mona lisa style

A Random Essay on the History of the Fashion Industry

At age 12, I was an impressionable adolescent.  Unlike other girls my age, my puritanical mother never taught me how to put on makeup, create stylish outfits, or do my hair.  So naturally, I turned to television and Seventeen magazine to learn why boys didn’t like me, how to wear eyeliner, and how to make my boobs grow bigger.  I soon graduated to Vogue, where the possibilities of big city life to a small town girl like me were endless and glamorous.  But I knew that would never be my life.  I didn’t have the looks, the money, the name, the education, or the personality to live a life like they did in the magazines.  Everyone in Vogue was light years above me. (Don’t worry - I no longer believe this since I am not 12 years old anymore, and have some semblance of self esteem.) They had names like Diane von Furstenburg the third and came from (or married into) royalty.  They vacationed every other week in hoity toity destinations where only the rich go.   They didn’t have to work.  They went to school at exclusive boarding schools before attending college at an ivy.  It was all so cool to me.  I wanted to be those people.  I dreamed of interning at a fashion magazine in New York City so that I could be around the clothes and the people.  It didn’t matter they verbally abused or degraded me as a human being.  It was all worth it in my mind.  No guts, no glory right?  (Ok, that didn’t really happen.  Just in here for dramatic effect.)

Then, things started to happen.  First there was that whole internet thing and people started to buy things online.  In 2000, netaporter.com started selling designer clothing online.  Outrage!  Then, the birth of fast fashion.  H&M opened it’s first store in the United States.  Designer-esque clothes at mass market prices? Fast fashion retailers are able to design, produce, and ship goods in two weeks, door to door.  It takes the rest of the industry 4-6 months.  More outrage!  Everyone started knocking everyone else off.  And there was nothing anyone could do about it since US law doesn’t allow you to protect intellectual property on apparel.  In the mid 2000’s, luxury brand names were branching out into new markets.  They went global.  Then they started making $300 sunglasses, shoes, scarves, jewelry.  Now, anyone who had a couple hundred bucks could own Chanel, Gucci, Prada, Louis Vuitton.  I don’t deny it, I was one of those people who rocked the labels even though I was working at my parents’ Chinese take-out joint for minimum wage.

Then another thing started happening.  Rich and/or famous people were no longer dressing head-to-toe in one designer.  They were now mixing designers, and even mixing price points. Oh my lord! In my mind, Sharon Stone started this phenomenon when she wore a white men’s button down shirt from the Gap with her couture skirt to the 70th Oscars.  Then boutiques such as Scoop NYC, Big Drop NYC, and Intermix popped up and merchandised their clothes no longer by brand but by outfits whereas in department stores, clothes were always merchandised by brand.

Every brand started making all this stuff, and people were eating it all up.  Americans loved it… until they didn’t.  The supply was too much for the demand, and things wouldn’t sell at full price.  Savvy consumers figured out the department store markdown dates (8-10 weeks after delivery) and waited for items to go on sale until buying.  Begin markdown frenzy.  A few years later (2005 ish), after the brand names had saturated those markets, high-end designers who had exclusive distribution deals with retailers such as Bergdorf Goodman, Neiman Marcus, and Saks Fifth Avenue started manufacturing diffusion lines and partnering with mass market retailers such as Target, Kohl’s, and Macy’s.  They went from the priciest retailers to the most affordable retailers.  Where were they planning on going next?

Fast forward to the economic collapse of 2008.  All of a sudden, fashion isn’t so exclusive anymore.  Fashionable clothing (ahem, designer knockoffs) are now available for less than $100 at your friendly neighborhood fast-fashion retailer.  Where it was once impossible for normal non-industry and non-connected people who weren’t interning at a fashion PR firm to attend fashion shows at the tents, American Express started selling tickets to the oh so exclusive Mercedes Benz Fashion Week.

When -30% became the new flat in late 2008/2009 and one of the industry’s largest factors, CIT, nearly went bankrupt, something had to be done.  So all the big names in the fashion industry meet up to talk about (where’s the representation from the rest of the industry?) how they can fix this mess.  They basically agree that markdowns are not good for anyone in the industry (except the consumers).  They acknowledge that something must be done about the knocking off.  And then they come up with Fashion’s Night Out. Anna Wintour makes an appearance at Macy’s in Queens.  Retailers and designers band together and agree not to entice shoppers to participate by offering discounts.  Fashion’s Night Out gets a lot of publicity but doesn’t exactly catapult people back into spending money.

And that, brings us to today.

Reinvention

They say startups die due to lack of cash.  I think established companies die mostly because of lack of reinvention.  Established companies often rest on their laurels and don’t listen to the younger people with fresh perspectives coming into the company.  Upper management often feels that the college grads have no insight and can’t possibly have anything good to say because they haven’t earned their stripes yet.  These kids are straight out of college.  What could they possibly know about business?  Management has been in the business for 30 years doing the same exact thing, so clearly they know what they are doing, right?  To be honest though, in my experience, it is not usually the CEO and Presidents that have this problem.  It’s usually people at the VP level and below, or people who have held the same position for 10+ years.  They feel that they have something to prove.  I think you need a mixture of experienced and new people to make good products/services and run a successful company but i’ll go into that in another post.

Let’s take a closer look at a few cases:

1.  Coach, est. 1941 - I’ll talk about their reinvention because I watched them evolve for about 5 years during my formative youth.  My parents have a store in the town mall, and being forced to close the shop everynight in high school, I would pass by the Coach store.  Coach is 68 years old now and they’re still doing very well because they’ve done an absolutely brilliant job rebranding and targeting a new market.  At the beginning of my high school years, Coach was known as the leather handbag company for older women.  It sat with Dooney & Burke and came in classic leather colors of black, dark brown, brown, and tan.  My middle aged mom would shop there (although she was too cheap to ever pay retail for anything).  Towards the end of high school, I started noticing standalone retail Coach stores and color in the windows.  I haven’t seen the correlating numbers related to the revamped marketing and branding efforts but in today’s WWD, Coach ranked #1 in the list of most competitive retailers.  Coach put out more offerings, at lower price points and playful colors to target a younger market but still have their classic pieces for their longtime customers.  Why did they do it?  Maybe they realized that their customer was aging with them, and senior citizens don’t really shop for themselves anymore.  Or maybe sales sucked.  Probably both. People, things, and times were changing and Coach had to move with the wave or get left behind.

2. Liz Claiborne, est. 1976 - Here’s another “mom brand” that I’ve followed closely throughout my upbringing.  My mom exclusively shopped Liz Claiborne at Macy’s and would stalk items on her daily trips to the mall until they hit the 70% off rack.  She’d even buy things 2-3 sizes too big because she was so frugal.  Anyway, Liz Claiborne has been known as one of the mom brands for most of its 33 years. With the contemporary market rising and squeezing the bridge world, Liz Claiborne made smart strategic acquisitions of contemporary brands Juicy Couture, Kate Spade, and Lucky Brand Jeans in 2007.  They decided to hedge their bets and have a few brands in bridge, better, and now contemporary.  In early 2008, they announced Isaac Mizrahi as the new designer.  He’s there to refreshen the whole drab suits moms wear to work line.  I think it worked.  The new line is fresh, young, vibrant.  Their floor in 34th street looks bright, clean, new.  The brightness of it all really makes the Jones New York section look dark, dingy, and old.  It’s still too early to tell whether these investments will pay out, but I definitely think they made the right moves.  In my opinion, Liz Claiborne listened to the market and reacted but only time will tell..

3. Jones Apparel Group, est. 1975- owns Nine West, Easy Spirit, Evan Piccone, Jones New York, Anne Klein, Anne Klein New York, Rachel by Rachel Roy.  Jones is a direct competitor of Liz Claiborne and sure enough, was founded around the same time.  Like Liz Claiborne, Jones Apparel Group is known as selling “mom work clothes.”  Jones brands sit on department store floors right next to Liz Claiborne brands. Until about 1-2 years ago, their brand and identity was kind of BLAH to me.  They recently moved a new CEO and President of women’s wholesale into place which seems to have loosened things up a little around there.  The president, Aru Kulkarni comes from Liz Claiborne, so maybe things will get a little younger and a new perspective will pan out.  In 2008, they also brought in head designer Ted Kim (from Michael Kors) to design for their Anne Klein New York bridge division.  The line became much more modern and focused but saw pushback from middle american retailers.  The line is now moving back to it’s roots of middle american mom clothing.  Jones Apparel Group’s brands still resonate largely within the bridge world and older customer but in 2008, they did take a 50% stake in Rachel Roy, a designer label.  In 2009 they launched Rachel by Rachel Roy exclusively in Macy’s stores at pricepoints that sit amongst junior clothing.  They have a strong financial team and a decent balance sheet compared to industry standards but it’s still to be seen who takes the larger market share.  They’ve got several brands that need rejuvenation, and it doesn’t seem that it’s likely to happen the way things are currently going.

So, the moral of the story is: reinvention is hard.  It’s difficult to realize when to hold on to what works and when to try new things.  For me, I personally vow to listen to the new people in the company and ask for their opinions and insight.

Coincindental Competition

I always thought it was little too coincidental for two similar products/services to hit the market at the same time.  What’s the real story here?

Gilt (Nov 2007) vs Hautelook (Nov 2007) vs RueLaLa (Apr 2008)

Big Drop NYC (1990) vs Intermix (1993) vs Scoop (1996)

Vita Coco (May 2004) vs. Zico (2004)

-30% really is the the new flat.

Belk net down 90% LY WWD 5.29.09

JCrew Profits slide 33% WWD 5.29.09

Neiman Marcus Sales fall 23.7% WWD 6.10.09

Inditex (Zara) down 16% WWD 6.10.09

Do Innovation and Entrepreneurship Have to Be Incompatible with Organization Size?

Check out the full HBS Working Knowledge article here.

MBAs vs Entrepreneurs: Who's got the right stuff for tough times?

According to Havard Business Blogger, Bill Taylor “So the next time you read an article about what MBAs are doing, don’t forget to think about what entrepreneurs are doing as well. They’re the ones with the right stuff for tough times.”

Fashion industry finally catching up with technology?

Tech savvy fashion people

For a split second I thought the fashion industry was starting to use modern day technology, but then I read the article and it’s really that CONSUMERS are using the iphone to make apparel purchases.  You just have to wonder why logic doesn’t work here.

FACTS:

A. Consumers are people.
B. Wholesale fashion buyers and designers are consumers.
C. Consumers use up-to-date technology to make purchases.

Therefore, wholesale fashion buyers and designers are people and should use technology to make purchases.  Too bad that’s FALSE.  So much of the wholesale buying process is still very manual with “automated” EDI transmissions that a human has to double check line by line. HA, I laugh. You would think that you can find applications for things that make life easier in multiple aspects of life.

Oh, the irony of it all.  Fashion is supposed to be ahead of the curve.  I guess they are in some ways, but not in terms of technology.  Unless you’re Zara or H&M.