fashion allows people to optimize their appearance so as to get more positive attention from others. Or, put more crudely, it helps people look good so they can get laid.
Not sure that it's net positive for society as a whole, but individual humans certainly benefit from the fashion industry. Ask anyone who has ever received a compliment on their outfit.
This is true for rich people as well as not so rich people - having spent some time working as a salesman at H&M, I can tell you that lower income members of society (like, for example, H&M employees making minimum wage) are very happy to spend a fair percentage of their income on clothing.
It is a powerful medium of self-expression and social identity yes, deeply rooted in human history where costumes and attire have always signified cultural, social, and economic status.
Drawing from tribal psychology, it fulfills an innate human desire for belonging and individuality, enabling people to communicate their affiliation, status, and personal values through their choice of clothing.
It has always been and will always be part of humanity, even if its industrialization in Capitalistic societies like ours have hidden this fact.
OP's POV is just a bit narrow, that's all.
You're talking about an industry that generates approximately $1.5 trillion globally, employing more than 60 million people globally, from multi-disciplinary skills in fashion design, illustration, web development, e-commerce, AI, digital marketing.