Men's luxury ready to wear clothes in France

Résumé du document

The Haute Couture and the luxury ready to wear clothes account for a worldwide turnover of €20 billion. This activity is characterized by a multiplicity of actors and strategies.

The weight of the fashion industry in the French economy represents a sales turnover of € 10 billion (17% men's ready to wear) and around 55 000 employees. This industry is very important in the French economy, but nevertheless, was not saved from the crisis. During the last decade the staff strength fell to 30% under pressure from South East Asian countries and the Eastern Europe where the labor is less expensive than in France. (La mode française 2005)

The consumption of luxury ready to wear clothes has slowed down. Consequently, fashion designers have had to democratize their collections and their prices. They have developed a new range of products that are 30-40 % less expensive. Jungle de Kenzo and KL by Lagerfeld are some examples of this diversification policy.

Extraits

[...] De Fursac), which can be a threat for the industry. The Competitive Rivalry The market place is divided into different types of actors: The house of Haute Couture: Dior, Givenchy, Smalto, Balmain, Scherrer, Ferraud and so on. These fashion houses distribute their collections all around the world. They take advantage of a strong brand image thanks to their history, even if their individual image is more and more outdated. In the past these brands were independent and familial. Actually they were a part of a big luxury group. [...]

[...] They diversity their activity rapidly, and take a position in the accessories segment. Finally, they extend their distribution network through these means. - The entry of new actors whose first activity is not the ready to wear sector, like Louis Vuitton, Gucci, Prada or Arrow. This type of company establishes a global strategy built on expansion, of which the main objective is to save an expertise, historically recognized in their origin, to compete in a new market segment. They benefit from a brand name, and fame, to penetrate the market place. [...]

[...] The environment is changing, and brands need to implement competitive intelligence, and be adaptable because the industry profitability depends on it. In this analysis Larry Downes (2001) identifies three new forces that can transform whole industries: Digitalization: This denotes the power of information; all players in a market will have access to far more information and may easily change the market structure. With respect to our case, the luxury industry is very close; the information stays very confidential. Actually the power of information cannot change the basis of competition in this industry. [...]

[...] The brand image is directly conveyed to the final customer, and increases the brand notoriety at the same time. This type of distribution is also the distinctive feature of haute couture. Two types of buyers are present in this industry. Firstly the regular customers, who are loyal and very important, because they insure constant income for the brand. The second one is the occasional customer; he is as important as the first one but can switch easier from one brand to another. Thus the brands need to create customer loyalty. [...]

[...] The threat of potential new entrants A lot of competitors are already in the market, and benefit from fame and a strong brand image. A majority of customers are loyal, and buy one or other brands because it is a famous and recognized, and they feel confident about it. Secondly the access to the distribution network is not easy for every company. It is very expensive to manage a shopping network. However some companies have found a cheap alternative: a corner in a big multi brand shop such as Les Galeries Lafayette or Le Printemps. [...]