Diffusion Lines and Designer Collaborations Will Sustain Demand for fashion Designers

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Despite residual unemployment throughout much of the next five years, coupled with the threat posed by a saturated market, the Fashion Designers industry is poised for growth, according to IBISWorld, the nation’s largest publisher of industry research. As the value of once-elite brands diminish, designers will alter their business models, developing new product lines that are aimed at different price ranges. This strategy will ultimately help revenue grow to $1.2 billion over the five years to 2016. In 2012 alone, IBISWorld expects revenue to increase as consumers continue opting for lower-priced designer collaborations with fast fashion retailers.

IBISWorld Market Research

IBISWorld Market Research

The increasing visibility and accessibility of fashion will bode well for industry participants, as consumers' budgetary constraints diminish.

Despite residual unemployment throughout much of the next five years, coupled with the threat posed by a saturated market, the Fashion Designers industry is poised for growth, according to IBISWorld, the nation’s largest publisher of industry research. As the value of once-elite brands diminish, designers will alter their business models, developing new product lines that are aimed at different price ranges. This strategy will ultimately help revenue grow to $1.2 billion over the five years to 2016. In 2012 alone, IBISWorld expects revenue to increase as consumers continue opting for lower-priced designer collaborations with fast fashion retailers.

The Fashion Designers industry has not suffered too deeply over the five years to 2011. Despite revenue declines in 2008 and 2009, industry operators have fared well because of expanding revenue streams through new markets and product offerings. Over the five years to 2011, IBISWorld estimates that revenue has grown at an average annual rate of 0.1% to about $1.0 billion. With the luxury market rebounding quickly after the recession, revenue grew 1.2% in 2010 and is expected to increase another 1.4% during 2011.

Fashion designers have found new ways to market and sell their creations. Collaborations with mass merchants like Target and H&M have been at the forefront of the market's expansion. These retailers carry specially designed, lower-priced pieces for a limited time, capturing a younger and less wealthy demographic. Similarly, designers have introduced diffusion lines, which aim to make high-end designs more accessible to the public. Diffusion lines are created by the original designer or design house (a group of designers working under the same brand) and are priced more moderately than the original line.

While these strategies have helped keep fashion designers in the public's eye, they have also cut into profit margins. Over the five years to 2011, IBISWorld estimates that profit has slipped as consumers opted for lower-priced apparel and accessories during the recession. However, as demand returns, profitability will likely return to its pre-recessionary levels.

According to IBISWorld analyst, Nikoleta Panteva, over the five years to 2016, revenue is anticipated to grow to $1.2 billion. “The increasing visibility and accessibility of fashion will bode well for industry participants, as consumers' budgetary constraints diminish,” says Panteva. “Additionally, collaborations with fast fashion outlets are expected to attract a growing proportion of the population, allowing for steadier revenue streams.”

For more information, download the full report from IBISWorld on the Fashion Designers industry

IBISWorld Industry Market Research Reports Contain:

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About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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James Karklins
IBISWorld
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