Fashion Houses Don’t Make Money From Clothing : Neither Should You

Even the biggest fashion brands don’t make money from clothing. Surprised?

You shouldn’t be.

The reality is that all the large fashion houses make all of their profit from accessories such as sunglasses, perfume and handbags. Clothing and accessories have reversed their relationship roles: apparel is something you “have” to have, but it’s not most brand’s bread and butter anymore.

Of course, clothing remains important. Clothing is what sets a brand apart from its competitors and lets them make a definitive statement about who they are in the market. But due to high development costs, it’s very difficult to make money from clothing unless you’re a luxury brand like Burberry — and even then, their margins are much larger on their scarves than their famous trenches. After all, accessories are less expensive to develop and manufacture — and their lower price points mean more accessibility to consumers, resulting in more volume of sales.

So if large fashion houses can’t make much money off of apparel, smaller brands shouldn’t try to build their business model around it. Especially in light of the massive opportunity presented by accessories: so few brands are servicing their audience’s growing desire for on-trend, cool accessories, and there’s a lot of market share waiting for brands who truly accessorize first. In reality, every brand should be thinking of accessories as:

• Low-price gateways into your brand. A customer may have just met your brand — you don’t want them to leave because of the higher price points of your apparel. A well-accessorized store or website gives them accessible price points that allow a new customer to start a relationship with your brand and eventually upgrade to higher-priced items
• Brand statement pieces. For instance, if your brand is focused around empowerment, then yoga mats, crystals, and natural oil fragrances can naturally reinforce your message in ways that are difficult for you to do with apparel
• Augmentations to apparel offerings. Nobody should walk out of your store or leave your website without a branded belt, bag or at least a pin — if they’ve bought in to a high-priced piece of clothing, they already love your brand. Not letting them express it is leaving money on the table.

The bottom line is this: with a strong accessories strategy, your brand will drive more top line revenue and be more profitable. Of course, there’s no better manufacturing partner to do that with than THE/STUDIO.