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Direct fashion companies going straight for the brand jugular

August 8, 2012

Bloomberg has a good story about the rise of a new class of fashion company that’s offering consumers high quality products at a fraction of the cost of their designer equivalents.

It’s a model that takes advantage of the power of technological globalization to connect directly to consumers, fabric makers and manufacturers.

This “know how” which used to be the exclusive domain of experienced practioners with years in the business, is now available to all comers, add onto this the advantages of lower marketing/acquisition costs and marginal overhead and you can easily see the competitive threat the new players pose.

The companies mentioned in the piece are; J.Hilburn, American Giant and Bonobos

The Bloomberg article explains:

“A men’s dress shirt costs J. Hilburn about $35 for fabric and another $22 for manufacturing. That $57 shirt sells for around $125 — about $200 less than a shirt by Ermenegildo Zegna Group sourced from the same Italian mill”

Obviously, being able to create a very similar product to the designer version is a real test of the brand strength of that designer. As mentioned above, the new players have clear cost advantages, but have very little in the way of brand equity, so the decision is with the consumer- “Do they feel the designer brand offers significant advantages over the non-designer version?”

These new brands are succeeding with men because they find shopping a chore and there are plenty of them who aren’t brand obsessive and are seeking quality without the high price.

Fashion brands obviously have options and these could include shaking up to their own cost structures, but they also need to take a look at their brand communication and relationship efforts to see if they are really connecting and if their retailer partners are supporting their efforts.

 

 

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americangiant
bonobos
brands
costcutting
direct
disintermediation
jhilburn
luxurybrands
mensfashion