Thursday, 31 January 2013

Fast Fashion - Peter Schonbeck guest lecture

As you would expect from a leading MBA programme, at Royal Holloway we like to expose the student group to a variety of external speakers where ever possible, in what is frankly speaking a very packed and demanding schedule.  Thanks to our leading research reputation and long history as a place for thought leadership we are lucky to boast a rich and wide variety of guests who are keen to share and learn from interaction with RHUL staff and students.
A strong supporter of the MBA programme in recent years has been Peter Schonbeck who brings over 25 years work experience in the fashion industry, which includes senior positions with global brands such as Levi Strauss, Timberland, Tommy Hilfiger and Barbour. 

During Peter's guest lecture slot he covered the changes in the nature of the industry, with examples from high fashion companies such as Burberry, Levi Strauss, VF, Superdry, Inditex and Uni Qlo.  The sector that has been remarkable for experiencing strong growth, despite a challenging economic climate in the west since 2008, thanks to impressive sales in Asia, and the emergence of a cadre of people keen to show their wealth and status using luxury fashion clothing and accessories.  Many students find this phenomenon very intersting and it is a popular dissertation topic. 

Peter introduced the concept of fast fashion using the example of the highly successful Spanish fashion brand Zara, part of the larger Inditex group, which describes itself on its website (2013) as "One of the world's largest fashion retailers," with "eight store formats -Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe - boasting 5,887 stores in 87 markets."  The fast fashion model breaks away from the traditional seasonal collections model by offering an ever evolving range of clothing with monthly updates of lines, seeking to reflect the latest innovations.  Staple classics (a little black dress or navy polo) are bulk manufactured with long order lead times and shipped using the lowest cost option to offer consumers strong value for money options.  Added to these are shorter runs of quick turn over items that might reflect an "in" colour or design that might be considered temporarily as high fashion, which are able to command the price premium their local (quicker) European manufacturing process carries.

Steve McQueen TM Barbour Waxed Jacket
The market push towards fast fashion and premium brands sees the middle market squeezed, according to Peter.  This seems to fit with Porter's concept of generic strategies, which identifyies just three key strategic options; low cost (fast fashion), differentiated (luxury) and focus.  Traditional brands such as privately controlled Barbour, who have historically benefitted from a conservative position in the outdoor clothing market, might be seen as a good example of a focus brand. 

Historically unencumbered by shareholder driven requirements to grow revenues and profits, the Barbour brand has been happy operating with relatively stable sales to traditional market segments. However, this is now changing.  Inspired by uncovering worn wax jackets from an elite forces veteran found in the archives and in good marketing style re-cycling an old idea but giving it a contemporary twist, conservative Barbour launched a new line recognising the iconic movie legend Steve McQueen.  As a keen biker, McQueen chose to wear a four pocket, belted variant of the traditional wax jacket, a design that pushes rain away from the legs whilst allowing freedom of movement.  The further development of quilted jackets and lighter summer apparel enabled Barbour to address the seasonality in its business and open into warmer climate markets such as Italy and Japan. 

One of the dangers Barbour has clearly considered is the risk attached to moving away from being an iconic, timeless brand and the potential roller coaster ride that can see fashion brands experience on a fast ride that includes twists and turns, highs and lows, and the danger of been seen as being out of fashion, rather than transcending it as Barbour did successfully for many years.