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Fashion Designers Shake Up Industry with New Business Deals

Observer Scene | Monday, April 7, 2008

Styles from top designers worldwide have recently been finding their way to the closets of increasing variety of consumers. This is due to a current trend of big-name retail chains collaborating with high-end designers and design houses in an effort to produce “cheap-chic” clothing collections.

Target has featured the looks of Isaac Mizrahi for years, although Mizrahi will soon end his relationship with the discount chain to become the creative director for Liz Claiborne. In a somewhat reversed move, Dana Buchman’s looks will move from upscale department stores such as Neiman Marcus and Saks Fifth Avenue to join Vera Wang’s by selling a line at budget-conscious Kohl’s stores.

These pairings have broken the standard view in the fashion world that designer names are reserved for department stores and have no place at discount retailers. When Mizrahi and Target forged their partnership in 2003, Mizrahi’s career did not suffer. Unexpectedly, the designer had an estimated $300 million a year success on his hands.

H&M recently announced its newest design partner, Comme des Garçons, a Japanese design house founded, solely owned and headed by Rei Kawakubo. The label, whose name is French for “like boys,” is known for its avant-garde aesthetic. Its expected creations for this project include womenswear, menswear, childrenswear, accessories and a unisex fragrance. The line will be available exclusively at H&M, launching first in Tokyo in November, and being rolled out worldwide within a few days.

Past guest designers for the affordable Swedish retailer include Karl Lagerfeld, Stella McCartney, Viktor & Rolf and Roberto Cavalli. Its newest pairing with Commes des Garçons is expected to draw a more sophisticated, fashion-savvy following.

In an interview with “British Vogue,” Kawakubo explained her reasoning for working with the inexpensive retailer.

“I have always been interested in the balance between creation and business. It is a dilemma, although for me creation has always been the first priority. It is a fascinating challenge to work with H&M since it is a chance to take the dilemma to its extreme, and try to solve it,” she told the magazine.

Kawakubo’s thoughts speak to recent issues in the fashion world of balancing creative integrity with the financial bottom line. Established companies that are seeking to revitalize their look also need to find leaders for their houses who will design enough commercially appealing products to keep profits up.

This strategic dilemma has lead to a frequent turnover in some design houses, presenting cracks in the plan of brand reinvention that has dominated the industry in the past decade. Experts theorize that customers are not given enough time to embrace the changes in their favorite brands due to the rapid replacements in creative direction. Yves Saint Laurent, Lanvin and Burberry avoided creating confusion in their consumer bases by implementing clever management moves to allow their changes to be absorbed by the public.

Not all design houses or designers are as lucky. Lars Nilsson was released from his position at Bill Blass in 2003 and again this past February from his very brief stint with Gianfranco Ferré. Nilsson is infamous in the fashion world for refusing to compromise his designs, instead choosing to argue with management over what some would see as small details but what Nilsson views as critical to his creations.

Betsy Pearce, a strategy consultant for luxury brands, explained the corporate side of the problem to The New York Times.

“What kind of business would rationalize the creation of an entire product line four times a year and then produce it on spec?” she told the Times.

Pearce believes that more brands will soon experience shakeouts if they do not focus on the bottom line.

With this becoming the trend, Nilsson’s situation is not unique. Recent replacements have happened again at Bill Blass, as well as at Chloé, Anne Klein and Paco Rabanne, which left designer Patrick Robinson free to create upcoming looks for the Gap.

With these rapid changes for retailers and designers, the fashion industry is not one that will be slowing its dynamic anytime soon.