- 03 Ιουν 2017, 13:02
#402926
For luxury brands, selling clothes is basically a marketing expense
But it’s an open secret in fashion that the big luxury houses are no longer truly in the clothes business.
Their moneymakers these days are fragrances, handbags, shoes, and accessories. Indeed, new research suggests, for the Pradas and Louis Vuittons of the world, too much dependence on clothes can actually be a liability.
In the modern luxury market, the report by Exane BNP Paribas and the fashion consultancy VR Fashion Luxury Expertise says, clothing may be a “brand-defining core category”—but it is “hardly profitable.” This category, known as ready-to-wear (RTW), refers to the clothes you buy off the rack at stores and online, and the report’s authors note that most brands lose money on it.
“We consider high exposure to RTW as a structural weakness,” the report states, noting that clothing doesn’t have the same “recognition factor” as accessories, such as the new “it” bag or shoe of the moment. Insofar as customers are buying these brands as a way to communicate status, clothes are simply less effective—which also makes their high prices hard for consumers to justify.
For the brands themselves, producing clothes is costly, as is staging runway shows. Meanwhile, it’s getting harder to convince consumers to pay full price, and displaying a collection properly in a physical store requires a lot of space, at a time when brick-and-mortar retail is in flux. As a result, sales of clothes are low and operating margins vanishingly thin.
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