The fashion industry has shown increasing interest in applying artificial intelligence (AI), yet there is a significant gap in exploring the potential of emerging diffusion-modeling-based AI image-generation systems for fashion design and commerce. Therefore, this study aims to assess the effectiveness of Midjourney, one such AI system, in both fashion design and related commerce applications. We employed the action research approach with the Functional, Expressive, and Aesthetic (FEA) Consumer Needs Model as the theoretical framework. Our research comprised three stages: refining an initial idea into well-defined textual design concepts, facilitating concept development, and validating the preceding observations and reflections by creating a new line of hemp-based products that were evaluated by targeted consumers through an online survey. Findings reveal that this AI tool can assist fashion designers in creating both visually expressive attire and ready-to-wear products, meeting defined design criteria and consumer needs. Midjourney shows promise in streamlining the fashion design process by enhancing ideation and optimizing design details. Potential e-commercial applications of such AI systems were proposed, benefiting physical and digital fashion businesses. It is noted that, to date, the major limitations of using Midjourney encompass its restriction to only facilitating early fashion design stages and necessitating substantial involvement from designers.