Risk and benefits brought by formal sustainability programs on fashion enterprises under market disruption
Journal
Resources, Conservation and Recycling
Journal Volume
104
Pages
348-353
Date Issued
2015
Author(s)
Abstract
The recent global 2008 financial crisis created a big market disruption to the fashion industry. Since then, it has seriously hurt the performance of many companies in the fashion industry. It is known that implementation of formal sustainability programs of most fashion companies relate a lot to their resource management as well as supply chain structure. A natural question on "how the formal sustainability program affects the fashion enterprises under the market disruption" hence arises. To answer this question, we collect publicly available real data of 45 listed fashion enterprises and conduct an empirical statistical study. To be specific, we compare the business performances of the fashion groups with and without formal sustainability programs before and after the market disruption. We find some statistically significant results which reveal that fashion enterprises which have not established formal sustainability programs perform relatively well under the market disruption. After that, we drill deeper and show that the "fashionable" fashion groups (SFFGs) which have developed sustainability programs suffer a drop in ROE and there is no enhancement in any other dimensions. For the "basic" fashion groups (SBFGs), their sales drop after market disruption but actually they can reduce cost and maintain profitability. We further discuss our findings and generate important managerial insights. ?2014 Elsevier B.V. All rights reserved.
Subjects
Business performance; Fashion enterprises; Market disruption; Risk; Sustainability programs
SDGs
Other Subjects
Drops; Financial markets; Risks; Supply chains; Sustainable development; Business performance; Fashion companies; Fashion industry; Financial crisis; Resource management; Statistical study; Supply chain structures; Sustainability project; Commerce; financial crisis; industrial performance; market conditions; performance assessment; profitability; secondary sector industry; sustainability; Article; commercial phenomena; controlled study; cost control; fashion industry; industry; market disruption; profit; resource management; risk benefit analysis; sustainability program
Publisher
Elsevier
Type
journal article