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9 x 12640pphardcoverfull colorInstructor's GuidePower Point978-1-56367-686-4

SEE INSIDE FOR SAMPLE MATERIAL FROM

The Dynamics of Fashion, Third Edition

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the dynamics of fashion

the dynamics of

Fairchild Books, Inc.New York

fashionthird edition

elaine stone, professor emeritafashion institute of technology, new york

Director of Sales and Acquisitions: Dana Meltzer-Berkowitz

Executive Editor: Olga T. Kontzias

Development Editor and Senior Production Editor: Elizabeth Marotta

Associate Art Director and Photo Research: Erin Fitzsimmons

Production Director: Ginger Hillman

Senior Development Editor: Jennifer Crane

Creative Director: Adam B. Bohannon

Copyediting: Progressive Publishing Alternatives

Divine Illustrator: Jenny Green, shu shu design

Production Hazmat Specialist: Anne Sanow

All-Star Squadron: Kevin Brennan, Andrew Fargnoli, Ginger Hillman, Jeff Klingman, Suzie Q., Alexandra Rossomando, and Blake Royer

Cover design and interior design: Adam B. Bohannon

Text layout: Adam B. Bohannon, Erin Fitzsimmons

Cover photos: Stephen Sullivan

Cover model: Deon

Hair & makeup: Timmothy Olan for Vartali Salon, NYC

Styling: Collette LoVullo

Copyright © 2008 Fairchild Books, A Division of Condé Nast Publications.

All rights reserved. No part of this book covered by the copyright hereon may be reproduced or used in any form or by any means—graphic, electronic,

or mechanical, including photocopying, recording, taping, or information storage and retrieval systems—without written permission of the publisher.

Library of Congress Catalog Card Number: 2008924280

ISBN-13: 978-1-56367-686-4

GST R 133004424

Printed in China

TP17

contents

List of Features viExtended Contents viiPreface xv

unit one • the changing world of fashion 21 A Century of Fashion 42 The Nature of Fashion 383 The Environment of Fashion 664 The Movement of Fashion 905 The Business of Fashion 118

unit two • the primary level: the materials of fashion 1406 Textiles: Fibers and Fabrics 1427 Leather and Fur 172

unit three • the secondary level: the producers of apparel 1988 Product Development 2009 Women’s Apparel 230

10 Men’s Apparel 25611 Children’s and Teens’ Apparel 282

unit four • the secondary level: the other producers 30612 Innerwear, Bodywear, and Legwear 30813 Accessories 33414 Cosmetics and Fragrances 36815 Home Fashions 400

unit five • the retail level: the markets for fashion 42816 Global Fashion Markets 43017 Global Sourcing and Merchandising 46018 Fashion Retailing 48219 Policies and Strategies in Fashion Retailing 508

unit six • the auxiliary level: supporting services 53020 Fashion Auxiliary Services 532

My Top 100 Designers 559 Glossary 563 References 575 Credit list 589Index 595

v

fashion focus

Eleanor Lambert: The Lady... 26

“It’s Just the Beginning”: So Says Ralph Lauren 50

Glamorous, Glamorous, Glamorous! Valentino: We Bid You Adieu, But Never Goodbye 72

Little Boy Lost—and Found: Marc Jacobs 98

Young Designers: Go! Go! Go!—But Go Slow! Can You Handle It? 126

Bamboo: The Stuff of Floors, Furniture … and Now Fashion 150

Fur Frenzy: For the Love of Fur 182

Form and Function—Product Lifecycle Management: PLM to the Rescue 212

Birth of a Notion: It’s the Thought that Counts 240

Tom Ford: It’s a Man’s, Man’s,Man’s World—For Now 264

Babes in Denimland: Going Gaga for Denim 294

Its All In the Family—Now: The House of Natori 316

On the Rocks: Chakra Calmed In Color 344

A Game of Musical Celebs: Sing a Song of Scent 374

The Fashion 50: The Most Powerful People in Home Fashions 408

Stella McCartney: A Stella Attraction 444

Counterfeiting: Faking It! Real Moneyfor Fake Goods: 468

JCPenney: Still Raising the Bar 490

Here, There, Everywhere: They are Coming! 516

The Doneger Group: Through the Decades,a Prominent Presence 542

then & now

...and “The List” 27

Paul Poiret, the King of Fashion: Long Live the King 56

Sixty Years of New Looks: Then Dior and Now Galliano 78

Gucci’s Wild Ride:Yesterday, Today, and Tomorrow 104

Partners: Wherever We Go, Whatever We Do,We’re Gonna Go Through It Together 134

Hemp: From High—To Low 156

From Hermès to Eternity: From Harnesses and Saddles to Handbags and Scarfs 190

The WWD 100 List 218

The Celebrity Turned Fashion Designer: Does It Have a Future? 246

Matinee Idols: Before You Lose Your Hair—In Fashion 270

Paper Dolls: Stardolls, Fame, Fashion, Friends 298

Made to Be Seen: The Bra and Panty Set—Bust-See TV 320

Salvatore Ferragamo—A Big Footprint: Walking the Walk 348

Mission Possible: CEW Builds Leaders 382

Home Fashion: Here Come the Brides 414

Giorgio Armani: A Man for All Worlds! 448

Sweatshops: Product Safety, Environmentalism,and Human Rights 476

100 Years of Neiman Marcus: May They Live Happily Ever After—For Another 100 Years 494

Goodbye to the Mall? Hello to the Lifestyle Center? To the Epicenter? Time Will Tell! 520

CFDA: Forty-Five Years ofGlamour and Growth 546

list of features

Preface xv

unit oneThe Changing World of Fashion 2

1 A Century of Fashion 4Social and Cultural Conditions 6Fashion Trends and Developments 7Designers and Other Influences 7prelude to the 20th century 8Social and Cultural Conditions 8Fashion Trends and Developments 8Designers and Other Influences 9the 1900s: the beautiful age 10Social and Cultural Conditions 10Fashion Trends and Developments 10Designers and Other Influences 11the 1910s: new fashions take hold 12Social and Cultural Conditions 12Fashion Trends and Developments 12Designers and Other Influences 12the 1920s: fashion gets modern 14Social and Cultural Conditions 14Fashion Trends and Developments 14Designers and Other Influences 14the 1930s: making do 16Social and Cultural Conditions 16Fashion Trends and Developments 16Designers and Other Influences 16the 1940s: war and duty 18Social and Cultural Conditions 18Fashion Trends and Developments 18Designers and Other Influences 18the 1950s: new prosperity 20Social and Cultural Conditions 20Fashion Trends and Developments 20

Designers and Other Influences 20the 1960s: times are a-changing 22Social and Cultural Conditions 22Fashion Trends and Developments 22Designers and Other Influences 23the 1970s: fashion and the “me” decade 24Social and Cultural Conditions 24Fashion Trends and Developments 24Designers and Other Influences 24the 1980s: pop culture and excess 28Social and Cultural Conditions 28Fashion Trends and Developments 28Designers and Other Influences 29the 1990s: fashion in the information age 30Social and Cultural Conditions 30Fashion Trends and Developments 30Designers and Other Influences 30the 2000s: into the 21st century 32Social and Cultural Conditions 32Fashion Trends and Developments 32Designers and Other Influences 33Summary and Review 34

2 The Nature of Fashion 38The Importance of Fashion 40The Fashion Business 41

Marketing 41Fashion Marketing and Merchandising 41

Misconceptions about Fashion 42The Terminology of Fashion 43

Style 43Fashion 43Design 44Taste 44A Classic 45A Fad 46A Trend 47

vii

extended contents

Components of Fashion 48Silhouette 48Details 48Texture 48Color 49

The Fashion Cycle 51Stages of the Fashion Cycle 52Lengths of Cycles 53Breaks in the Cycle 55Long-Run and Short-Run Fashions 55Consumer Buying and the Fashion Cycle 55

The Intangibles of Fashion 57Group Acceptance 57Change 58A Mirror of the Times 60

Principles of Fashion 61Summary and Review 64

3 The Environment of Fashion 66Market Segmentation 68

Geographics 69Demographics 69Psychographics 69Behavior 70

The Economic Environment 71Consumer Income 73Population 75

The Sociological Environment 76Leisure Time 77Ethnic Influences 80Status of Women 81Social Mobility 84Physical Mobility 85Faster Communications 85War, Disaster, and Crisis 86

The Psychological Environment 87Summary and Review 88

4 The Movement of Fashion 90Factors Influencing Fashion Movement 92

Accelerating Factors 92Retarding Factors 94Recurring Fashions 97

Playing the Apparel Fashion Game 99Pieces of the Game 100Rules of the Game 101

Predicting the Movement of Fashion 101Identifying Trends 102Sources of Data 102Interpreting Influential Factors 102Importance of Timing 105

Theories of Fashion Adoption 105Downward-Flow Theory 106Horizontal-Flow Theory 106Upward-Flow Theory 108

Fashion Leaders 109Innovators and Influentials 109Royalty 110The Rich 110The Famous 111Athletes 113

Fashion Followers 113Reasons for Following Fashion 113

Fashion as an Expression of Individuality 114The Paradox of Conformity and Individuality 115Fashion and Self-Expression 116

Summary and Review 116

5 The Business of Fashion 118Economic Importance of the

Fashion Business 120Scope of the Fashion Business 120

The Primary Level 120The Secondary Level 121The Retail Level 121The Auxiliary Level 121

Diversity and Competition 122Competition and Price 123Competition and Quality 123Competition and Innovation 124

Government Regulation of Business 124Forms of Business Ownership 124Business Growth and Expansion 124

Internal Growth 124Mergers and Acquisitions 127The Franchise 128

extended contentsviii

Licensing 129Birth of a Fashion 130The Designer’s Role 131

Types of Designers 132Insight and Intuition 132Sources of Design Inspiration 132

The Manufacturer’s Role 133Types of Manufacturers 135

The Retailer’s Role 136Types of Retailers 136Fashion Influence 137


unit twoThe Primary Level: The Materials of Fashion 140

6 Textiles: Fibers and Fabrics 142The Fiber Industry 144History and Development 144

The Development of Natural Fibers 144The Development of Manufactured Fibers 147

Organization and Operation 152The Natural Fiber Industry 152The Manufactured Fiber Industry 152

Merchandising and Marketing 154Advertising and Publicity 154Research and Development 155Customer Services 157

Trends in the Fiber Industry 157The Textile Fabric Industry 158History and Development 158Organization and Operation 159

Types of Mills 160The Converter 160

Merchandising and Marketing 161The Industry’s Fashion Experts 161Textile Trade Shows and Fairs 161Advertising and Publicity 162Research and Development 162The Green Scene 163Customer Services 164

Trends in the Textile Fabric Industry 164

Production of High-Tech Fabrics 165Growing Global Competition 166Increasing Exports 167Greater Diversification of Products 168Increased Government Regulation 169New Technology in Equipment 169


7 Leather and Fur 172The Leather Industry 174History and Development 174Organization and Operation 175

Categories of Leather 176Leather Processing 176

Merchandising and Marketing 178Fashion Information Services 178Trade Associations and Trade Shows 179Research and Development 180

Trends in the Leather Industry 180Enlarging Markets 180Increased Competition from Synthetics 181Increased Foreign Trade 183Industry Growth Factors 183

The Fur Industry 184History and Development 184

Animal Rights Groups 187Manufactured Furs 188Real Fur versus Fake Fur 188

Organization and Operation 189Pelt Production 189Fur Auctions 189Fur Processing 191Fur Manufacturing 191

Retail Distribution of Furs 192Merchandising and Marketing 193

Trade Associations 193International Fur Fairs 193Labeling 194

Trends in the Fur Industry 194Renewed Fashion Interest 194Increased Foreign Trade 196New Legislation 196New Channels of Retail Distribution 196


extended contents ix

unit threeThe Secondary Level: The Producers of Apparel 198

8 Product Development 200What Is a Product Line, and Who Develops It? 202

Role of the Merchandiser 204Role of the Designer 204Role of the Producer 205

The Product Development Process 206Stage 1: Planning a Line 207Stage 2: Creating the Design Concept 208Stage 3: Developing the Designs 208Stage 4: Planning Production 209Stage 5: Production 210Stage 6: Distributing the Line 211

Specializing by Product 213By Gender, Age, and Size Categories,

and by Classification 213Brands and Labels 214

Industry Practices 216Manufacturers Acting as Retailers 216Licensing 217Private Label and Specification Buying 219Offshore Production 220Use of Factors 220Chargebacks 220

Advanced Technologies and Strategies 220Computer-Integrated Manufacturing 221Quick Response 221Bar Codes and Scanners 222Electronic Data Interchange (EDI) 222Mass Customization 223Body Scanning 223

Industry Trends 224Brand Extensions 224Industry Cooperation 226Globalization 226


9 Women’s Apparel 230History of the Women’s Apparel Industry 232

Growth of Ready-to-Wear 232Acceptance of Ready-to-Wear in the 20th Century 232

Growth of the Fashion District 233Organization and Operation of

the Women’s Apparel Industry 235Size of Producers 235Specialization by Product 235The Role of Designers 236Categories in Women’s Apparel 236Size Ranges 241Wholesale Price Points 244Seasonal Classifications 247

Merchandising and Marketing 248Advertising 248Publicity 250Fashion Shows, Press Weeks, and Trade Shows 250Trunk Shows 251DVDs and CD-ROMS 251Promotion Aids 252

Industry Trends 252Manufacturers as Retailers 252Licensing 253Offshore Production 253Increased Emphasis on Quick Response 254Use of Computers and the Internet 254


10 Men’s Apparel 256History of the Men’s Apparel Industry 258Birth of Ready-to-Wear 258

Role of the Industrial Revolution 258Mid- to Late 1800s 259Acceptance of Ready-to-Wear in the 20th Century 261The Last Decades of the 20th Century 263

Organization and Operation of the Industry 266Size and Location of Manufacturers 267Dual Distribution 268Designing a Line 268Market Segments 272

Merchandising and Marketing 275Advertising 275Publicity in Newspapers and Magazines 275Trade Associations 276

Industry Trends 277Trends in Production 277Increased Automation 277

extended contentsx

Foreign Production and Imports 278Specialty Trends in Retailing 278Style and Lifestyle 279Summary and Review 280

11 Children’s and Teens’ Apparel 282Psychological Importance of Children’s, Tweens’,

and Teens’ Clothes 284Demographics and the Children’s, Tweens’,

and Teens’ Apparel Industry 284History of the Children’s Apparel Industry 286Organization and Operation of the Children’s,

Tweens’, and Teens’ Apparel Industry 287Size Categories 288Special Features of Infants’ and Toddlers’ Wear 288Product Specialization 289

The Role of Fashion in Children’s Wear 290The Role of Fashion in Teens’ and Tweens’, Wear 291Merchandising and Marketing 292

Market Centers 293Trade Shows 293Designer Labels 295Licensing 296

Industry Trends 297Price Lines 299Offshore Production 299Specialty Retail Outlets 300Resale of Children’s Wear 301School Uniforms 303


unit fourThe Secondary Level: The Other Producers 306

12 Innerwear, Bodywear, Legwear 308An Overview of the Underwear

and Innerwear Industries 310Innerwear or Intimate Apparel 310

History and Development 310Categories of Intimate Apparel 313Market Centers 317Merchandising and Marketing 318

Market Segments 319Industry Trends 319

Men’s and Children’s Underwear and Sleepwear 322Men’s and Children’s Underwear 323Men’s and Children’s Pajamas and Robes 325

Bodywear 325Legwear 326Organization and Operation 329Merchandising and Marketing 329Industry Trends 330


13 Accessories 334Footwear 336

Organization and Operation 336Merchandising and Marketing 340Industry Trends 341

Handbags 342Organization and Operation 343Merchandising and Marketing 346Industry Trends 346

Belts 346Gloves 347


Millinery 350Neckwear 352Eyewear 353Jewelry 355


Other Accessories 364Trends in the Fashion Accessories Industries 365

Market Weeks and Trade Shows 365Retailing Accessories 365


14 Cosmetics and Fragrances 368History and Development

of the Cosmetics and Fragrance Industry 370Dreams Versus Science 370Legends Versus the New Entrepreneurs 372

extended contents xi

Organization and Operation of the Industry 373A Global Business 375The Main Categories 375Private-Label Manufacturers 380Copycat Scents 381Federal Laws 383Environmental Concerns 384

Market Segments 386The Male Market 386The Teen Market 387The Children’s Market 388The Ethnic Market 388The Home Fragrances Market 390The Export Market 390

Merchandising and Marketing 391Distribution 391Advertising and Sales Promotion 393

Trade Associations, Shows, and Publications 394Industry Trends 395

Antiaging Products 395Antibacterial and Antiallergenic Products 396Aromatherapy Products 396Spa Products 396Individualized Products 397Reflections of Trends 398


15 Home Fashions 400History of the Home Furnishings Industries 402

The Role of Linen 402The Evolution of Global Home Fashions 403

Organization and Operation of the Industries 403Size and Location of Soft Goods Manufacturers 403Size and Location of Tabletop Manufacturers 404Licensing 404Designing a Soft Goods Line 405Designing a Tabletop Line 407

Product Categories of Selected Soft Goods 409Bed Linens 410Bath Linens 411Table Linens 412Window Treatments 412Upholstery Fabric 413

Miscellaneous Soft Goods 413Area Rugs 413

Product Categories of Selected Tabletop Goods 416Dinnerware 416Glassware 417Flatware 418Hollowware 419Giftware 419

Market Segments 420Bridal 420New Home/Vacation Home 421Replacement 421

Market Resources 421Trade Associations 421Trade Shows 422Trade Publications 422

Merchandising and Marketing 422Retail Channels of Distribution 423Advertising and Publicity 424

Industry Trends 424Growing Fashion Influence 424Increased Automation in Design and Production 425Growth of Exports 425Increased Use of High-Tech Fabrics 425Increased Awareness of Ecological Issues 426


unit fiveThe Retail Level: The Markets for Fashion 428

16 Global Fashion Markets 430Market Terminology 432

Market 432Market Center 432Mart 432Market Weeks 433Trade Shows 434

History and Development of Market Centers in theUnited States 434

The Role of Sales Representatives 434The Role of Marts 434

extended contentsxii

Services of Market Centers and Marts 435Physical Facilities 435Publicity 435

Special Services for Market Week 436Information Services 436Educational Services 436General Services 436

The New York Market 436Trading Area and Economic Impact 436Advantages of the New York Market 437Disadvantages of the New York Market 438

The Regional Market Centers 439The Los Angeles Market 439The Dallas Market 439The Miami Market 440

The Regional Marts 440Trade Shows in the United States 440Foreign Fashion Markets 441

France 442Italy 446Great Britain 449Canada 450Other European Countries 451Mexico and South America 452The Far East 453

Trends in Global Fashion Markets 457Summary and Review 458

17 Global Sourcing and Merchandising 460Importing by Retailers 463

American Buyers’ Visits to International Fashion Markets 464Store-Owned Foreign Buying Offices 464Foreign Commissionaires or Agents 464Foreign Import Fairs in the United States 464American Importers 465

Importing by Manufacturers 465Product Development: Specification

and Private-Label Buying 466International Balance of Trade 467

Protectionism 470Free Trade 470

International Trading Laws 470

General Agreement on Tariffs and Trade (GATT) andWorld Trade Organization (WTO) 471Multi-Fiber and Textile Agreement (MFA) 471

U.S. Regulation of Textile and Apparel Imports 472Import Quotas 472Taxes: Tariffs and Duties 472Antisweatshop Commitments 472Counterfeit, Black Market, and Gray Market Goods 473

Preferential Programs 474Most-Favored Nations 475Tariff Schedules 807 (9802) and 807A 475Caribbean Basin Initiative (CBI) 475North American Free Trade Agreement (NAFTA) 475Central American Free Trade Agreement (CAFTA) 477

Penetration of the U.S. Market by Foreign Investors478Licensing 478

Penetration of Foreign Market by U.S. Companies 478Licensing 479Joint Ownership 479

U.S. Exporting 479Summary and Review 480

18 Fashion Retailing 482History and Development of Fashion Retailing 484

General Stores 485Peddlers 486Mail-Order Sellers 486Traditional Types of Fashion Retailers 487Department Stores 487Specialty Stores 489Discount Stores 492

Forms of Ownership 495Sole Proprietors 495Chain Organizations 496Leased Departments 497Franchises 497

Other Types of Fashion Retailers Today 497Off-Price Retailers 498

Factory Outlet Stores 499Category Killers 500Boutiques/Showcase Stores 500Nonstore Retailers 502Direct Selling 502

extended contents xiii

Catalog Retailers 502TV Home Shopping 503Internet Shopping Sites 504

Mergers and Acquisitions 505Merging for Efficiency and Expansion 505

Trends: Changing Retail Patterns 506Summary and Review 507

19 Policies and Strategies in Fashion Retailing 508Merchandising Policies 510

Fashion Cycle Emphasis 510Quality 511Price Ranges 511Depth and Breadth of Assortments 512Brand Policies 512Exclusivity 513

Operational Store Policies 513Ambiance 514Customer Services 515Selling Services 515Promotional Activities 517Frequent Shopper Plans 518

Location Policies 519Shopping Centers and Malls 519

Larger Malls 521Air Malls 522Lifestyle Retail Centers 523Resort Retailing 523Carts and Kiosks 523Temporary Sites: Pop-Up Stores 524

Emerging Retail Strategies 524Responding to the Customers’

Desire for Convenience 524Responding to the Decline of Customer Loyalty 525Responding to Customers’ Complaints

About Sameness 525Responding to the High Cost of Product Developmentby Forging Strategic Alliances 525

Trends in Retail Policies 526

Using New Technology 526Creating New Job Opportunities 528


unit sixThe Auxiliary Level: Supporting Services 530

20 Fashion Auxiliary Services 532Fashion Auxiliary Services Offered by the Media 534

Fashion Magazines 535General Consumer Publications 537Trade Publications 538The Broadcast Media 540

Advertising, Publicity, & Public Relations Agencies 545

Advertising Agencies 547Public Relations Agencies 548Other Advertising and Public Relations Services 548

Store Design and Visual Merchandising Services 548Store Design 549Visual Merchandising 550

Information Resources 552Fashion Consultants and Information Services 552Market Research Agencies 553Trade Associations and Trade Shows 553

Buying, Merchandising, and ProductDevelopment Organizations 554

Location 554Types of Ownership 555Functions of Buying, Merchandising,

and Product Development Organization 556Summary and Review 556

My Top 100 Designers 559 Glossary 563 References 575 Credit list 589Index 595

extended contentsxiv

Fashion is fast and forward, challenging and chang-ing, and constantly in motion. This new edition ofThe Dynamics of Fashion is presented to studentsand instructors so that they can be on the cuttingedge of what is happening in the business known asfashion. This updated text will prepare students tolearn and understand the innovation and challengeof careers in the global world of today’s fashionbusiness.

This third edition of The Dynamics of Fashionbroadens, updates, and brings new perspectives ofthe fashion business to students’ attention. It con-tinues with the broadened scope of fashion andadds the newest and most up-to-date facts and fig-ures used by professionals to keep the industry avital and challenging career path.

All chapters have been substantially updatedwith new and current theories added. Recurringthemes have been broadened, and the change in thefuture direction of fashion globalization, retailcompetition, theories of customer service, andcareer paths have been expanded. Technology andits impact on the movement of fashion, and thethreat of confrontations among nations, are dis-cussed in the context of the fashion business.

Organization of the TextThis edition of The Dynamics of Fashion uses thesuccessful classroom-tested organization of theprevious editions. It is structured in the followingsequential learning order:

Unit One: The Changing World of FashionThe first unit examines how and why fashion evolvesand changes. It explains the principles around whichfashion revolves and the role that economic, sociolog-ical, and psychological elements play in the cyclicalnature of fashion. It also covers the business scope ofthe industry including recent growth and expansion.Chapter 1 is a new chapter on fashion history, whichfocuses on the development of fashion design andexplains how it has grown into a major force for thefuture. There is a special project at the end of thischapter that helps students learn how designers relateto fashion and the decade to which they belong.

Fashion operates in a far different way today thanit did years ago. It moves faster and reaches morepeople. And perhaps most important, it is morebusinesslike. To understand the changes that haveoccurred and will occur in the future of the fashionindustry, you must first understand the dynamicsthat underlie the fashion business.

Unit Two: The Primary Level: The Materials of FashionThe growers and producers of the raw material offashion, fibers, fabrics, trimming, leather, and furare covered in this unit. New and fast-movingadvances in these industries coupled with anincreasing variety of fashion goods using thesematerials are explained. The difference betweennatural and manufactured fibers is explained, alongwith the worldwide impact of global warming, the

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preface

sustainability of products made from “green” fibers,and the production process of most fabrics. Leatherand fur are also covered in detail. Different cate-gories of leather, special finishes, real and faux fur,the development of these industries, and the stepsin producing and marketing are examined.

Unit Three: The Secondary Level: The Producers of ApparelThe third unit begins with a chapter on productdevelopment. Students will learn about the six-stage process of developing and producing a line,the concept of Quick Response, and the majorindustry practices of licensing, private label, speci-fication buying, offshore production, factors, andchargebacks. Industry trends in apparel are thenbroken down into separate chapters focusing onwomen’s, men’s, and children’s apparel.

The history of the women’s apparel industry isexplained, along with the categories, size ranges,price zones, and brand and designer names used inmarketing. The next chapter compares and con-trasts all the factors that are common to both men’sand women’s apparel and explains the differencesthat exist in producing and marketing men’s wear.For children’s apparel, the impact of demographicsis explained, along with the influence of fashion onchildren’s wear, the impact of licensing, industrytrends, and responses to social issues.

Unit Four: The Secondary Level: The Other Fashion ProducersThe producers of innerwear, accessories, cosmetics,fragrances, and home fashions no longer exist justto coordinate with apparel. These industries havebecome innovators and fashion trendsetters. Thisunit explains how each industry functions and cov-ers current and future practices and trends.

Innerwear, bodywear, and legwear are all dis-cussed in terms of history, merchandising, andmarketing. The ever-expanding accessories indus-tries—which today are taking advantage of thenewest technology—are explored from their past to

the present. Cosmetics and fragrances have becomepowerhouse industries, and students will engagewith the “dreams versus science” debate and learnabout new market segments. Another rapidly grow-ing area is home fashions. The final chapter in thisunit outlines the growing influence of top appareldesigners who are increasingly expanding theirrange by producing looks for the home as well.

Unit Five: The Retail Level: The Markets for FashionThis unit focuses on the elements of fashion mar-keting and reveals how markets operate to helpmanufacturers sell their products and how retailerssatisfy the needs of their target customer. It detailsboth domestic and foreign markets and globalsourcing. Different types of retailers are explained,and current trends and emerging retail strategiesfor the 21st century are detailed.

One chapter is devoted to global fashion marketsand their unique offerings and personalities. Wealso take a closer look at global sourcing—both theadvantages and disadvantages as American indus-tries continue to expand into foreign markets. Thischapter also discusses the single biggest problemconfronting the American fashion industries today:the need to export American fashion around theworld in order to reduce the trade deficit that hasarisen from so many imports. The history anddevelopment of fashion retailing in the UnitedStates is explained, including the different types ofretailers and changing retail patterns. Also dis-cussed are current policies and strategies in fashionretailing and how they affect merchandising, opera-tions, and location.

Unit Six: The Auxiliary Level: The Supporting ServicesPublicity is crucial for all areas of the fashionindustry, and the final unit in this book covers themyriad fashion services and explains their inter-connecting roles in the fashion business from

prefacexvi

design to consumer. Advertising and print mediasuch as fashion magazines and newspapers are dis-cussed, along with television, other broadcastmedia, and the Internet. The role of advertisingagencies, fashion consultants, and public relationsfirms are explored. Visual merchandising and storedesign are also important aspects of promotion.Finally, we will have a look at the industry publica-tions and organizations that work to provide infor-mation and other services.

Text FeaturesThe Dynamics of Fashion provides hundreds of newexamples, color illustrations, and has many excit-ing special features that make the people, princi-ples, practices, and techniques of the fashion busi-ness come alive in the minds of students. Webelieve that these features will help students tolearn about the fashion business in an enjoyablemanner. All these features are appropriate for classdiscussion, library research projects, and groupprojects.

Fashion FocusA popular feature, the “Fashion Focus,” highlightsinteresting people, places, and/or products thatimpact on the subject matter. This feature is foundin every chapter and makes the chapter materialmore relevant to the student.

Then and Now“Then and Now” is a feature that encourages thestudent to look to the past, present, and future ofsubjects that have a lasting imprint on fashion.Many are presented in exciting pictorial format.

Famous DesignersThis edition features a compilation of famousdesigners, including noteworthy elements of theirdesigns.

GlossaryThe glossary has been updated and enlarged andnow contains nearly 500 industry terms. A knowl-edge and understanding of the “language” of fash-ion gives students a firm footing upon which theycan step out into the industry and know they arespeaking the right language.

Summary and ReviewThe chapters conclude with student-oriented activi-ties designed to enrich and reinforce the instruction-al material. A summary gives a quick reminder of keyconcepts. A “Trade Talk” section explains fashion &merchandising terms introduced for the first time inthat chapter. The student will recognize these termswhen they appear in subsequent chapters. Theseterms are also defined in the glossary.

“For Review” asks questions about the key con-cepts of each chapter. These questions provokethought, encourage classroom discussion, anddevelop recall of the material presented in the text.

“For Discussion” asks the student to explain thesignificance of a major concept and to support theexplanation with specific illustrations. This activityaffords the student an opportunity to apply theoryto actual situations and to draw on his or her ownbackground and experiences.

Instructor’s Manual and PowerPointAn instructor’s manual is available and includes anumber of options for organizing the course andcontains general suggestions for teaching thecourse. It also contains supplementary assignmentsfor each unit. The key to the text includes answersto all end-of-chapter exercises.

A useful feature is a test bank containing materi-al for the individual units, and a final examination.The tests are composed of 100 objective questionseach and are ready to duplicate.

A PowerPoint presentation is included as a sup-plemental teaching tool for the classroom, featur-ing art and text from the book.

preface xvii

AcknowledgmentsI am grateful to the many educators and business-people who have given me encouragement, infor-mation, and helpful suggestions. Among these aremy teaching colleagues at the Fashion Institute ofTechnology, who have supported the writing ofThe Dynamics of Fashion, and the very helpful staffof professionals in the FIT library.

I am also indebted to the industry experts andprofessionals, both domestic and foreign, who gaveof their time and expertise to ensure the timelinessand accuracy of the information in this book.

My heartfelt gratitude and sincere appreciationgoes to the staff at Fairchild Publications. I partic-ularly want to mention Elizabeth Marotta, the sen-ior production editor at Fairchild and the personwho really made this edition possible by her com-plete attention to every detail, and most of all forbeing a friend in need, who helped me on all phas-es of producing this book. To Adam Bohannon,the best art director ever, whose enthusiasm forthis book, and unfailing artistic eye for design and

color has made Dynamics of Fashion a real dynamic!To Erin Fitzsimmons for doing the photo researchand bringing together the best photos to makethis edition so wonderful. To Anne Sanow for hercontributions to the new chapter. Thanks to TaniaGrey of Stoneworks Design for her wonderfuldesign and production of the PowerPoint presen-tation. Finally to the Executive Editor, OlgaKontzias, I say a heartfelt “thank you” for all theyears we have worked together.

I regret that space does not permit me to per-sonally list and thank my friends in all segmentsof the fashion business who supplied, throughoutthe development of this edition, their encourage-ment as well as significant amounts of current andtrend trade information. As always, I welcomeinstructors’ and students’ comments. They can besent to me through Fairchild Publications or tomy e-mail address: [email protected].

This book is dedicated to Minnie M. Stone, whoserved as a mentor, friend, and critic throughoutmy career. Best of all, she was a terrific mother.

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the dynamics of fashion

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Fashion is a business, affected bythe same technological advances,investment patterns, and eco-nomic forces that affect othermajor businesses in the world.Fashion is not limited just toapparel; it impacts our complete

lifestyle as well as the products we buy. Fashioninfluences the automobile, housing, and entertain-ment industries, and like these industries, it isshaped by the basic principles of business and eco-nomics.

What is business? Business is the activity of cre-ating, producing, and marketing products or servic-es. The primary objective of business is to make aprofit. Profit, or net income, is the amount ofmoney a business earns in excess of its expenses.Consequently, in the United States, business can bedefined as the activity of creating, producing, andmarketing products or services for a profit.

Economic Importance of the Fashion BusinessThe business of fashion contributes significantly tothe economy of the United States through thematerials and services it purchases, the wages andtaxes it pays, and the goods and services it produces.The fashion business is one of the largest employ-ers in the country. However, employment hasdeclined almost by half since the industry boom inthe early 1970s. Now, more than 478,000 people inthe United States are employed either in factoriesthat produce apparel for men, women, and childrenor in textile plants that produce the materials fromwhich garments are made.1

More people are employed in apparel produc-tion than in the entire printing and publishingbusiness or the automobile manufacturing indus-try. In addition, more than 133,000 people areemployed in producing such fashion items as furand leather garments and accessories, jewelry and

cosmetics; hundreds of thousands more areemployed by the retail organizations that distributethese goods. When we add to this number a share ofthe total number of jobs in finance, transportation,advertising, computers, electronics, and other serv-ices that devote part of their efforts to the fashionindustry, it becomes obvious that the fashion indus-try has a tremendous impact on our economy.

The growth and development of mass markets,mass-production methods, and mass distributionhave contributed to the creation of new job oppor-tunities in the fashion industry—not only in theproduction area but in design and marketing aswell. Young people are entering the fashion busi-ness in greater numbers each year and are having amarked effect on the business. Innovation andchange have become increasingly important factorsin the economic growth of the fashion business.

Scope of the Fashion BusinessThe fashion business is composed of numerousindustries all working to keep consumers of fash-ion satisfied (see Figure 5.1). A special relationshipexists among these industries that makes the fash-ion business different from other businesses. Thefour levels of the fashion business—known as theprimary level, the secondary level, the retail level,and the auxiliary level—are composed of separateentities, but they also work interdependently toprovide the market with the fashion merchandisethat will satisfy consumers. Because of this uniquerelationship among the different industries, thefashion business is unusually exciting.

The Primary LevelThe primary level is composed of the growers andproducers of the raw materials of fashion—the fiber,fabric, leather, and fur producers who function inthe raw materials market. The earliest part of theplanning function in color and texture takes placeon the primary level. It is also the level of the fashion

120

business that works the farthest in advance of theultimate selling period of the goods. Up to twoyears’ lead time is needed by primary-level compa-nies before the goods will be available to the con-sumer. Primary-level goods may often be importsfrom third-world emerging nations, where textilesare usually the earliest form of industrialization.

The Secondary LevelThe secondary level is composed of industries—manufacturers and contractors—that produce thesemifinished or finished fashion goods from thematerials produced on the primary level. On thesecondary level are the manufacturers of women’s,men’s, and children’s apparel and also legwear,bodywear, and underwear; accessories; cosmeticsand fragrances; and home furnishings.

Manufacturers who function on the secondarylevel may be based in the United States or overseas.Fashion goods are now produced in the Far East,the Caribbean, South America, and Europe. Sec-ondary-level companies work from six to eighteen

months ahead of the time that goods are availableto the consumer.

The Retail LevelThe retail level is the ultimate distribution level.On this level are the different types of retailers whobuy their goods from the secondary level and thensupply them directly to the consumer (see Figure5.2). In many cases, the retail level works with boththe primary and secondary levels to ensure a coor-dinated approach to consumer wants. The interre-lationship among the primary, secondary, and retaillevels is vertical. The farther removed a level is fromthe consumer, the farther in advance it must plan.Retailers make initial purchases for resale to cus-tomers from three to six months before the cus-tomer buying season.

The Auxiliary LevelThe auxiliary level is the only level that functionswith all the other levels simultaneously. This level is

chapter fivethe business of fashion 121

FarmsLaboratories

FiberYarns

Greige GoodsConverters

PRIMARY LEVEL

SELLTO

DesignersManufacturers

ContractorsWholesalers

Vendors

SECONDARY LEVEL

SELLTO

Department StoresSpecialty Stores

Chain StoresMail Order/Catalogs

BoutiquesDiscount StoresOff-Price StoresFactory Outlets

Category KillersWholesale Clubs

Flea MarketsMom & Pop StoresMass Merchants

SuperstoresInternet

RETAIL LEVEL

CONSUMERS

SELLTO

AUXILIARY LEVEL

• Buying/Merchandising/ Product Development Offices• Fashion Forecasters• Specialists / Consultants• Trade Associations

• Magazines• Newspapers• Advertising Agencies• Research Agencies

The Levels of the Fashion Industry

figure 5.1 The fashion industry operates collaboratively on four levels to serve the customer.

composed of all the support services that are work-ing constantly with primary producers, secondarymanufacturers, and retailers to keep consumersaware of the fashion merchandise produced forultimate consumption. On this level are all theadvertising media—print, audio, and visual—andfashion consultants and researchers.

Diversity and CompetitionThe enormous variety and diversity that exist inthe kinds and sizes of firms that operate on eachlevel of the fashion industry make it a fascinating

and competitive business. There are giant firms,both national and international, and small compa-nies with regional or local distribution, doingbusiness side by side as privately or publiclyowned corporations, partnerships, or sole propri-etorships. Fashion-producing companies may alsobe part of conglomerates, which also own, forexample, entertainment companies, oil wells, pro-fessional sports teams, or consumer foods andproducts divisions.

Whether large or small, the different types ofproducers have one need in common—the need tounderstand what their ultimate customer will buy.

unit onethe changing world of fashion122

figure 5.2 The retail level includes nonstore retailers, such as the Home Shopping Network (HSN).

Only through complete understanding and cooper-ation can the four levels of the fashion business beaware of new developments in fashion and applythem to satisfy the wants of their customers. Thiscooperation allows them to have the right merchan-dise at the right price, in the right place, at the righttime, in the right quantities, and with the right salespromotion for their customers.

However, when you begin to try to sell a productor service in our economic system, chances are thatsomeone else will be trying to sell something simi-lar. No matter what the size of the firm involved,potential customers are free to buy where theyplease and what they please. Each company mustcompete with the others for those customers’ busi-ness. A company can choose to compete in one ofthree ways: price, quality, or innovation.

Competition and PriceSelling blue jeans for less than your competition maybring you more business. However, you are taking inless money than your rival does on each pair sold,and you still have to cover the same cost and expens-es. The hope is that your lower price will attract morecustomers, sell more jeans than your competition,and so come out with a good overall profit. Head-to-head competition like this tends to keep pricesdown, which is good for the buying public. At thesame time, it allows a company to look forward to apromise of profits if it can sell more of its product orservice than competitors do (see Figure 5.3).

Competition and QualityRather than sell your jeans for less than your com-petition, you may choose to compete for customersby offering higher-quality goods. Although you maycharge more for your jeans, you offer a better fit,more durable fabric, or better styling. This possibil-ity provides a practical incentive for businesses tomaintain high standards and increases the choicesavailable to consumers.

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figure 5.3 These three coats are similar in style but different inprice: Banana Republic’s coat is about $195 (top), the Gap’s coat is about$70 (bottom), while Old Navy sells its coat for about $40 (middle).

Competition and InnovationOur economic system not only encourages variationsin quality and price, it also encourages immense vari-ety in the types of merchandise and services offeredto the public. Changes in taste and new technologybring about innovation, so that your jeans could betrimmed or untrimmed, designer made, or Frenchcut. The economy and the competitive environmentare constantly creating new business opportunities.The result is an astonishing diversity of businesses.

Government Regulation of BusinessThe right of government to regulate business isgranted by the U.S. Constitution and by state consti-tutions. There are two basic categories of federal leg-islation that affect the fashion industry: (1) laws thatregulate competition, and (2) labeling laws designedto protect consumers. Table 5.1 lists the key federallaws that affect and/or regulate the fashion industry.

Forms of Business OwnershipOwnership of a fashion business—or of any busi-ness—may take many different legal forms, eachcarrying certain privileges and responsibilities. Thethree most common forms of business ownershipare the sole proprietorship, the partnership, and thecorporation. Corporations tend to be large-scaleoperations that account for the greatest share of theprofits earned by U.S. business. However, sole pro-prietorships are more numerous, accounting formore than 70 percent of all business.

Each form of ownership has a characteristicstructure, legal status, size, and field to which it isbest suited. Each has its own advantages and disad-vantages and offers a distinctive working environ-ment with its own risks and rewards (see Table 5.2).

Business Growth and ExpansionFor the past few years, business activity has focusedon the change in forms of business growth and

expansion. The news media is filled with reports ofbusinesses buying and selling other businesses andseeking new methods to make themselves moreefficient and competitive.

One of the most distinct changes in the fashionbusiness has been the rise of corporate giants whichgrew through mergers, acquisitions, and internalexpansion. The growth of these giants has changedthe methods of doing business, and has led to thedemise of old-time famous-name sole proprietor-ships, partnerships, and small companies thatcould no longer compete.

Growth and expansion are fundamental totoday’s business world. Corporate growth hasbecome a major economic, political, and socialissue in recent years. Growth and expansion canoccur in a variety of ways—internal growth, merg-ers, and acquisitions. Many large corporationsgrow by more than one of these methods. Forexample, cosmetics giant Estée Lauder developedthe Prescriptives brand to expand to a moreupscale consumer market. The company alsoacquired several smaller companies that cater to ayounger market, including Bobbi Brown andMAC.

Internal GrowthA company’s ability to grow internally determinesits ability to offer more service and broader assort-ments of merchandise, and to increase profits. Thisis true because internal growth is real growth interms of creating new products and new jobs. Inter-nal growth can be accomplished through horizontalmeans, vertical means, or both. When a companyhas horizontal growth, it expands its capabilities onthe level on which it has been performing success-fully (see Figure 5.4). An apparel company could addnew lines to diversify its product offerings; a retailstore could open new branches. When a companyhas vertical growth, it expands its capabilities onlevels other than its primary function. An apparelcompany could begin to produce its own fabric or


Table 5.1 Key Federal Laws A! e" ing the Fashion Industry

Laws Affecting Competition Purpose and Provisions

Sherman Antitrust Act—1890 Outlawed monopolies. Outlawed restraint of competition.

Clayton Act—1914 Same purpose as Sherman Act but reinforced Sherman Act by defi ning some specifi c restraint—for example, price fi xing.

Federal Trade Commission (FTC) Act—1914 (Wheeler–Lee Act of 1938 amended the FTC Act.)

Established the FTC as a “policing” agency. Developed the mechanics for policing unfair methods of competition—for example, false claims, price discrimination, price fi xing.

Robinson–Patman Act—1936 Designed to equalize competition between large and small retailers (i.e., to reduce the advantages that big retailers have over small retailers—outgrowth of 1930 depression and growth of big chain retailers in 1920s.) Examples of provision of law:

1. Outlawed price discrimination if both small and large retailers buy the same amount of goods.

2. Outlawed inequitable and unjustifi ed quantity discounts (e.g., discounts allowable if (a) available to all types of retailers and (b) related to actual savings that vendor could make from quantity cuttings or shipments.)

3. Outlawed “phony” advertising allowance monies—that is advertising money must be used for advertising.

4. Outlawed discrimination in promotional allowances (monies for advertising, pro-motional display, etc.)—equal allowances must be given under same conditions to small and large retailers alike.

Cellar–Kefauver—1950 This law made it illegal to eliminate competition by creating a monopoly through the merger of two or more companies.

Product and Labeling Laws Designed to Protect Consumers Wool Products Labeling Act—1939; amended in 1984

Purpose and Provisions Protects consumers from unrevealed presence of substitutes or mixtures. FTC responsible for enforcing law.

Fur Products Labeling Act—1951 Protects consumers and retailers against misbranding, false advertising, and false invoicing.

Flammable Fabrics Act—1954; revised in 1972

Prohibits manufacture or sale of fl ammable fabrics or apparel.

Textile Fiber Identifi cation Act—1960; amended in 1984

Protects producers and consumers against false identifi cation of fi ber content.

Fair Packaging and Labeling Act—1966 Regulates interstate and foreign commerce by prohibiting deceptive methods of pack-aging or labeling.

Care Labeling of Textile Wearing Apparel Ruling—1972; amended in 1984, 1997

Requires that all apparel have labels attached that clearly inform consumers about care and maintenance of the article.

Table 5.2 Advantages and Disadvantages of Each Form of Business Ownership

Form of Ownership Advantages Disadvantages

Sole proprietorship (single owner) • Ability to keep all profi ts• Simple to form and easiest to dissolve• Ownership fl exibility

• Unlimited fi nancial liability• Limited capital• Management defi ciencies• Lack of continuity

Partnership (a few owners) • Ease of formation• Complementary management skills• Greater fi nancial capacity than sole

proprietorship• Less red tape than corporation

• Unlimited fi nancial liability• Interpersonal confl icts• Lack of continuity if partner dies• Harder to dissolve than sole proprietorship

Corporation (Inc.) (many owners) • Limited fi nancial liability• Specialized management skills• Greater fi nancial capacity than other

forms of ownership• Economies of larger-scale operation• Easy to transfer ownership

• Diffi cult and costly form to establish and dissolve ownership

• Tax disadvantage• Legal restrictions • Depersonalization

FashionFocusFashionFocus

Those who believe that designers spend all daysketching in their studios should reconsidertheir choice of career. It takes a mountain of

concerns and then some for designers to convey theirmessage. Be media-savvy, aware of global issues, andclever enough to bottle these qualities into a brandidentity that speaks to the consumer. Oh, and don’t for-get to bring along design talent! That’s the advice thosein the know offer to anyone who aspires to the glam-orous title of fashion designers.

In the past, designers spent their days—and theirnights—sketching, sewing, and draping, but the rolehas shifted as fashion has evolved into a billion-dollarglobal business over the past two decades. As a result,designers have to represent their labels 24/7. Ideally, theyshould become their brand. And, while they are at it,they shouldn’t neglect world events!

Designers must also predict what their customerswill want months before they know themselves. In fact,the laundry list of what designers have to do todayappears endless.

Now there is the growing competition from celebrity-designers who enter the fashion fray with well-establishednames and a solid following of fans around the world. Youngdesigners can find other avenues to help them gain recogni-tion. Fashion festivals and scholarships certainly help. Globally,fashion philanthropists are doing more than doling out cash.Nathalie Dufour, who runs France’s Andam prize, says, “Theidea is to help designers who are starting out to understandwhat type of businessstrategy could helpthem to develop.”

The steps to becom-ing a fashion designermirror what the Coun-cil of Fashion Design-ers of America (CFDA)is doing with itsCFDA/Vogue FashionFund. The CFDA selectsthree designers eachseason for financing of

up to $200,000,as well as men-toring from asenior executivefrom within theindustry. In theUnited Statesgenerally,though, youngdesigners tend toget funding moreby doing consul-tancy work forlarge companiesand assisting onteams of leadingdesigners than byparticipation infestivals orthrough scholar-ships.

France’s Chambre Syndicale also is involved insupporting young designers. The biggest hurdle ayoung designer often faces his naïveté in the ways ofthe world and the fast-changing nature of today’sfashion business. It is not enough to design! Youngdesigners must have a product that is produced in aninnovative way.

Today, young designers have a new set of eyes

Young DesignersGo! Go! Go!—

But Go Slow!Can You Handle it?

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could retail its manufactured goods in stores thatthe apparel company owns.

Mergers and AcquisitionsIn a merger (or acquisition) a sale of one companyto another company occurs, with the purchasingcompany usually remaining dominant. Compa-nies merge to form a larger corporate organiza-tion for many reasons. They may wish to takeadvantage of a large corporation’s greater pur-chasing power, or they may want to sell stock toobtain the financial resources needed for expan-sion. The desire to constantly increase sales isoften able to be fulfilled only by a merger. At theretail level, for example, the acquisition of Macy’sby Federated Department Stores extended theconglomerate’s market to include Macy’s cus-tomers.

Operating economies can often be achieved bycombining companies. Many times duplicate facili-ties can be eliminated, and marketing, purchasing,and other operations can be consolidated. Diversi-fication, the addition of various lines, products, orservices to serve different markets, can also be amotive for a merger. For example, the acquisition ofBanana Republic by the Gap broadened the Gap’smarket to reach customers for clothing at higher


figure 5.4 An example of internal growth is Donna Karan’s expansion of its DKNYline.

analyzing theirdesigns: privateequity firms andinvestmentbankers. Theseinvestors areinterested inyoung design-ers who havealready grownto the $2 millionmark and havethe potential togrow further.Among recentdesigners havebeen Anna Sui,CatherineMalandrino,Hussein Cha-layan, andPhoebe Philo.

And let’s notforget Derek Lam, who as a young designer worked as anassistant to Geoffrey Beene and for Michael Kors; or PeterSom, who was recognized in 1997 by the CFDA as a risingyoung talent in the scholarship competition and honed hisskills in the design rooms of Bill Blass, Michael Kors, andCalvin Klein.

You have tohone yourskills andspend timeworking withand learningfrom the stardesigners. As ayoung design-er, your pathto star successis Go! Go!Go!—but goslow!

price points. Then the Gap started Old Navy toreach to even lower price points. Now the companycovers three price points.

The FranchiseA rapidly growing business arrangement is thefranchise. This arrangement is a contract thatgives an individual (or group of people) the rightto own a business while benefiting from theexpertise and reputation of an established firm. Inreturn, the individual, known as the franchisee,pays the parent company, known as the franchisor,a set sum to purchase the franchise and royaltieson goods or services sold. Franchises may beorganized as sole proprietorships, partnerships, orcorporations, although the form of businessorganization that the franchise must use may bedesignated in the franchise contract.

Franchises generate one-third of all retail salesin the United States today and are steadily growingin volume, according to industry reports. Althoughthe franchise arrangement is most widespread

among fast-food restaurants, convenience stores,and automobile dealers, franchises can be found atmany levels of the fashion business, especially inretailing.

The growth in the number of manufacturer-franchised shops is phenomenal. Although we learnmuch more about designer-name franchising whenwe cover the apparel industries, it is important tonote that Ralph Lauren, Donna Karan, and Oscar dela Renta as well as Armani, Benetton Group S.p.A.(see Figure 5.5), BCBG, Hugo Boss, and Juicy Cou-ture are all involved in designer-franchised bou-tiques and shops in major cities throughout theUnited States, Europe, and Asia.

AdvantagesFranchising offers advantages to both the fran-chisee and the franchisor. The franchisee can getinto business quickly, use proven operating meth-ods, and benefit from training programs andmass purchasing offered by the franchisor. Thefranchisee is provided with a ready market thatidentifies with the store or brand name, thus


figure 5.5 Benetton Group S.p.A. is a popular designer franchise across the globe.

assuring customer traffic. The franchisor has agreat deal of control over its distribution net-work, limited liability, and less need for capitalfor expansion. Expansion is therefore more rapidthan would be possible without the franchisingarrangement. Royalty and franchise fees add tothe profits of the parent company, and the per-sonal interest and efforts of the franchisees asowner-managers help to assure the success ofeach venture.

DisadvantagesFranchising also has drawbacks for both parties.The franchisee may find profits small in relation tothe time and work involved, and often has limitedflexibility at the local level. In addition, there is therisk of franchise arrangements organized merely tosell franchises rather than for their long-rangeprofitability to all parties involved. The franchisormay find profits so slim that it may want to ownstores outright rather than franchise them.Attempts to buy back franchises often lead to trou-bled relations with the remaining franchises.

LicensingLicensing is an increasingly popular method ofexpanding an already existing business. Licensingis a legal arrangement whereby firms are given per-mission to produce and market merchandise in thename of the licensor for a specific period of time.The licensor is then paid a percentage of the sales(usually at the wholesale price) called a royalty fee.The royalty fee usually ranges from 2 to 15 percent.

Licensing grew tremendously in the late 1970sand through the 1980s and 1990s. By 2000, retailsales of licensed fashion merchandise in the UnitedStates and Canada reached almost $12.7 billion. Ofthat total, apparel accounted for $4.23 billion, acces-sories for $1.821 billion, footwear for $88 million,and health and beauty aids for $2.5 billion.2

The first designer to license his name to a man-ufacturer was Christian Dior, who lent his name to

a line of ties in 1950. Today, many of the best-known women’s and men’s apparel designers arelicensing either the use of their original designsor just their names without a design for a widevariety of goods, from apparel to luggage. Manyfashion labels—Ralph Lauren and Betsey Johnson,for example—also extend into home furnishingsthrough licensing. Among the many Americandesigners involved in licensing are BCBG MaxAzria, Joe (Joseph Abboud), Michael (MichaelKors), Bill Blass, Calvin Klein, Ralph Lauren, andOscar de la Renta. Most customers are not awarethat some of the fashion merchandise they buy islicensed. For example, to customers every KennethCole product is made by Kenneth Cole. In fact, thislicensor manufactures no merchandise in house(see Figure 5.6).

figure 5.6 Many consumers are not aware that fashion merchandise from KennethCole is not manufactured by the designer.

The licensing phenomenon is not limited toname designers. Manufacturers of athletic shoesexpand their business enormously by licensingtheir logos and names to producers of active sports-wear. Nike, Reebok, and Adidas have been particu-larly successful. Popular movies and TV shows havespawned apparel and other products based on theirthemes or characters. Disney’s sales of licensedmerchandise are $7.5 billion to $8 billion annually.3Comic or movie characters like Spider-Man, Dorathe Explorer, Kidrobot, and Strawberry Shortcakeare also frequently licensed, as are most profession-al sports teams and many players or athletes.4

The advantage of a licensing arrangement to amanufacturer is that the merchandise is identifiedwith a highly recognizable name, which also generallyconnotes high quality and produces sales (see Figure

5.7). Of course, the manufacturer also risks the design-er’s popularity fading. However, many manufacturersproduce licensed goods for several designers.

The recognition factor can be valuable to retail-ers in presenting their own fashion image. And toconsumers, the designer name not only indicates acertain quality of merchandise but symbolizes sta-tus or achievement as well. Because of that built-inappeal, stores have stocked up on designer goodsfrom socks to fragrances and jewelry.

Designers’ Retail ProgramsA famous designer name is a strong selling point atretail. Licensing spreads a designer’s name whilegiving the financial responsibility—and risk—tolicensees who are specialists in their respectiveproduct categories. For example, Phillips-VanHeusen (PVH), originally a men’s shirt manufactur-er, today has a portfolio of licensed brands. Fromdesigner labels such as Geoffrey Beene, KennethCole, Calvin Klein, BCBG Max Azria, and MichaelKors to those with celebrity appeal, which includethe Sean John and Donald Trump licenses, PVH iscurrently looking into licensing luggage and watch-es across all their brands.

PVH consumers can shop for their licensedproducts in more than ninety different countries,including Australia, the Netherlands, France, Den-mark, India, United Kingdom, Portugal, China, andSouth Africa.5

Birth of a FashionBut how do fashions generally begin? Who startsthem, who sponsors them, and what influences cus-tomers to accept them? Answers to these questionsare complex and involve designers, manufacturers,retailers—and most of all—customers.

The myth that every change in fashion is causedby a designer seeking a new way to make money is,of course, not true. As we saw in Chapter 1, it is con-sumers who bring about changes in fashion. Theneeds and wants of consumers change. Their ideas

130Retail Sales of Licensed Fashion

Merchandise by Product CategoryU.S. and Canada, 2006 (in millions of dollars)

Retail Sales 2000Accessories $1.84

Apparel $4.22

Footwear $.88

Health/Beauty $2.55

Retail Sales 2006Accessories $6.60

Apparel $8.90

Footwear $2.00

Health/Beauty $4.60

Share of Total (2006)Accessories 9%

Apparel 12%

Footwear 6%

Health/Beauty 9%

figure 5.7 Retail sales of licensed fashion merchandise hasincreased over the years.

about what is appropriate and acceptable change, asdo their interests in life. These are all reasons thatinfluence fashion designers and manufacturers toproduce new and different styles for consumers’consideration. The charting, forecasting, and satis-faction of consumer demand are the fashion indus-try’s main concerns.

Current trends in consumers’ purchasing, life-styles, and attitudes are noted and analyzed. Subse-quently, the trends are interpreted and presented toconsumers in the form of new styles. Designers andmanufacturers influence fashion by providing anunending series of new designs from which con-sumers choose how best to express their individuallifestyles.

Many precautions are taken to ensure thatdesigners are presenting what customers want.Even so, at least two-thirds of the new designsintroduced each season by the fashion industryfail to become fashions. Some designs are intro-duced too early, before the public is ready toaccept them. Other designs fail because they aretoo extreme for consumer acceptance. Still otherdesigns fail to become fashions because althoughthey are commonly accepted in many places, theymeet pockets of resistance in certain areas of thecountry. What is worn in New York is not necessar-ily what consumers in less urban areas of the Unit-ed States are ready to accept (see Figure 5.8). Thinkabout the hot pants, the harem pants, the peasantlooks of the 1970s, the punk-rock extremes of the1980s, and the celebrity nakedness in 2007. Only atrend that reflects a nationwide mood will suc-cessfully cross the United States from ocean toocean and affect the lives and wardrobes of allthose in between.

The Designer’s RoleThe days when the design world was populated by afew visionaries whose ideas produced all thedesigns for the public are long gone. Today, thereare unlimited opportunities in the field of design

for those who have the special talents, both artisticand practical, that are needed to shape the con-sumer’s world. Designers are everywhere, and theydesign everything—fashions, furnishings, house-wares, and office equipment. Their tools range frompencil and sketchpad to computer programs.

Designers must continually study the lifestylesof those consumers for whom their designs areintended. Because designers work far in advance oftheir designs’ final production, they must be able topredict future fashion trends. Designers must beaware of the effects of current events, socioeconom-ic conditions, and psychological attitudes on fash-ion interest and demand.

In creating designs that not only reflect con-sumer attitudes and needs but also give expressionto artistic ideas, fashion designers are continuallyinfluenced and limited by many factors. Of particu-

131

figure 5.8 What Anna Wintour, editor-in-chief of Vogue, iswearing in New York may not yet be seen in less urban areas of theUnited States.

lar importance are practical business considera-tions. All designs must be produced at a profit andwithin the firm’s predetermined wholesale pricerange. Consequently, designers must consider theavailability and cost of materials, the particularimage that the firm wants to maintain, availableproduction techniques, and labor costs. Greatdesigners use their creativity to overcome all theselimitations and to produce salable, exciting designs.

Types of DesignersMost designers can be classified in one of the fol-lowing three categories:

1. High-fashion or “name” designers are responsiblefor the full range of decisions of a fashionhouse as well as for establishing the image andcreating designs for the company. They designready-to-wear lines as well as custom designs,and many license the use of their prestigiousnames to manufacturers of accessories, fra-grances and cosmetics, and home fashions.Some, like Ralph Lauren in the United States,run houses that bear their own name. Otherstake over a design company at the death orretirement of its founder. For example, KarlLagerfeld took over the designing reins atChanel, in addition to running his own studio.

2. Stylist-designers work for manufacturers andadapt the designs of others, typically of namedesigners. Usually they create variations in lessexpensive fabrics to appeal to a market forlower-priced merchandise at the late rise orearly culmination stage of the fashion cycle.

3. Freelance designers sell sketches of their originaldesigns or adaptations to manufacturers. Free-lancers typically work out of design studios.They are not involved in the selection of fabricsand colors or in the business decisionsrequired to manufacture the products based ontheir designs. Donna Karan, now an interna-tionally recognized name designer, got her startdesigning for Anne Klein.

Insight and IntuitionA designer takes a fashion idea and embodies it innew styles. Even the most creative designers, how-ever, disclaim any power to force acceptance of theirstyles. Few have said so more effectively than PaulPoiret, one of the 20th century’s great Parisian cou-turiers. He once told an American audience:

I know you think me a king of fashion. . . . It isa reception which cannot but flatter me and ofwhich I cannot complain. All the same, I mustundeceive you with regard to the powers of aking of fashion. We are not capricious despotssuch as wake up one fine day, decide upon achange in habits, abolish a neckline, or puffout a sleeve. We are neither arbiters nor dicta-tors. Rather we are to be thought of as theblindly obedient servants of woman, who forher part is always enamoured of change and athirst for novelty. It is our role, and our duty,to be on the watch for the moment at whichshe becomes bored with what she is wearing,that we may suggest at the right instant some-thing else which will meet her taste andneeds. It is therefore with a pair of antennaeand not a rod of iron that I come before you,and not as a master that I speak, but as a slave . . . who must divine your innermost thoughts.6

Insight and intuition always play a large part in adesigner’s success. Constant experimentation withnew ideas is a must. As one fashion reaches theexcess that marks its approaching demise, a design-er must have new styles ready and waiting for thepublic.

Sources of Design InspirationWhere does the designer get ideas and inspirationfor new fashion? The answer, of course, is: every-where! Through television, the designer experi-ences all the wonders of the entertainment world.In films, the designer is exposed to the influencesof all the arts and lifestyles throughout the world.


Because consumers are exposed to moviesthrough international distribution, films primetheir audiences to accept new fashions inspired bythe costumes. Museum exhibits, art shows, worldhappenings, expositions, the theater, music, dance,and world travel are all sources of design inspira-tion to fashion designers (see Figure 5.9). The fash-ions of the past are also a rich source of designinspiration.

While always alert to the new and exciting,fashion designers never lose sight of the recentpast. They know that consumers need to antici-pate something new each season. But they alsorecognize that whatever new style is introducedwill have to take its place with what consumersalready have in their wardrobes. No one startswith all new clothes each season. Rarely does arevolutionary new style succeed. Instead, it is theevolutionary new style that so often becomes thebest-selling fashion.

The Manufacturer’s RoleManufacturers would agree with Dwight E. Robin-son that “every market into which the consumer’sfashion sense has insinuated itself is, by that verytoken, subject to [the] common, compelling needfor unceasing change in the styling of its goods.”7

Even in such mundane items as writing paper,the need for change has produced rainbows of pas-tels, brilliant deep shades, and the traditional whitewith dainty or bold prints. Similarly, in basics suchas bedsheets or men’s dress shirts, the once tradi-tional white has yielded to a variety of colors,stripes, and prints. There is scarcely an industryserving consumers today in which the manufactur-er’s success does not depend, in part, on an abilityto attune styling to fashion interest and demand. Acurrent trend is to hire merchandisers who do mar-ket research for the manufacturer, specializing inidentifying the correct customer and his or herneeds and wants.

figure 5.9 Museum exhibits, such as the MET Costume Institute’s Poiret tribute, often inspire new trends.

&ThenNOW

For years, partnerships have existed in the fashion busi-ness. The partner—often part guardian angel and parttherapist—quietly served as the foundation from which

the designer built his or her success.Then, we had Calvin Klein and Barry Schwartz, Yves St. Lau-

rent and Pierce Bergé, and Oscar de la Renta and Ben Shaw.Now, we have Tom Ford and Domenico DeSole, Marc Jacobs

and Robert Duffy, Jimmy Choo and Tamara Mellon, MiucciaPrada and Patrizio Bertelli, and two other very successful part-nerships: brand new Proenza Schouler and the ValentinoGroup, and Nicole Miller and Bud Konheim who have beenpartners for 25 years.

Bud Konheim, cofounder, partner, and CEO of NicoleMiller, has stayed with the plan that he and Nicole Miller cameup with 25 years ago: they did it their way! When they considertheir 25 years together, they are proud of the success they areenjoying. Konheim said he told Nicole it would be his job, “nomatter how small or big we become,” to make the businessprofitable. While Konheim and Miller have built their firm intoan $82 million company and feel they have made their mark,there is a lesson to be learned, according to Konheim: “Thebiggest companies in our industry are marginal. That’s why youalways have to be alert and flexible, because you can lose whatyou have in a very short time.”

Since launching with a label based on their mother’s maidenname in 2002, Jack McCollough and Lazaro Hernandez, now 26years old, have developed one of the hottest names—ProenzaSchouler—on the New Yorkscene. McCollough and Her-nandez were the first recipi-ents of the CFDA/Vogue Fash-ion Fund in 2004, takinghome the cash prize of$200,000.

“Throughout our career,we have had a lot of peopleknocking at the door,” Her-nandez said. “We never founda partner that felt right.” We

were waiting for someone who had a similar visionto what we had and experience in developing abrand.”

Enter Valentino Fashion Group (VFG), whichowns Valentino S.p.A. and holds licensing deals forM Missoni and Marlboro Classics—McColloughand Hernandez thought VFG would make a perfectpartner. VFG’s global expertise in distribution and

logistics would help the boys expandtheir footprint in leather goods andextend its reach in new markets. BothMcCollough and Hernandez agreeVFG has “experience in developingfashion brands and luxury brands at

PartnersWherever We Go,

Whatever We Do,We’re Gonna Go Through It

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Types of ManufacturersIn general, manufacturers of fashion goods can bedivided into five groups, differentiated by stylingand price.

1. High-fashion apparel: This group of designersand firms produce innovative apparel that isvery expensive.

2. Bridge market: This group bridges the pricerange between custom designs and high-quali-ty but less expensive merchandise; hence thename bridge market. Some high-fashiondesigners also produce bridge lines.

3. Better market: This group is usually identified asthe better market because its price range is justbelow that of the bridge lines.

4. Moderate-priced market: This group of firms,usually identified as the moderate-priced mar-ket, sometimes produces originals but usuallyturns out adaptations of styles that have sur-vived the introduction stage and are in the risestage of their fashion life cycle.

5. Budget market: This group of manufacturers,usually identified as the budget market, makesno attempt to offer new or unusual styling.Rather, these firms mass-produce close copiesor adaptations of styles that have proved theiracceptance in higher-priced markets.

In the field of women’s apparel, manufacturersare committed to producing several new lines ayear. A line is an assortment of new designs with adesignated period for delivery to the retailer. Someof these may be new in every sense of the word andothers merely adaptations of currently popularstyles. Producers hope that a few of the designs in agiven line will prove to be “hot”—so precisely instep with demand that their sales will be profitablylarge.

For the most part, the fashion industries aremade up of manufacturers whose ability to antici-pate the public’s response to styles is excellent.Those who do badly in this respect, even for a single

the level we want to be at. At the same time, they don’thave an army of brands that compete against each other,so they have the experience, but the vacancy for a brandlike ours. It’s that mixture that appealed to us.”

Partners, whether brand new or celebrating a 25th silveranniversary together, are something special in the fashionbusiness, where there is constant change and businessesgo in and out of business—but with the right partner,there is no limit to success!

season, usually reap small sales and large losses.Unless they are unusually well financed, they quick-ly find themselves out of business. In the fashionindustry, the survival of the fittest means the sur-vival of those who give the most able assistance inthe birth and growth of fashions that consumerswill buy.

The Retailer’s RoleAlthough retailers do not usually create fashion,they can encourage or retard its progress by thedegree of accuracy with which they anticipate thedemands of their customers. They seek out frommanufacturers styles that they believe are most like-ly to win acceptance from these target groups.

Some large retailers work directly with manufac-turers and firms at the primary level to develop stylesfor exclusive sale at their stores. Thus, retailers suchas the Gap and The Limited can stock only their ownlabels. Others, such as Federated Department Stores,sell private-label merchandise along with nationalbrands. (We examine the practice of product devel-opment by retailers in more detail in Chapter 16.)

Types of RetailersThere are many ways to classify retail firms. Howev-er, when firms are evaluated on the basis of theirleadership positions, they tend to fall into threemain categories.

First, there are firms that are considered fashionleaders (see Figure 5.10, top). They feature newlyintroduced styles that have only limited productionand distribution. These styles, called designer collec-tions, are usually very expensive. Examples of thesefirms include Bergdorf Goodman, Neiman Marcus,and Nordstrom.

A second group, called traditional retailers—by farthe largest in number—features fashions that havecaptured consumer interest in their introductionstage and are in the late rise or early culminationstage of their life cycles (see Figure 5.10, middle).

figure 5.10 The different types of retailers include the fashion leaders, such asNordstrom (top); traditional retailers, such as Macy’s (middle); and mass merchants,such as Wal-Mart (bottom).

These styles are from designers’ bridge collections orfrom better or moderate-priced manufacturers.Since these styles are usually widely produced bythis time, they are most often offered at more mod-erate prices. Examples of these firms include Macy’sand Dillard’s. The distinction between traditionalretailers and fashion leaders is somewhat blurred inthat the fashion leaders may also carry “traditional”merchandise, and the traditional retailers may havedesigner departments.

A third group of retailers, often called mass mer-chants, features widely accepted fashions that arewell into the culmination phase of their life cycles(see Figure 5.10, bottom). Since fashions at this stageof development are usually mass-produced, massmerchants can and do offer fashions at moderate tolow prices. Examples of these firms include JC Pen-ney, Sears, and Kohl’s. At the low end of the massmarket are the discounters, like the off-price DressBarn, for example, which sold more than $1.3 bil-lion in merchandise in 2006 at discounted prices.Other examples include Wal-Mart, Kmart, and Tar-get.

Fashion InfluenceSometimes, because of their constant and intimatecontact with their customers, retailers are so intu-itive or creative that they lead their suppliers inanticipating the styles their customers will accept(see Figure 5.11). Such retailers accelerate the intro-duction and progress of new fashions by persuad-ing manufacturers to produce styles that answer anupcoming need or demand. Because of this ability,retailers are doing increasingly more productdevelopment for their own customers. (This trendis discussed in detail in Chapter 17.)

However, most retailers simply select from whatis offered to them by producers with whom theyhave been successful in the past. There is a constantflow, back and forth, of information about the stylesthat the customer is buying. The systems that pro-ducers and retailers have today for this purpose are

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figure 5.11 Retailers have to stay just a step ahead of their target customers.Retailers must have sufficient stock available when customers are ready to buy a newfashion, but they must also avoid being overstocked when customers’ interest shifts to anew fashion.

figure 5.12 Retailers can monitor the preferences of their customers based onsales and demand.

rapid and accurate, mainly because of the develop-ment of the computer.

Because of these instantly available and accuraterecords, retailers can monitor sudden or gradualchanges in the preferences of their own customers.The variations in what consumers are buying at aparticular store are reflected in what the store buysfrom the manufacturers of fashion merchandise(see Figure 5.12). From these manufacturers comeinformation about customer preferences that flowsin several different directions. One flow is back tothe retail stores to alert them to trends they may nothave noticed themselves.

Retailers can influence fashion by failing to stockstyles that consumers are ready to buy if given theopportunity. Conversely, retailers can make themistake of exposing new styles prematurely. Noamount of retail effort can make customers buystyles in which they have not yet developed interestor in which they have lost interest. The more accu-rately a retailer understands his or her customers’fashion preferences, the more successful the opera-tion will be. And the more successful the operation,the more important the retailer’s fashion influencewill be.

Summary and ReviewThe fashion industry is a major business sector inthe United States and around the world. Itemploys people at four levels: (1) producers ofmaterials, such as natural and manufactured tex-tiles, leather, fur, and materials used in decorativetrimmings; (2) manufacturers of apparel, acces-sories, cosmetics and fragrances, and home fash-ions; (3) fashion retailers; and (4) auxiliary servicesto the other three levels, including marketresearch and forecasting and promotional servic-es. Businesses at all four levels collaborate to cap-ture their share of the market.

Companies compete with others at their level byoffering advantages of price, quality, and innova-tion. The federal government regulates the produc-

tion and sale of fashion goods to ensure safe, func-tional products for consumers and fair marketingpractices among competitors.

Like other businesses, fashion businesses at alllevels may be sole proprietorships, partnerships, orcorporations. Fashion companies grow horizontallyby getting into new markets or vertically by expand-ing into levels beyond the level of their originalbusiness. They may expand internally, acquire ormerge with other companies, or franchise or licensea part of their business. Continuing into the 21stcentury, licensing is an important part of virtuallyevery major designer’s business strategy, and busi-nesses outside the fashion industry license theirnames and logos to apparel producers.

At all levels, fashion business executives must beable to predict the tastes of the consumers whowear and use their merchandise. Depending onlevel, a company must anticipate consumerdemand from six months to more than a year inadvance of the day a new fashion becomes availableat retail.

Trade TalkDefine or briefly explain the following terms:

auxiliary level better marketbridge market budget marketdiversification franchise horizontal growth licensingline mergermoderate-priced market primary levelprofit retail levelroyalty fee secondary levelvertical growth

For Review1. What is the primary objective of all businesses?

Explain your answer.2. Describe the four levels of the fashion business;

give examples.


3. How does the auxiliary level differ from theother levels?

4. Compare the advantages and disadvantages of asole proprietorship and a partnership as a formof business for a fashion retailer.

5. Why do companies seek growth through merg-ers and acquisitions?

6. What are the practical obstacles that limitfashion designers? What additional factorsmust be considered in developing each fash-ion design?

7. List the three types of designers commonlyserving the U.S. fashion industry today. Give theresponsibilities of each.

8. If you were the president of a national chain ofshoe stores, what are five laws and regulationsthat would affect how you do business? Which

of these laws would not affect a small, privatelyowned bridal shop?

9. Differentiate between a license agreement anda franchise.

10. How is a licensed designer name an advantageto the manufacturer? To the consumer? To theretailer?

For Discussion1. What initial decisions must be made by an

individual or group of individuals who plan toform a company with regard to the form ofownership that will be most beneficial to all?

2. What does the statement “You’re only as goodas your last collection” mean in regard to fash-ion designers?


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Documents

dynamics of fashion

fashion retailing

king of fashion

fashion designer

nature of fashion

environment of fashion

movement of fashion

business of fashion