Two Minds Are Better Than One
Collaborations between fashion designers and High Street retailers bring benefits to both.
Fashion designers are collaborating with retailers to bring exclusive brands to High Street.
It started with Chanel designer Karl Lagerfeld in 2004 bringing out a clothing collection with retailer H&M.
The collaboration was a success, and retailers Target, Payless, and Macy’s have since collaborated with designers Mary Katranzou, David Koma, Christopher Kane, amongst others.
Designers and retailers continue to collaborate as both parties benefit from the partnership.
Advantages for Retailers
The release of a new collection by a designer-retailer collaboration creates a lot of buzz which brings increased foot traffic into the retailer’s stores. This increases sales revenue for the retailer. Also, luxury consumers of the designer’s brand can be drawn into the retailer’s store, expanding the retailer’s consumer base.
By attaching a designer’s name to a collection, the retailer creates an opportunity to charge higher prices, leading to higher revenues at higher margins; giving increased profits.
The retailer can also differentiate itself from others carrying the same designer label, with the collection being only available in the retailer’s stores: giving exclusivity.
H&M’s collaboration with Matthew Williamson shows the advantages that retailers gain from collaborations. This collaboration increased H&M’s revenues and assisted them in breaking into the luxury brand mad Chinese market.
Chen Jie, reporting in the China Daily (September 2009) wrote that although Matthew Williamson was not as well known in China as H&M’s previous collaborators, such as Karl Lagerfeld, Stella McCartney, and Madonna. When his first women’s collection hit Chinese H&M stores, shoppers raced to grab a piece of chic. Jie wrote:
“Hordes of women in Shanghai cleared the shelves within 10 minutes. Beijing was the same.”
Advantages for Designers
Designers also benefit. Three of the primary benefits are the opportunity to raise awareness of their brand, reach new market segments and new geographical territories.
Collaborating with retailers also gives designers an opportunity to experiment with category extensions, appeal to younger consumers, and provide an injection of cash through a spike in sales.
A collaboration with a retailer is a less risky and less costly alternative than using their own retail network for a designer who wishes to experiment with brand extensions.
There have been several high profile designers who have seen these benefits manifest from their collaboration with retailers:
· At the 2011 FT Business of Luxury Summit Stella McCartney CEO Frederick Lukoff said that collaborations with Target in Australia, and C&A in Brazil had helped the brand to penetrate new markets in those countries;
· Jimmy Choo’s collaboration with H&M enabled the well-known shoe designer to introduce a clothing line;
· As well as allowing Matthew Williamson penetrating the Chinese market with his collaboration with H&M, he was able to introduce a line of commercial menswear;
· And Stella McCartney’s collaboration with GAP, allowed her to introduce a childrenswear line.
Then there is the cash that designers get for their collaborative collections. The fees received can be substantial. According to Dhani Mau writing for Fashionista.com (Nov 18, 2011), Karl Lagerfeld and Stella McCartney are reported to have received $1m for each of their H&M collections.
Arguments Against Collaborating
Not everyone is keen to get on the board the collaboration wagon. There are several strong arguments against doing so.
There is the risk of alienating the designer brands core luxury customers due to a perception that the luxury brand is cheapened by allowing access by mainstream consumers.
Prada USA Executive Vice President of Marketing and Advertising Randy Kabat has said that roughly 50% of the company’s sales come from just 5% of its customers. If Prada were to alienate this core 5%, it would substantially impact revenues.
However, researchers at Uppsala University found that the consumer perception of luxury designer brands after collaboration was positive, with no negative backlash from luxury consumers.
Nevertheless, some brands keep well away from any collaboration with retailers. According to marketing expert Mark Ritson, Louis Vuitton, Hermes, Gucci, Chanel, Fendi, and Burberry have never had a high street collaboration.
Kering (formerly PPR) the holding company of luxury goods brands — Yves Saint Laurent, Gucci, and Bottega Veneta, Balenciaga have never had a collaboration. Not one single LVMH fashion brand has had a collaboration.
Perhaps we’ll leave the final word to Miuccia Prada:
“I have never even considered [fast fashion] and I’ve explained why. It’s because I don’t like the idea of a bad copy of what one does for the main brand. If I had an ingenious idea to do fashion that costs less but that wasn’t a bad copy of something else, with completely different criteria and ways of doing things, I would do it. Also for myself, it would be an ingenious idea. For now, what I see more or less is the bad copy. Also with clothes that cost little, you need to ask why they cost so little. Because no one ever asks themselves that.”
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