Fashion designer brands anticipating and creating new trends. Clothing is the core business and one of the most important source of the revenue. In this business model, the role of the designer is key for assuring to the brand a consistent positioning in the market place.
- creates new collections
- is the final decision maker for every single aspect of the brand
Fashion Designer brands started in the Ready-to-wear and now cover different segments from Upper Bridge to Haute Couture conveying always the idea of seasonality.
Fashion houses started with small maisons where the designer had the creative role and there was a strong use of licensing for manufacturing and distribution. With the development of the business they decided to take direct controls of their clothing lines.
Licensing has a strong use in eyewear, fragrances, watches… where different levels of expertise are needed.
Fashion designer brands include usually:
- Ready-to-wear line, highest in term of price positioning and seasonal creativity
- Diffusion line, second line, more affordable and more casual
- sometimes designer also include haute couture lines for maintaining level of exclusivity and making designers vision as a strong signature of a brand (Giorgio Armani, Versace)
Lets talk about differences of RTW and Haute couture:
Ready-to-wear or prêt-à-porter , often abbreviated RTW is the term for factory-made clothing, sold in finished condition, in standartized sizes, as distinct from made-to-measure or bespoke clothing tailored to a particular person’s frame. In the fashion industry, designers produce ready-to-wear clothing, intended to be worn without significant alteration because clothing made to standard sizes fits most people. They use standard patterns, factory equipment, and faster construction techniques to keep costs low, compared to a custom-sewn version of the same item. Some fashion houses and fashion designers produce mass-produced and industrially manufactured ready-to-wear lines but others offer garments that are not unique but are produced in limited numbers.
Haute couture (French word for “high sewing” or “high dressmaking” or “high fashion”) is the creation of exclusive custom-fitted clothing. Haute couture is high end fashion that is constructed by hand from start to finish, made from high quality, expensive, often unusual fabric and sewn with extreme attention to detail and finished by the most experienced and capable sewers, often using time-consuming, hand-executed techniques. Couture translates literally from French as “dressmaking” but may also refer to fashion, sewing, or needlework and is also used as a common abbreviation of haute couture and refers to the same thing in spirit. Haute translates literally to “high”. A haute couture garment is often made for a client, tailored specifically for the wearer’s measurements and body stance. Considering the amount of time, money, and skill allotted to each completed piece, haute couture garments are also described as having no price tag: budget is not relevant.
Repositioning Strategy of Second Lines
In the past second line were successful and the major source of revenues. But with the increasing competition of fast fashion retailers something changed and designers brands understood that to be competitive they need to focus. As a consequence in the last years some of the designer brands decided for one of the two choices:
- Shut down the second line despite the big success
- Transform the second line in a RTW brand with a strong and autonomous personality as the master brand.
D&G, Miu Miu ad to shut down their second lines and reposition them to major-strong identity of their brands.
Lets review the aspects of Diffusion lines and importance of it for a brand.
A diffusion line (also known as a bridge line) is a secondary line of merchandise created by a high-end fashion house or fashion designer that retails at lower prices. These ranges are separate from a fashion house’s “signature line”, or principal artistic line, that typically retail at much higher prices. Diffusion products may be on sale alongside designers’ signature line but they can also be made available at concession outlets and certain chain stores. The use of a diffusion line is a part of the strategy of Massification (definition of it see ↓) where luxury brands attempt to reach a broader market in order to increase revenue and brand recognition.
Massification is a strategy that some luxury companies use in order to attain growth in the sales of product. Some luxury brands have taken and used the concept of massification to allow their brands to grow to accommodate a broader market. As a method of implementing massification, companies have created diffusion lines. Diffusion lines are an offshoot of a company or a designers original line that is less expensive in order to reach a broader market and gain a wider consumer base. Another strategy used in massification is brand extensions, which is when an already established company releases a new product under their name.
Purposes of Diffusion lines:
- to increase sales volumes, when products become affordable to a wider audience at the lower price point
- to leverage the desirability of their premium ranges to create situation when product influences the observer’s feelings and thoughts
- to offset the effect of chain stores copying their products and undercutting the designer’s prices
Examples of Diffusion lines:
- Emporio Armani for Armani
- 10 Crosby for Derek Lam
- Cheap & Chic for Moschino
- Karl for Karl Lagefeld
- See for Chloe
- Versus for Versace
- Victoria for Victoria Beckham
- T for Alexander Wang
- DKNY for Donna Karan
- Notte for Marchesa
Diffusion lines have four stages of market development:
- Wholesale channels to department stores
- The creation of ready-to-wear flagships
- Large diffusion flagships
- The opening of stores in provincial cities
Diffusion line development, stages 3 and 4, are often franchised to third parties with the designer having control over the product and its brand image. Between 20–30 per cent of gross margin is spent on advertising support to create global campaigns to enhance brand image in foreign markets.
Consumers also have another option to shop fashion products due to fast growing tendency of designer collaborations with mass retailers, like:
- capsule collection Karl Lagerfeld for H&M
- Giambattista Valli for Macys
Here you meet bigger volumes of production, more affordable prices and very fast production cycle. Thats why it becomes incredibly difficult to sustain and balance diffusion lines away from confusing customers and driving up costs. Company’s have to deal with the tension between the desire to be exclusive and the desire to produce product line extensions and widespread distribution which could lead to the dilution the brand’s value.