When haute couture demigod Karl Lagerfeld introduced a clothing collection for H&M in November 2004, high fashion folks were wondering whether he had abandoned his high-end clientele in favour of the masses. Since Lagerfeld's tag team with the Swedish retailer, the world has seen a torrent of masstige products and cross-discipline collaborations.
H&M has since collaborated with the likes of Viktor & Rolf, Roberto Cavalli, Stella McCartney, Lanvin, Sonia Rykiel and, most recently, Versace. However, Lagerfeld's collection was the one that impacted H&M's financials most positively (sales went up by 24% that November compared to the previous year), selling out in approximately two days. The high profile collaboration offered main street consumers an aura of exclusivity and access to affordable luxury, with products priced at approximately 15% of "standard" Chanel designs.
In order to understand why H&M courted super premium brands to begin with, it is necessary to understand H&M's financial considerations. The retailer wanted to maintain the growth that it was enjoying in the years prior to 2004, but knew that international expansion and high sales couldn't go on forever. H&M's new strategy was to supplement its regular clothing lines with high profile collaborations as a means to boost revenues, since designer collaborations called for higher prices. H&M also viewed collaborations with premium brands as a way to enter new markets, for example, Matthew Williamson (the most successful collaboration after Lagerfeld) to enter the Chinese market.
Karl Lagerfeld for H&M
Whatever the reasons that premium designers choose for collaborations and diffusion lines, one thing appears certain. Developing product lines that are aimed at different (read: lower) price points and wider audiences will help grow revenue in the fashion design industry to as much as $1.2 billion over the next five years to 2016, according to IBISWorld, the largest provider of industry reports in the United States. As the demand returns to its pre-recessionary periods, coupled with the developing markets' growing disposable incomes, fashion designers and retailers will be laughing all the way to the bank.
Designers and retailers may be cashing in, but could it be that we've come to a point where collaborations now negatively affect brand value? While benefits to mass retailers like H&M are obvious (profits and the admiration gained by the mass markets), win-win collaborations cannot continue forever and there are growing risks on the designer side.
Versace for H&M
There have been humorous examples of collaboration hiccups. Lagerfeld was critical of the H&M collaboration on two accounts: first, he accused the Swedish retailer of not producing and distributing a sufficient number of his designs. And secondly, he objected to H&M selling pieces in larger sizes, stating that they were designed for "slender and slim people". No comment.
Hilarity aside, there is a real risk of cutting into a premium brand's profit margins as consumers opt for lower-priced apparel and accessories and, by extension, the cutting into the creation of high fashion itself. And isn't the point of high fashion to rouse the high street? To not only infuse awareness of a designer's haute art, but to guide the racks?
The irony of collaborations churning out limited edition items is that the items and brands behind them have become so ubiquitous that their exclusivity is quickly evaporating. Earlier this week, newspapers reported that Versace's entire H&M collection sold out within 24 hours of launch. Despite the promise of affordable luxury and exclusivity, I felt relieved that all of the pieces were gone. The Versace collaboration seemed like a flash sample sale of imitation Versace designs, a way for Donatella to make a quick buck, fly around the fashion capitals and to throw a couple of parties. Rather than thinking "Versace!", it made me wonder if brands are shamelessly using H&M for extra publicity and fast cash. It also made me dread upcoming collaborations.
At one time, it made sense to collaborate. For Lagerfeld, he was the first out of the block, and for others, it has been an effective stop gap to battle the recession. But with changing circumstances must come changing strategies for designers. Prestigious brands are in danger of losing the best thing about their brands, and that is the high fashion itself.
Today I read rumors about a potential Tom Ford and H&M collaboration and my first thought was, "Oh no, please no!" Surely, that's not a healthy response for neither H&M, nor Tom Ford.
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