Fashion has become a kind of loss leader, the motor that drives the sales of other products, said Godfrey Deeny of Fashion Wire Daily yesterday at a public talk in Dublin titled "Fashion, Power and Money".
European editor of the online news service, the Paris-based Irish commentator was a guest speaker at Dublin Fashion Week at the Fitzwilliam Hotel. Mr Deeny, who gives courses in Moscow University at the graduate business school, spoke about the phenomenon of designers as superstars and taste-makers and how the business internationally has changed. "Designers used to build their own empires. Now the vast majority work for other people, like John Galliano for Dior, Marc Jacobs for Vuitton and Karl Lagerfeld for Chanel. The real problem now is that there is not a new generation coming along and so much competition to build a brand. There are fashion schools all over the world and thousands of graduates, so the ability to make yourself heard is very difficult and the ability to build a brand more complicated."
He pointed out that no significant designer had emerged in the Italian marketplace since Dolce & Gabbana.
Designers working for big houses are called creative directors "and they are working 78-hour weeks - it's very demanding. How many of them will become household names?"
Success, however, brings substantial rewards, he said. "You will be paid to go to exotic places to do research and the lifestyle can be fantastic. Galliano, for example, went to Egypt recently and hired a Montgolfier balloon to tour the pyramids. It's a nice way to do your homework."
The fashion business is growing internationally and luxury distribution becoming more concentrated, he said, with brands like LVMH (Louis Vuitton Moët Hennessy)number one in the Paris Bourse. Fashion business turnover, however, can be misleading because much of it is tied up with licensing and royalty percentages on related products. Perfume is the lowest, at 3 per cent, while bags account for 7-9 per cent, and sunglasses 9 per cent.
"It is hard to make money out of high fashion, but if you hit it in any of the other areas you can make a lot. Jean Paul Gaultier, for example, has a perfume licence with Shiseido, turning over more than $150 million [ €117 million] annually. He must be getting 3 per cent, which makes him clear at least $3 million a year, far more than he makes for clothes."
Dublin Fashion Week ends today with a lecture by Stephen Sealy of Brown Thomas at 12.30pm in the Fitzwilliam Hotel. Tickets are €5 at the door.