Substance of the Fashion Industry Fashion Marketing Chapter 4

Channel of Distribution Def.: the route that products take from the original source, through the production process, and sales to the ultimate user. 2 channels: Soft Goods Chain Four Groups Approach

Fashion merchandisers should understand the processes, timing, and practices of the individual segments or groups within the overall fashion industry

The Soft Goods Chain Also, called textile/apparel pipeline The channel of distribution for apparel and home decorating textiles. 3 main Segments: Textile Apparel Retail

Textiles Fibers: very thin strands that are the beginning of textiles Yarns: continuous strands of textile fibers that are processed into fabrics Fabrics: long pieces of cloth Greige goods: fabrics in an unfinished state

Apparel Produces finished garments and accessories Steps in the Apparel Segment The apparel must be designed Designing is the process of creating new versions of garments, accessories, or other items Design ideas move fashion forward by creating change

Apparel Steps in the Apparel Segment After apparel is designed it must be manufactured Almost all are mass-produced in factories They are cut out of fabrics in large numbers and sewn along assembly lines Apparel sales involves selling the manufactured garments in large quantities to retail stores

Apparel Resellers – wholesalers who serve to distribute goods between producers and retailers or users

Retail Segment Retailing is the selling of merchandise directly to customers Retailers buy finished goods in large amounts from the apparel segment that precedes them in the pipeline Retailers pay a wholesale price for this quantity buying of finished products Retailers put these items out “on the floor” of their stores for sale at a retail prices, which is higher than the wholesale purchase price

Retail Segment Retailers pay a wholesale price for this quantity buying of finished products Retailers put these items out “on the floor” of their stores for sale at a retail prices, which is higher than the wholesale purchase price The markup covers cost of heat, lights, taxes, sales help, and other expenses Retailers do single item selling of garments, accessories, and other goods to consumers

The Four Groups Approach Separates the fashion industry into 4 main groups of business: Primary group (raw materials: textiles, leathers, furs) Secondary group (manufacturing: garments, accessories) Retail group (final distribution; stores catalogs, internet, TV sales) Auxiliary group (fashion-related; trade associations, publications, and consultants)

Vertical Integration The combining of 2 or more steps of the pipelines within one company and under one management. Example: Textile mills produces their own yarn, fabrics and perform the finishing process.

Commodity, Fashion, and Seasonal Goods Two main categories of merchandise Commodity products Staple goods…hardly ever change in design and are in constant demand…sales are predictable Examples: cotton/polyester blend fabric, and men’s white business shirts and dark socks

Commodity, Fashion, and Seasonal Goods Two main categories of merchandise Fashion products Always changing Last year’s model or style cannot be sold this year because it is not in demand Difficult to predict what the demand will be Wrong decisions result in huge financial losses Seasonal products Change in popularity or demand with the seasons of the year