of the