The hyper-profitable, once-disruptive direct-to-consumer model isn’t just for fashion startups anymore. As reported by GQ and Glossy, the high-fashion world is tapping into the practice, hoping to capitalize on the insane margins that brands like Warby Parker and Everlane have enjoyed for years now.
“Brands like Milly, Comme des Garcons and Theory are designing in-house offshoots of their main collections that have all the makings of the digitally native, direct-to-consumer brands that have flooded the market,” Glossy writes, noting that the sub-labels won’t be sold through wholesale partners, but rather through “the brands’ direct channels.”
Writing about CDG’s new venture, GQ adds that the move “says a lot about where the fashion industry is going: Direct-to-consumer is now a legitimate business move.” The article also notes that Public School “is rebooting as a [DTC] outfit” and Band of Outsiders founder, Scott Sternberg’s, new venture, Entireworld, will be “online-only.”
The appeal of DTC is pretty obvious – brands that sell through wholesale can’t gather data on their customer base, leaving them less informed than their wholesale partners, and they also don’t make as much money per garment when they sell them at wholesale rates. Cutting out the third party alleviates both issues.
And while high-fashion’s embracing of the model may seem a little late — Glossy contends that DTC is a bubble “ripe for bursting” — it’s presumable brands like CDG will still be allowed into the party, regardless of when they show up (who would turn down a more affordable version of their clothes?).
“Direct-to-consumer is one of the most important trends in retail, whether it’s through brick-and-mortar or e-commerce,” Jane Hali, CEO of retail analyst firm Jane Hali & Associates, told Glossy. “It gives brands more control of their branding and shopping experience.”