Affordable designer high street collaborat​ions still successful

Thursday, 17 November 2011
The market for affordable, if disposable, designer fashion remains popular and has lost none of its dazzle. Not if the current Versace for H&M collaboration is a barometer demand. And speaking of dazzle, there is nothing subtle about this high street collection, which is arguably one of Versace's best. By revisiting the Versace archives, Donatella has made a collection that is, if anything, youthful and fun. If you can turn a blind eye to H&M's fabrics (it really is impossible to product a silk printed bomber for a disposable price, unless you skimp somewhere, in this case fabric!) you will be pleasantly surprised at how relevant this collection is.

With an aggressive press campaign that started months before the launch, the H&M customer, indeed most fashionistas' worth their salt, will have read about the Versace collection launching in stores this month. In a matter of weeks sales figures will be released, which will surely beat expectations. Based on news media coverage to date, there is every reason to expect huge queues and crowds. Donatella herself attended the opening in London this morning and Saturday in the United States. A quick visit to its website, and it had already crashed by 10am, with a message "we are experiencing a large number of visitors, please try again later."

Items from the collection like leather trousers, £179, archive printed shirts £29.99 (not for the faint of heart) and jackets from £149, are sure to sell out. And that is just the menswear. Vivid leopard-spotted sleeves will be a hit with the ladies many of them will then likely reappear on eBay at a higher price.

Despite concerns that the commonplace appearance of designer names at stores ASOS, Debenham's, Macy’s, and Mango would eventually lead to shopper fatigue, such collaborations are proving to be both a reliable business model for retailers and a business in themselves, reported the Herald Tribune.

And designers, even those who have far less name recognition than Ms. Versace, are finding these collaborations to be increasingly lucrative. While few details about financial relationships have ever been made public, the typical fees paid to designers have generally more than doubled over the last five years, according to several participants in recent deals, though each seems to follow its own rules.

Mr. Lagerfeld and Stella McCartney, who designed an H&M collection in 2005, were each reportedly paid $1 million for their services; and Madonna, whose M by Madonna collection was sold there in 2007, was said to have received $4 million. (Billboard reported in 2007 that sales of Madonna’s collection, which was broader than most, reached $20 million.)

Ms. Versace’s payment is expected to be closer to that of the other designers, according to company executives, who spoke to the Tribune on the condition of anonymity because the terms were confidential. But Ms. Versace’s deal is based on a percentage of sales. It also includes a higher financial commitment from H&M for advertising and promotions. A spokeswoman for H&M said the company would not comment on any sales or compensation figures for the collaborations.

While the mechanics of such collaborations have become more sophisticated, just how they work has remained somewhat mysterious to shoppers, who may not realize that sales of Ms. Versace’s collection for H&M, or the wildly popular Missoni line that was sold at Target this fall, will barely have an effect on the retailers’ overall sales volumes. In fact, their success is not measured in dollars, but in overall media impressions, the metric used to determine how many times consumers read or saw a mention of the collaboration in the news media. The Missoni for Target collection, for instance, was covered in the September issues of more than 40 magazines and amassed impressions in the billions.

To new designers, these collaborations offer a fast infusion of cash while helping to expand their brand awareness. In the early days of fast fashion, retailers needed a big name to entice consumers, but consumers are now much more aware of a broad spectrum of designer names. In the US, selling clothes at Target has become a status symbol for up-and-coming designers.

“The model has changed in a way,” said Gaby Basora of the Tucker label, who designed a collection for Target last year. “It used to be that you went mass toward the end of your career. Now it’s more of a legitimizing moment for younger bands.”

Images: Versace for H&M

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