The big business of fashion

[Ramius]

I have always been interested in the behind the scenes aspect of business. Â I remember when Advertising Age did a fascinating two-page spread showing how all these media companies are interconnected with one another. Â Anyway...the Washington Post recently did an article about Bernard Arnault who is the chief shareholder at LVMH. Â The WP says that Arnault's holdings in the fashion biz are, "so vast that he holds much of the future of fashion in his hands." http://www.washingtonpost.com/wp-dyn...2002Apr26.html On a related topic, also checkout the article below about Donna Karan International, which LVMH owns btw. http://www.magiconline.com/MAGIConli..._FWD_Donna.htm

 

[LA Guy]

Yes the business of fashion is sometimes even more interesting than the end product you shell out your hard-earned money to put on your back. Apart from the huge number of brands under the LVMH aegis (check out the LVMHY stocks), many of the major brands are controlled by the Pinault-Printemps-Redoute conglomerate through its backing of the Gucci group (Gucci, YSL, etc...). While some labels are "family" owned, including Prada (which also controls Helmut Lang and Jil Sander) and Armani (stilled 100% controlled by its namesake), many other so-called luxury labels are divisions of larger company - John Varvatos, for example, is backed by Nautica Enterprises, as is Earl Jean. Compounding the fun, different manufacturing companies hold licenses for the production of various lines. For example, IT produces the diffusion lines D&G, Gianfranco Ferre Jeans, and VJC, as well as exte, which is its housebrand; while GFT produces clothing for companies ranging from Calvin Klein collection to Joseph Abboud.

Let's face it: when we buy a Prada shirt or Gucci shoes, a great deal of our money is going to buying perceived exclusivity. No matter how well made it is, or how high the import tariffs, much of the high price is for the express purpose of making the commodity inaccessible, and thus, desirable. I guess that just because I know doesn't make me less a sucker.

BTW, for all the "conservative" types, who might take this as proof that traditional clothiers are better than designers, Gieves and Hawkes, arguably the most venerable Savile Row house there is, was just bought out by one of these so called designers, who intend to use the access the resources of the house for other lines and also to reposition the venerable Gieves and Hawkes mainline. It seems that no-one is immune.

 

[Ramius]

LA Guy,

How much do you think these conglomerates affects a designer's creativity?  The Donna Karan article clearly shows that LVMH indeed puts pressure on its labels to "produce".  FHM Collections has interview with D&G in which Stefano Gabbana address the "big conglomerate" issue.  I respect those two guys for not (yet at least) caving in, or selling out.  In terms of the manufacturing end of the business, I really don't see a big deal if company X produces the line for multiple labels.  You practically see this in almost any sector of manufacturing.