Apr 06 2010

Upmarket fashion portals: More than a fad?

Published by at 11:27 am under Companies,Top Stories

Swiss-based luxury goods firm Richemont wants control of UK-based fashion portal Net-a-porter.com. It already owns roughly 33% of the portal and offered to buy the rest of the business last week, Financial Times Deutschland (FTD) reported. According to FTD, Richemont valued Net-a-porter at €393 million.

Also in the news today: eBay launched a new-look fashion site at Fashion.ebay.com.

These are just two of many upmarket fashion portals, which have been making news (and in many cases huge turnovers, if the managements are to be believed) in Europe recently, in what must be the most unlikely triumph for e-commerce since the birth of the world wide web. Too unlikely to be sustainable, in my view.

I can understand why books sell on the web. And air tickets, sex and (even) used cars. But, that designer clothes would become such an e-commerce success, I would not have predicted. In fact, I still don’t believe in it as more than a short-term fad – despite the success stories and the money being put into it by savvy investors, such as Richemont.

I don’t quite understand what motivates people to buy “exclusive” designer clothes in a “web factory shop”, which is essentially what Net-a-porter is. The huge selection? (Net-a-porter says it carries clothes and accessories of over 300  designers.) I don’t think so. The anonymity? I don’t think so. (In my view, buying and wearing Prada is about the opposite of being unobtrusive, or blending into the crowd.)

The deep discount to what similar designer dresses cost in real-world shops? Ahh, now we might be getting closer to the truth.

Fashion portals sell designer labels at prices which the masses can afford. Or, put the other way around: The web enables the masses to wear the labels only the richest of the rich could wear before. That’s the exciting thing about these fashion portals, I guess. And also the big danger.

The big question: how sustainable can this business model be in the long-term? As far as the top designers are concerned, it’s an extremely dangerous game. And for that reason, also for the upmarket fashion portals. Only designers who have come to the end of their careers and think the time has come to “cash in” their images and/or sacrifice their brands on the “capitalist altar” should sell their creations on fashion portals. Or, the other way around: To think you can build a name as a top fashion designer by starting out in a web shop and then progressing to the high fashion shops of Paris, Munich and New York, is a non-starter idea, if ever there was one.

Fact is: Richies (want to) pay exorbitant prices for their Prada shoes, because they know high prices keep the shoes exclusive. They don’t want everyone to wear what they wear. So, they pay for exclusivity. (They don’t pay 8 times more for Prada tekkies than All Star tekkies, because the Pradas are 8 times more comfortable!)

Problem (for the portals) is, once everyone can own Prada, the richies simply move on to other labels, which everyone can’t own.

Or, am I missing something? If I am, then the designer clothes shops in the fashion quarters of the world are in big trouble. Apart from the designer names.

The fashion business has always been about hot air. But, in my view, the designer fashion portal is just one contradiction too many…

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