The fashion industry is a utopia where money rains down on streets paved
with gold; where the citizens are bedecked in the finest fabrics and
jewelry known to man. They live in extravagant homes surrounded by
diamonds that grow from trees. This utopia is such an amazing place that
words cannot describe it. Well, okay maybe I'm exaggerating a bit. But
when you see the staggering amounts of money that are made in the
fashion industry annually, it is hard to not compare the industry to a
The fashion industry seems to attract money like iron filings to a
magnet. Clothing lines make millions of dollars each year, some
well-established lines and designers even make billions of dollars. Now
the fourth largest industry in the world, the fashion industry brings in
$4 billion a year and includes the revenues from old established
companies and a host of new clothing lines introduced by the urban
Contemporary Fashion History at a Glance
Initially Contemporary fashion as we know it was run by such top couture
companies and designers as Channel, Calvin Klein, Karl Lagerfeld Gloria
Vanderbilt, Dianne VonFurstenberg, Ralph Lauren, and Liz Claiborne to
name a few. These and others such as Donna Karen, Guess? and Tommy
Hilfiger bought couture style to the ready-to-wear market. Today, new
clothing lines have made their mark upon the fashion industry, and
include the wave of urban clothiers like Phat Farm, Sean John, Rocawear,
and at one-time the mega clothing company FUBU.
Given the laundry list of clothing companies and fashion designers, one
would think the market is over saturated. But quite the contrary is
true. Like an elastic waistband, the market has simply expanded to
accommodate each new clothing line, many of which have been able to
capture a significant portion of market share to be rewarded with
millions of dollars for their creativity, fashion sense and work
efforts. Simply put, if you are the owner of a hot clothing line,
chances are, you're rich!
Tommy Hilfiger should be considered the poster child for marketing
innovations. He was the first traditional clothing designer to
capitalize on the Hip Hop world. From 1990 to 1993 Tommy Hilfiger was
only bringing in $25 million a year. But that all changed in 1994 after
a performance by Hilfiger-clad Snoop Doggy Dog performed on NBC's
Saturday Night Live. After the performance Tommy's sales quickly jumped
to $67 million. Since then, Hilfiger's sales have continued to claim
nearly $900 million. In 2002 Tommy Hilfiger reported sales of up to $1.9
billion. The company has remained around the billion-dollar mark. In
2006 Apax Partners, a global private equity investment group bought
Tommy Hilfiger, Corp. for a reported $1.6 billion along with the
agreement that Hilfiger would stay on to run the company.
Ralph Lauren, designer of the POLO brand is synonymous with the word
fashion. Since the 1980s Ralph Lauren has been a dominating force in the
fashion industry. His sales consistently hit record numbers and in 2006
for the U.S. market reached $3.75 billion. Projections for fiscal year
2007 are anticipated to reach $4.5 billion.
The company Guess?, by designer Maurice Marciano is yet another example
of clothing line that has remained on top. Since 1981, the brand has
dressed infants to senior citizens. A crossover brand, it has earned
sales from both the urban and suburban markets, and in 2006 the company
reported profits of $1.2 billion. Both Chairman Maurice Marciano, and
co-chairman and CEO Paul Marciano command million-dollar salaries in
their leadership positions in the company.
The men of fashion are not the only ones commanding high salaries and
huge profits. In 2006 Liz Claiborne Inc, reported sales of $5 billion.
While Liz Claiborne unfortunately died on June 27, 2007, her legacy
lives on as does the testament to the longevity of the Liz Clairborne
A self-taught fashion designer, Claiborne founded her company with her
husband Art Ortenberg, Leonard Boxer, Jerome Chazen in 1976. Within a
decade, the clothing company became a billion-dollar business. That type
of growth is a testament to just how great and rewarding the world of
fashion can be.
Another of the many top women in fashion is Donna Karen, founder of DKNY
(Dona Karen New York). The DKNY name commands great respect in the
fashion world and in 2006, the privately owned company reported earnings
of $1.2 billion. The company's 2007 sale projections are expected to
stay steady at around the 1.2 billion-dollar mark. It should be noted
that some companies partner with others to achieve their high financial
earnings. For example, DKNY Jeans and DKNY Active are partnered brands
of Liz Clairborne, Inc.
In 1967, fashion icon Calvin Klein graced the industry with his
presence. Since then, Calvin Klein has become a household name. Another
designer to use apt marketing strategy the Calvin Klein Company has also
hit the billion-dollar mark. In 1980, Klein pushed the envelope with his
Jeans ad where a young Brooke Shields stated, "Nothing comes between me
and my Calvins." Since then, the sentiment has been true for many. By
1996 Calvin Klein company surpassed $3 billion in sales worldwide, and
by fiscal-year 2006, its subsidiary, Calvin Klein Jeans Wear Co., hit
$90 million in sales. Just as Hilfiger sold his company to Apex, Calvin
Klein sold his brand to the Phillips-Van Heusen Corporation, the largest
shirt maker in the United States. According to industry financial
reports, the Calvin Klein Company was sold for $400 million dollars in
cash and $30 million in stocks.
The fashion industry is not limited to clothing. It also includes
accessories and shoes. The cosmetics industry is different yet closely
related market that cannot be overlooked when discussing fashion. Many
designers, such as Chanel for example, branch their brands out to
include cosmetic and fragrance lines, and for many consumers, cosmetics
are just as important to their overall sense of fashion and style as
clothing, shoes and accessories. The Est
e Lauder Company has held on to
its market share for quite some time. Est
e Lauder sales for fiscal year
2007 were reported at $7 billion dollars. For the year, that figure
breaks down to approximately $19.2 million per day. The company's sales
were up 9 percent from its recorded 2006 earnings of $6.46 billion,
which shows just how much the cosmetics industry parallels the fashion
The fashion industry is a best-kept secret. There is so much money to
be made is this business that it's unreal! If you have a good name and
some really hot fashion designs along with the knowledge to bring it to
the market and keep it there, chances are good you will do quite well
for yourself! In the fashion industry the potential is always present
for a clothing line to make millions or even hundreds of millions of
dollars. This business is unreal and that's why it is a best-kept
Jay Arrington co-owner of www.startingaclothingline.com
New Kids on the Block take the Industry by Storm
Talented, new urban designers have imposed their will on the fashion
industry with the same force, if not a greater one, as their fashion
predecessors did. They have opened new doors to an industry that was
difficult to break into. This phenomenon started in the early 1990s with
the former companies Cross Color clothing and fashion designer Karl Kani.
While they are no longer active companies, they were the trailblazers
for FUBU, Phat Farm and many other clothing designers.
Cross Colors was founded by Carl Jones in the early '90s. Cross Colors.
Upon its arrival on the market, the company was so hot, that they had
major problems filling orders. With $130 in pre-paid orders, they could
only ship $89 million. The company grew at an uncontrollable rate. In
its first year of business, Cross Colors made $15 million, and by 1992
it made $89 million. These figures are staggering and show the kind of
market share that the new, urban market was able to capture easily.
Designer Karl Kani started his career with Cross Colors (Threads 4
Life), but left the company in 1994 to start his own label. In its first
year the Karl Kani label had $22 million in sales, ranking him No. 38 on
the Black Enterprise Industrial/Service 100 list. In the following year,
Kani had $59 million in sales
a 37 percent increase over the previous
year. The 1995 numbers earned him a leap from No. 38 to No. 25 on the
Black Enterprise Industrial/Service 100 list. After such an impressive
first two years, the line lost its market share, but Kani managed to
reinvent himself and the company. Often called "the godfather of urban
fashion," in 2002, Kani returned with the introduction of "Life" a new
clothing line that made $25 million in its first year. Achieving success
where Hilfiger failed, Kani partnered directly with Hip Hop artists,
rather than just having them wear his product.
For Us By Us, (FUBU) was an inspiring slogan that motivated four friends
from Queens, New York to follow their dream. According to legend the
guys from FUBU went to the Magic Show in Las Vegas. Magic is the biggest
clothing convention in America, and at the convention, buyers were so
impressed with their designs that FUBU took $1 million in orders from
stores across the country. Lacking the capital to fill the orders, they
placed an ad in the newspaper for investors. It read: "One million
dollars in orders. Need investors." The ad attracted the attention of
the conglomerate Korean company Samsung, which made an investment in the
company and helped FUBU fill the orders. Since then, FUBU has been a
FUBU went on to take the fashion industry by storm. They went from
selling hats on the street corners of New York to selling full
collections in stores all over the world. Their operation moved from a
basement in Queens to the entire 66th floor of the Empire State
Building. In 1997 FUBU made $75 million, in 1998 they made $200 million;
in 1999, $ 350 million and by 2001 their sales reached $380 million.
Overall, the company's worth grew to $450 million.
While FUBU does not currently have the same market strength that they
had a few years ago, last year, they still managed to make $12.1 million
from international sales. It is this ability to capture both domestic
and international markets that shows the versatility of the fashion
With respect to the urban market, Carl Jones of Cross Colors invented
it, Karl Kani solidified it and FUBU refined it!
Jay Arrington co-owner of www.startingaclothingline.com
The classic urban brand, Phat Farm, created by the godfather of hip hop,
Russell Simmons is another line that took the fashion industry by storm.
While the company did have its ups and downs, including going bankrupt,
with the perseverance and business savvy of Simmons, the company has
thrived. A resilient entrepreneur, Simmons pulled the company out of
bankruptcy and went on to make millions of dollars. He started
developing his collection and product line slowly. In 2000 Phat Farm
made $120 million dollars; by 2001 it made $200 million. In 2003
Russell Simmons reported earnings for Phat Farm of $350 million. Taking
a cue from other successful designers, Russell launched the subsidiary
Baby Phat line in 2000. In its first year Baby Phat made $10 million. A
year later, Baby Phat tripled its sales. In the last seven years, Baby
Phat's earnings have continued to climb the chart and in 2006, reached
$100 million in earnings. Phat Farm kids was also launched by Simmons,
and made $15 million in 2000 and $25 million in 2001. The entire Phat
Fashion line brought in $659 million from licensing deals and in 2006,
the Phat Farm label had around $740 million in retail sales alone
overall, the entire Phat Fashion Label made approximately $2 billion in
2006. Without sound business practices however, the company might have
suffered the same fate as many other new companies.
In early 2004, Russell Simmons sold Phat Fashions to The Kellwood
Company for $140 million in cash. He stuck around for two years to make
sure that the company stayed on track and judging by the numbers
reported above it did. Russell, job well done!
You see, most people don't understand the fashion business. You start a
brand and you make it hot! And then you start licensing out the name to
other companies to create more products and that helps to build your
brand and your company. That's how you get to the billion-dollar mark.
And when you do licensing deals, others do the work and you get a cut of
the action. Why? Because it's your name! I love this business!
Jay Arrington co-owner of www.startingaclothingline.com
Rocawear was founded by the Shawn "Jay Z" Carter, Damon Dash and Kareem
Burkes in 1999. Since its inception, the company has been a force in the
fashion world, bringing in an average $300 million annually. As Jay Z
states in the lyrics of his song The Watcher,
I had it laid out before
you knew what a plan was $300 million later now y
all understand us.
Rocawear's annual sales are currently up to a staggering $700 million
making it one of the highest earning clothing lines in the industry.
Carter recently reported selling Rocawear to the Iconix Brand Group,
Inc. for $204 million in cash and $35 million in stocks. Two years
before the sale, Damon Dash sold his stake in the company for $22.5
million in cash and controlling interest of several spin-off apparel and
fashion brands. His business manager estimated the total value of the
deal to be approximately $30 million.
Another Hip Hop star to cross over into the fashion business is Sean
Combs. Known during his musical career by several different names, he
has made his mark on fashion with the Sean John line. As Sean Combs
would say, "It's not a brand, it's a lifestyle." And apparently it is a
lifestyle that the world is buying. In the first year of Sean John's
full arrival, the company received great reviews and quickly shot past
$100 million in sales. In 2002 Sean John brought in $325 million; in
2003, $450 million. In the short time that Sean John has been on the
market, the company has consistently maintained an average of $400
million a year. With the upcoming introduction of his women's line,
earnings in the billions can only be expected in a short time as well.
Comb's has also signed a licensing deal with power house Est
e Lauder to
distribute his fragrance worldwide. The fashion business is not local or
regional, it is global, and those who really succeed in the business for
years and years know how to capture a global market share.
You know one of the reasons why I always praise this industry is
because you can be a self-taught clothing designer and still make
millions or even billions of dollars! Tommy Hilfiger, Liz Claiborne,
Karl Kani, Christian Dior, Yigal Azrouel are all self-taught, but a lot
of people don't know that.
Michael Harper co-creator of www.digitalfashionpro.com
Miskeen is a new company that in 2002 started out making t-shirts into
wearable art canvases. They created original designs on each shirt and
in the first year Miskeen made $502,000. In 2003 they made $4 million
and in 2006 the company increased sales to $12.5 million! Like with many
other companies, Miskeen could go far, so I will be keeping my eye on
them. With sound business practices along with great designs and good
marketing strategies, they could be another FUBU or Phat Farm. And who
knows? Maybe one of you will be the next hot clothing designer that
catches the public eye. Until then, think fashion and you will always
look your best!
Sources: High Beam.com, Answer.com, Allbusiness.com Yahoo.com/finance,
Black Enterprise, Selectory Business Database, startingaclothingline.com,
Forbes.com, CNN.com, findarticles.com and staff.
Special thanks to Jay Arrington of
Design Clothes 2008
Article provided to Apparel Search by Nigel