Nicole Farhi fights the industry consolidates

      High-end fashion brand Nicole Farhi called administrators. Restructuring specialists Zolfo Cooper are a buyer, while real estate consultant asking what do business with the company.

That is a case for a brand that was once the jewel in the crown of French Connection. Sold by French Connection in 2010, Nicole Farhi fight through several owners while to compete and maintain profitability.

So what happened? Is the product shops, market trends and external pressure? Or they just do not want to go with the times? It could be a mixture of all these elements: the recipe was not right.

Quality rivals

Jil Sander, Joseph, Hugo Boss and Max Mara are all very similar in terms of quality and design at Nicole Farhi. So it is not a crowded market where only the strong survive and the rest.

Many designer brands are struggling to remain profitable, and there are some well-known iconic British brands that have failed in recent years. Particularly in Aquascutum administrators called last year but was eventually bought by Hong Kong Private Equity Partners is based YGM Trading at ￡ 15m.

Private Equity Partners seems the answer is "white knight" for many fashion brands, unable to make profits and to adapt their business model without investment.

And profit is what it is because the fashion industry, like any other, is to make money. However, with the rapid obsolescence of products and an ever-changing landscape of the world, companies are in the industry, the. Particular challenges There are always coming, be the maybe even better products and better business models, new competitors.

What makes a successful fashion brand?

Fashion brands that are successful with more than just great products and amazing fashion shows, a good business model and organizational structure is equally important.

Burberry seems to have found a winning combination for a successful relationship between Chief Creative Officer Christopher Bailey (responsible for everything related to the image of the company) have and Chief Executive Officer Angela Ahrendts businesswoman. It is not surprising that their company is one of the most innovative in the world of fashion, its varied shops and online presence for the quality of its fabrics and success of brand extension. Perhaps to learn from experience, to find the right blend of creativity and business acumen.

Farhi perfect

In the case of Nicole Farhi, product design and quality looks good, prices for buyers brand of upscale luxury is set properly and they have an online presence. So what really went wrong?

Keep opened a few expensive flagship stores - without the same level of marketing because the competition was a retail strategy risky, even before you look - one in London, on Bond Street, and another on Madison Avenue in New York City their regular stores. Flagships are for some, and become expensive showrooms for those who can afford it. Fashion brands in retail at the end of such a strategy with substantial fixed costs.

Brands become more "pure player" line, so it is wise to have a lot of shops? Competition, as the brands selected and beautifully edited together from Net-a-Porter shows the success of the online fashion store without. Greater online presence could an innovative marketing campaign to help Nicole Farhi.

Also not to forget the logistics of the supply chain to get "right product at the right time and the right size" on the right side is the curse of life retailers. If this part of the strategy is ineffective, it will inevitably have an impact on everything else. It is a difficult balancing act.

Private Equity in shining armor?

Perhaps the answer is obvious: work with the right investors. Private equity financing and can help to develop business models that over time, through all aspects of the product and marketing company for the production and supply chain management.

There are many investors who specialize in coming to the rescue of sick and underperforming fashion brands. Sun European Partners is an example, already established as a brand fashion products investments. Jaeger and Hunter boots are among the brands that have been recently acquired by private investors. Many private equity firms actively target the fashion industry, including Isis Equity Partners, 3i and Permira.

But private investors often want to Fashion brands in a direction that may not be appropriate for a desire for exclusivity and creative freedom. Creative are not known, the same views on growth strategies that their donors.

What future for fashion?

Financing of private equity on the one hand, to facilitate the rapid international expansion and high returns for investors. However, an overly aggressive expansion plan risk of damaging a brand erosion of the integrity of its design and exclusivity, and also by the exposure to other risks, such as counterfeiting. This could occur through a strategy of international marketing, with a potential of over-licensing its products.

Investors focus brands, which appear to be ineffective or are in trouble can. They can target marks as well that give rise to potential acquisitions and opportunities for its investment funds.

The fashion industry has mastered himself "clean" of large groups or conglomerates that a stable brands. LVMH, for example, Fendi, Marc Jacobs and Donna Karan to name a few. This business strategy will further reduce the originality of fashion brands and increase the homogeneity within the industry, around the world in the likeness of retail formats and duplication of products.

Admittedly, this is the last thing we need in the world of fashion that evolves coupled to individuality and novelty products with unique niche in the rule?

But fashion brands still need good investors and developed business models to manage the logistics and compete, while the use and exploitation of the creativity of the brand. A "dream team" of design and finance can work well together and the future strategic direction for fashion brands to be.