The fashion industry is ever booming, where each season brings about new trends and evolving style. It’s difficult enough keeping up with the latest fashion trends, but what’s even more difficult is acquiring the look without breaking the bank.
Major luxurious brands feel the pinch now more than even when affordability comes into the equation. Consumers are living more sparingly due to the uncertainty of global finances. Markets are constantly unstable and this results in it being challenging for the public to splurge. With that being said, high-end brands are just not as profitable as they were a decade ago.
Due to unstable finances, young shoppers are opting to have quantity of quality. A typical example would be comparing an entry level Balmain jeans that would cost nothing under $470 while on the other hand an entry level H&M jeans cost as little as $11 and retain a very similar look. The drastic difference in price allows buyers more financial freedom to buy more for less. This is one of the main reasons why high-end brands are feeling the pressure. It’s practically impossible competing with regular brands that bring in more ideas and furthermore more revenue.
A number of high-end brands have closed stores worldwide due to being volatile in this market. Michael Kors is amongst these brands that are experiencing the kick in the market. In a website post last May the company released their annual figures which have decreased in both profit and revenue. Revenue has stooped to $1.06 billion from $1.20 billion which is a decrease of 11.2%! Gross profits took a major knock as well making Michael Kors less profitable than previous years. Other such high-end stores that took a step further by closing stores were Bebe (180 stores closed) and True Religion Jeans (27 stores closed).
Regular international brands like Zara, H&M and Forever 21 are reaping the benefits of sales due to the fact that new stocks arrive almost weekly instead of seasonally. Majority of items are priced well and appeal to people of all classes. Due to this fact consumers have the ability to be more flexible and efficient in obtaining the latest trends. All items and garments are great quality and thus worth every penny.
This cycle altogether makes it quite strenuous for luxury brands to compete with regular brands. The quality is there, but prices and variety are strictly limited making it a big problem. New pieces are usually released seasonally at over the top prices. Plenty of high-end shoppers have admitted to buying second-hand luxury items for a fraction of the retail price from private sellers. This gives those who want to own luxury high-end products plenty of opportunities to own certain things without paying the full price.
Another major challenge high-end brands face is replica items being sold across the globe. Many buyers have said that they would rather have a replica item that looks the exact same as that of an expensive brand without having the hassle of paying exorbitant amounts. This is an issue all luxury brands like Louis Vuitton, Channel and Dior face. The unfortunate reality is that nothing can be done about these replica goods being sold because these brands wouldn’t know where to begin to stop the production of them.
With regards to marketing, it should be noted that regular brands advertise a lot more than luxury brands. Most high-end brands don’t find the need to advertise or market their items as much as regular, everyday brands. High-end brands rarely have sales and even when they do, items are still crazy expensive! On the contrary, normal brands are at a great advantage because they often have unbeatable deals that appeal to everyone, making it once again an extremely competitive market.
In the current fashion industry luxury brands need to realize now more than ever that the progressive global changes affect the buyer. New ideas and innovations need to be implemented as the market gets tighter with new competition popping up daily. People are evolving and becoming more practical and fashion is no more about brands but about practicality.