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Industry Definition This industry comprises establishments the design branch of a large retail chain,
that provide professional design services but they more often represent smaller
for such products and segments as design houses that provide fashion
fashion, clothing, shoes, textiles, fur, products to several different sellers. This
jewelry, costumes, lighting and floats. industry does not include in-house
These services occasionally represent design services.
Similar Industries 31524 Women’s, Girls’ and Infants’ Apparel Manufacturing in the US
Establishments in this industry manufacture blouses, shirts, skirts, dresses, pants, nightwear, suits, coats and
other outerwear for women and girls.
Industry at a Glance
Fashion Designers in 2018
% change
10 2
5 1
0 0
-5 -1
Year 10 12 14 16 18 20 22 24 Year 11 13 15 17 19 21 23
Revenue Employment
SOURCE: WWW.IBISWORLD.COM
p. 24
Products and services segmentation (2018)
3.1%
Key External Drivers 9.1% Textile design
Demand from Jewelry and accessory design
clothing and clothing
accessories stores
Per capita disposable 14.2%
44.7%
Other design services
income
Demand from Fashion clothing design
jewelry stores
Corporate profit
Demand from shoe and
footwear manufacturing
p. 5 28.9%
Footwear design
SOURCE: WWW.IBISWORLD.COM
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 29
Industry Performance
Executive Summary | Key External Drivers | Current Performance
Industry Outlook | Life Cycle Stage
Executive The Fashion Designers industry has designers have had to establish local
Summary trended upward as the economy has niche markets to attain lucrative
strengthened. Increased consumer contracts. As in most industries,
confidence and favorable industry independent contractors operate in this
conditions have created mass appeal in industry with varying degrees of success.
this previously elite industry. Moreover, Less-established designers experience
fashion designers have discovered more volatility in demand for their
innovative ways to market and sell their services. Even so, the gradual increase in
creations. Designer collaborations with consumer confidence and per capita
mass merchants, such as Target and disposable income has enabled both
H&M, have been at the forefront of the small and large operators to become
market’s expansion. These retailers carry more profitable over the five years to
specially designed, lower-priced pieces 2018. Profit is expected to account for
for a limited time, capturing a 9.5% in 2018, down from an estimated
8.2% in 2013.
Over the five years to 2023, industry
The
increasing visibility and accessibility of revenue is anticipated to grow at an
annualized rate of 1.6% to $2.9 billion.
fashion will bode well for industry participants The increasing visibility and accessibility
of fashion will bode well for industry
demographic that is younger and more participants as consumers’ budgetary
price conscious. In addition, demand constraints diminish. Additionally,
from other clothing and accessories demand from clothing and accessories
stores has also increased over the past stores is expected to increase, furthering
five years. Consequently, over the five demand for design services.
years to 2018, industry revenue is Collaborations with fast-fashion outlets
expected to grow at an annualized rate of are expected to remain a mainstay of the
5.9%. In 2018, industry revenue is industry, attracting a growing proportion
expected to increase 1.7% to $2.7 billion. of the population and enabling for
While the industry grew as a whole, steadier revenue streams. To maintain
not all industry players grew equally. industry growth in the future, designers
Established designers that contracted must continue focusing on new business
their services to large retailers benefited models and design processes that attract
the most over the past five years. Smaller mass appeal.
Key External Drivers Demand from clothing and clothing and clothing accessories stores is
clothing accessories stores expected to grow in 2018, creating a
Clothing and clothing accessories stores potential opportunity for the industry.
are the largest sources of revenue for the
Fashion Designers industry. Any change Per capita disposable income
in demand for the stores’ products also Per capita disposable income determines
alters demand at the design level. The the amount of money that consumers
growing focus on fast fashion (low-priced have to spend on products designed by
iterations of runway styles that are this industry. The discretionary nature of
delivered to consumers within a short design services makes them dependent
time span) has increased demand for this on consumers’ ability to purchase goods
industry’s services. Demand from outside of their scope of necessity. Per
Industry Performance
Key External Drivers capita disposable income is expected to revenue. Conversely, when corporate
continued increase in 2018. profit decreases, retailers are less likely to
market such projects. In 2018, corporate
Demand from jewelry stores profit is expected to increase.
Demand for trendy and fashionable
jewelry determines the need for design Demand from shoe and
services within this segment. As footwear manufacturing
consumers increasingly place more value Footwear manufacturers’ demand for
on modern designs over classical pieces, design services affects industry revenue
demand for design services will grow. as this market accounts for significant
The Jewelry Stores industry is expected portion of total industry revenue.
to grow in 2018. Designers introduce new shoe styles each
season and, much like the clothing sector,
Corporate profit the trend within the footwear segment
Corporate profit is earned across all has been toward fast fashion. Moreover,
industries, after inventory valuation and footwear manufacturing continues to be
capital consumption adjustments. An outsourced to low-cost producers
increase in corporate profit will generally overseas. The Shoe and Footwear
drive large retail corporations to spend Manufacturing industry is expected to
on projects, such as designer decrease in 2018, posing a potential
collaboration lines, which boost industry threat to the industry.
4
2
3
% change
% change
2 0
1
-2
0
-1 -4
Year 11 13 15 17 19 21 23 Year 11 13 15 17 19 21 23
SOURCE: WWW.IBISWORLD.COM
Industry Performance
% change
optimal balance between value, quality 10
and style. In past decades, it took 5
extended amounts of time before
runway styles carried over to 0
department stores. Fashion-savvy -5
shoppers had to pay high premiums for Year 10 12 14 16 18 20 22 24
trendy designer outfits. Even as
incomes increased during the economic SOURCE: WWW.IBISWORLD.COM
Trending now As consumer confidence increased, crucial factor for success. Over the five
individuals became more willing to years to 2018, demand from these stores
purchase nonessential items, such as is expected to increase an annualized
furniture and luxury clothing. Rising 0.4% due to increased consumer
demand for high-end clothing, accessories confidence and disposable incomes. The
and jewelry has significantly benefited the increase in demand has enabled fashion
Fashion Designers industry. Large retailers, designers to obtain increasing amounts
such as Target, Kohl’s, JCrew and H&M, of lucrative contractual work. In
began introducing collaborative reasonably particular, fast-fashion outlets, such as
priced fashion lines with popular fashion Zara and Forever21, have also increased
designers. Even though designer in popularity over the past five years due
collaborations have occurred for decades, to their ability to cost-effectively transfer
they surged in popularity in recent years; runway styles from elite fashion shows to
some notable collaborations include retail locations within weeks. Fast-
Alexander Wang for H&M and Lilly fashion retailers make chic apparel both
Pulitzer and Victoria Beckham for Target. accessible and attractive to massive
These relationships work not just as an amounts of consumers. Although many
engine of monetary gain for large retailers, fast-fashion retailers employ in-house
but also to bring lesser-known designers designers, their business model has
and their collections to the attention of a increased demand for fashion design
much broader base than they otherwise services over the past five years.
would have reached. Social media and mobile apps have
For fashion designers, demand from also contributed to industry growth over
clothing and accessories stores is a the past five years. Websites such as
Industry Performance
Trending now Pinterest and e-commerce platforms such popularity of fashion blogs have also
continued as Etsy enable smaller designers to both helped industry operators. Bloggers such
showcase their designs and draw as Chiara Ferragni and Aimee Song have
potential new clients. Etsy, in particular, surpassed fashion powerhouses such as
helps designers that serve niche markets Elle and Vogue in social media following.
by connecting them to consumers in The growing number of fashion blogs
locations previously inaccessible. enable smaller designers to gain exposure
Moreover, the increasing number and and attract new clientele.
Industry Performance
Industry Performance
Industry Performance
Life Cycle Stage Technological advancements in communication
and computer-aided design will assist growth
Input and production costs have fallen as
manufacturing has moved offshore
Consumer demand for fast fashion is increasing
the need for the industry’s services
10
Quantity Growth
Many new companies;
minor growth in economic
importance; substantial
5 technology change
Fashion Designers
Jewelry Manufacturing
Leather Tanning & Finishing
Textile Mills Men’s & Boys’ Apparel Manufacturing
-5
Women’s, Girls’ and Infants’ Apparel Manufacturing Decline
Shrinking economic
importance
-10
-10 -5 0 5 10 15 20
% Growth in number of establishments
SOURCE: WWW.IBISWORLD.COM
Industry Performance
Industry Life Cycle Industry value added (IVA), which within the women’s clothing segment.
measures an industry’s contribution to The introduction of fast fashion in the
the overall economy, is forecast to marketplace has created a new realm in
Thisindustry increase at an annualized rate of 4.4% which designers can work. Previously
is M
ature over the 10 years to 2023. Meanwhile, US only available to high-end fashion
GDP is anticipated to grow an annualized houses, these services are now trickling
2.2% during the same period. While down to common mall stores, such as
growth faster than the economy normally Forever 21, J Crew and Banana Republic,
signifies an industry in the growth phase which take the most recent runway
of its industry life cycle, this is not the trends and interpret them for the middle-
case with the Fashion Designers industry. income consumer.
The industry is in the mature phase of its Technological advancements in
life cycle, and the exceptional growth in communication and computer-aided
IVA is largely due to the strong growth design have also contributed to the
early in the 10-year period. Fashion industry’s growth. Technology has
design is a well-established profession enabled participants to expand across the
and is not expected to change drastically United States; once centered in New York
in the future. This high growth is not City, design services are expanding to
typical of the usually cyclical Fashion other metropolitan areas. The ease of
Designers industry. transferring ideas is also beneficial in
Industry demand relies heavily on cutting production costs. Designers can
consumers’ economic wellbeing. Over the send their work to manufacturers in
past five years, consumer demand for low-cost Asian countries with the click of
new labels and trends and designers’ a button. These prints then get turned
accommodation of smaller pocketbooks into physical manifestations of the design
helped open new doors for fashion and hit stores within a matter of weeks.
designer services, a trend that is expected The low cost and high volume of this
to continue. The industry’s product lines fast-fashion movement have helped spur
have expanded substantially, especially industry growth.
3.1%
9.1% Textile design
Jewelry and accessory design
14.2%
Other design services
44.7%
Fashion clothing design
28.9%
Footwear design
Products & Services individuals as they are contracted. much of the period. However, consumers
continued Operators in this segment create both have placed a higher value on fashionable
specialized designs for individuals and footwear, which has ultimately caused
general designs for mass production. For the footwear designing segment to
example, in 2017, Victoria Beckham marginally grow as a share of revenue.
created a line for Target, marking her first
mass-market collaboration. The line Jewelry and accessory design
included women’s wear and children’s Jewelry and accessory design, which
clothing. Additionally, in 2014 Alexander currently accounts for 9.1% of revenue, is
Wang collaborated with Adidas to design a an area of substantial growth. This
collection to be sold in thousands of H&M category includes the design of luxury
retail locations. Additionally, Alexander and costume jewelry, as well as the
Wang has also designed custom red carpet design of accessories, such as handbags,
looks for high profile clients, such as Miley luggage, scarves and other nonclothing
Cyrus and Nicki Minaj. items. The items in this category are
Fashion clothing design services have highly discretionary, so demand for
grown as a portion of the industry, segment services is heavily dependent on
currently representing 44.7% of revenue. per capita disposable income and
Fast fashion has placed an increasing consumer spending. As the economy
focus on mimicking designs from the strengthened over the past five years,
latest runway shows. Designers have been more consumers have been willing to
contracted to fulfill growing demand for spend on luxury jewelry and accessories.
various trends and even specific styles of Additionally, e-commerce sites such as
clothing. For example, retailers like Etsy have enabled smaller jewelry
Forever 21, H&M and Topshop translate designers to reach more customers.
fall runway trends to reality in a matter of
weeks; this turnaround increasingly Textile design services
requires the industry’s services. Textile design services make up 3.1% of
Other clothing design services include industry revenue and has increased its
the creation of undergarments, hosiery share of revenue over the past five years.
and similar items. This segment is Operators in this segment design various
relatively stable since these clothing fabrics and materials used in the
pieces are more essential and do not manufacturing of clothing and
follow volatile consumer taste patterns or accessories. Brands such as Vera Bradley,
disposable income changes. Their growth Liberty London and Lilly Pulitzer have
relies on volume rather than price. popularized over the past few years due
to their unique fabrics and patterns. As
Footwear design demand for high-end apparel increases,
Footwear design services account for fashion designers require unique fabrics
28.9% of industry revenue. This segment to stay current and edgy, resulting in
includes athletic, formal, casual and higher demand for textile design services.
slipper designs. Many footwear designers
are under contract by specific Other design services
manufacturers, such as Nike or Jimmy Other design services represent 14.2% of
Choo. These designs are often outsourced industry revenue and include anything
abroad to low-cost manufacturers to save from sports uniform and costume design
the contracting companies on labor and to parade float design. Operators in this
input costs. As a result, demand for segment are usually very specialized and
footwear design services has waned over serve especially niche markets.
Demand Demand for fashion design services is elite buyers. E-commerce platforms have
Determinants closely tied to per capita disposable also enabled designer fashions and
income and overall consumer confidence. services more available consumers,
While both of these variables continue to driving industry demand. Consumers’
increase as the economy recovers, demand ability to afford and attain these fashions
for design services also increases. The has spurred demand for additional
greatest forces pushing industry demand designs and services in downstream
upward are consumer preferences for manufacturing and retailing industries.
trendy and fashionable designs in line The emergence of fast fashion has also
with current runway styles and supported this growing demand. Fast
consumers’ ability to pay for these trends. fashion describes styles that interpret the
most recent runway trends in low-priced
Affordable and attainable pieces made available to the mass
Designer labels have become increasingly market. Retailers such as Forever 21,
available to middle-income consumers H&M and Zara have grown exponentially
for a variety of reasons. Aside from the by making fast fashion the center of their
increased consumer confidence and business models. Since the average
income, designers have adapted their consumer can obtain designer runway
strategies to reach more consumers. products via these fast-fashion retailers,
Fashion collaborations between top- demand for the designs increases with
notch designers and large department each Fashion Week. These designs earn
stores have made trendy clothing both revenue by relying on volume of sales
more affordable and attainable to less rather than price or quality.
5.6%
Other markets
10.6%
Fashion houses
16.2% 50.1%
Retailers and wholesalers
Apparel manufacturers
17.5%
Individual consumers
The Fashion Designers industry brand names, almost all industry revenue
generates revenue from a range of is earned through contracted operations.
downstream markets servicing fashion
demand in the United States and Retailers and wholesalers
globally. Since this industry does not Retailers and wholesalers are the largest
include in-house designers for major market segment for the industry,
Major Markets accounting for 50.1% of total industry for special events, such as weddings and
continued revenue. This segment includes large galas. Over the five years to 2018, this
national-level clothing retail and segment’s share of revenue has increased,
distribution companies, as well as small as the number of households earning
locally operating boutiques. These more than $100,000 per year has
retailers require specific designs to be increased from 24.5% of households in
sold in stores that attract certain types of 2013 to 26.7% to 2018.
consumers. For this reason, they hire a
growing number of designers for a Apparel manufacturers
greater number of service hours. Brands Apparel manufacturers are expected to
such as H&M and Zara, which interpret account for 16.2% of industry revenue in
the latest runway trends into affordable 2018. Businesses in this market contract
clothing pieces, have increased their industry operators to design clothing
demand for design services over the past items for mass production. Over the past
five years. five years, this segment’s share of revenue
Department stores also demand has decreased in line with falling
designer services. While department domestic manufacturing activity. For
stores may not carry the newest trends example, in the Women’s, Girls’ and
displayed at New York Fashion Week, Infants’ Apparel Manufacturing industry
designer labels are starting to popularize (IBISWorld report 31524) import
in these establishments. An example of penetration has led to a 2.0% annualized
this is Target, which periodically decline in revenue, as imports currently
collaborates with popular designers, satisfy 91.2% of domestic demand.
including Lily Pulitzer, Alexander
McQueen and Victoria Beckham, to Fashion houses
create fashion-forward products with Fashion houses such as Gucci and Marc
mass appeal. Over the five years to 2018, Jacobs often have their own in-house design
this segment’s share of revenue has personnel to cater to a very specialized
increased, as department store designer high-end consumer and retain the label’s
collaborations and fast-fashion retailers image. Smaller fashion houses, however,
have grown in popularity. may hire design services to assist in creating
seasonal items. Fashion houses also contract
Individuals textile designers to create more unique and
Individual consumers are the second- fashion-forward items. Fashion house
largest market for industry services, contracts, with big and small labels, account
accounting for 17.5% in 2018. This for 10.6% of revenue earned within the
segment includes high net worth buyers Fashion Designers industry.
and celebrities that hire designers to
create custom fashion pieces for them. Other markets
This segment also includes individuals Other markets account for 5.6% of industry
who purchase custom-made designer revenue. This segment encompasses any
apparel and accessories online. The other entity that demands specialized
increased accessibility of designers design services. Over the past five years,
caused this segment to grow over the past revenue from this segment has been steady
five years. Individuals in this market due to the wide variety of businesses that
typically enlist designers to create pieces fall in this category.
West
AK
0.0 New
England
ME
Great Mid- 0.5
Lakes Atlantic 1 2
NY 3
WA MT ND 26.4
5 4
1.6 0.2 MN
Rocky
0.2 1.4
WI
OR Mountains SD
0.0
Plains 0.5 MI
2.9
PA
2.4
6
7
2.1 ID IA OH 9 8
0.5 WY 1.1
0.1
NE
0.2
IL IN WV VA
3.4 0.3 1.7
West NV
0.2 0.0
KY
UT MO
0.2 NC
0.7
1.6 CO KS 0.8 1.8
1.8 0.5 TN
SC
Southeast
0.6
CA 0.9
21.4
OK AR GA
0.2 0.4 AL 1.4
AZ MS 0.3
1.1 NM
0.3 Southwest 0.1
TX LA
0.6 FL
4.1 8.4
West
HI
0.1 Additional States (as marked on map) Establishments (%)
1 VT 2 NH 3 MA 4 RI Less than 3%
0.1 0.3 0.9 0.5 3% to less than 10%
10% to less than 20%
5 CT 6 NJ 7 DE 8 MD 9 DC
20% or more
0.7 2.4 0.1 1.4 0.4
SOURCE: WWW.IBISWORLD.COM
%
has historically relied on. In total, New
York State comprises 26.4% of total 10
industry establishments. The Mid-Atlantic
region, with 33.2% of total establishments, 0
is therefore the preeminent region for the
West
Great Lakes
Mid-Atlantic
New England
Plains
Rocky Mountains
Southeast
Southwest
industry in the United States.
The thriving art, entertainment and
fashion scene in Los Angles is a notable
factor behind the strong industry presence Establishments
in the West. Similar to New York, high Population
concentrations of designers and fashion SOURCE: WWW.IBISWORLD.COM
Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks
Basis of Competition | Barriers to Entry | Industry Globalization
Market Share Market share concentration within the industry concentration has remained
Concentration Fashion Designers industry is extremely relatively low and steady. Over the next
low. Nonemployers comprise 88.7% of five years, market share concentration is
industry establishments and typically expected to increase slightly as fast
Level
engage in contract or freelance activities. fashion and designer collaborations
Concentration in Additionally, 82.7% of employer become more popular. Even so, no single
this industry is L ow establishments operate with one to four operator is expected to account for more
workers. Over the past five years, than 5.0% of industry revenue.
Key Success Factors Establishment of brand names These presentations use various media to
Designers that establish brand names in leave an effect on the potential client.
apparel, footwear and other fashion
IBISWorld identifies markets can leverage their brand names Ability to attract local
250 Key Success for further design recognition. support/patronage
Factors for a Successful designers can attract
business. The most Adoption of a commercial focus patronage either professionally or
Designers must remain focused on the commercially based on the creativity
important for this
commercial acceptance of their designs and acceptance of designs. This
industry are: and the requirements of their major patronage can pave the way to wider
clients. Creativity, fashion sense and market acceptance.
advanced communication skills help
companies gain success. Prompt delivery to market
Designers need to work around time
Attractive product presentation sensitive projects from clients to keep
Industry players need to present detailed their loyalty. Designers also need to stay
and inspirational portfolios of designs. ahead of changing fashion trends.
Competitive Landscape
Cost Structure largest expense for industry operators, less than wages, representing 19.2% of
Benchmarks emphasizing the highly skilled and revenue. Designers use inputs such as
labor-intensive nature of the industry. fabric, leather and fasteners to craft
continued
Most industry revenue is derived from the samples, which can be very costly
application of skilled design services. because of their high quality and
Wages have steadily increased as a share specialized nature. Purchase costs are
of revenue, increasing from 33.8% in highly variable between designers
2013, which is largely the result of because most materials are purchased on
operators receiving compensation based a per-project basis. Over the five years to
on their artistic skills and unique value- 2018, purchasing costs have inched up as
added to the industry. Additionally, for a result of increasing prices from
larger operators, industry wage costs upstream suppliers.
include payments to subcontracted labor
and fringe benefits paid to staff. To save Rent and utilities
on this expense, some companies Rent and utilities are low, accounting
regularly hire student interns during the for 4.8% of total revenue. Workspaces
summer break and frequently use are generally small and usually consist
freelance designers and part-time of a small office or studio space.
employees on a subcontract basis. Additionally, at times, rent can even be
significantly lower, as workspaces for
Purchases nonemployers may even double as
Purchasing costs are the second-largest living quarters. Companies often
industry expense, but are significantly minimize rental costs by sharing larger
Average Costs of
all Industries in Industry Costs
sector (2018) (2018)
100 n Profit
13.2 9.5 n Wages
n Purchases
80 n Depreciation
n Marketing
34.2 n Rent & Utilities
42.5 n Other
Percentage of revenue
60
19.2
40 10.8 1.2
1.3 2.0
1.7 4.8
4.5
20
25.5 29.1
0
SOURCE: WWW.IBISWORLD.COM
Competitive Landscape
Cost Structure premises with complementary or of mouth is arguably the most important
Benchmarks noncompeting enterprises. form of marketing, mobile and print
advertising are increasingly important
continued
Other costs tools for building a brand name and
Since the industry is highly labor- reaching consumers. Other industry
intensive, depreciation only accounts for costs are high, accounting for 31.9% of
1.2% of revenue. Depreciation costs revenue. These costs include
include investments into computers and administrative related expenses,
design software. Other costs include industry association membership fees
marketing and advertising, which and legal and intellectual property
account for 2.0% of revenue. While word related costs.
Competitive Landscape
Industry Globalization is a key component of the designers to expand their presence on global
Globalization fashion industry as a whole. For domestic markets. Additionally, as designers become
fashion designers and other operators in the more established, globalization becomes
Fashion Designers industry, globalization is increasingly important. Larger-scale US
Level & Trend present, but less critical. Since the industry designers have to compete for contracts with
lobalization
G in is composed of primarily nonemployers, foreign designers that offer similar
this industry is global reach is usually not a business focus. experiences and customer following.
Mediumand the Even so, fashion designers are able to IBISWorld expects that the industry will
contract services and license designs to experience increasing levels of globalization
trend is I ncreasing international buyers of various size and over the next five years as the ease of global
scope. Computer and communications communication increases and demand for
technology also enables smaller-scale off-the-runway fashion grows.
Major Companies
There are no Major Players in this industry | Other Companies
Other Companies The Fashion Designers industry is highly total industry establishments and 48.0%
fragmented. The majority of industry of industry revenue in 2018. While many
operators are nonemployers that admired designers collaborate with
contribute little to the overall industry large retail stores, there is no single
but, in total, comprise the majority of designer that contracts their services
industry revenue. IBISWorld defines a enough to be considered a major
major company as one that accounts for player in this industry. Most esteemed
at least 5.0% of industry revenue. As a designers earn their revenue from
result, no single company holds a their own storefronts rather than
significant market share. (Nonemployers contracting services to external
are anticipated to account for 88.7% of businesses and individuals.
Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility
Regulation & Policy | Industry Assistance
Capital Intensive
Labor Intensive
Women’s, Girls’
and Infants’
Apparel
Manufacturing Fashion Designers
Men’s & Boys’ Apparel Manufacturing
Traditional Service Economy Leather Tanning & Finishing Old Economy
Wholesale and Retail. Reliant Jewelry Manufacturing Agriculture and Manufacturing.
on labor rather than capital to Textile Mills Traded goods can be produced
sell goods. Functions cannot using cheap labor abroad.
be outsourced therefore firms To expand firms must merge
must use new technology or acquire others to exploit
or improve staff training to economies of scale, or specialize
increase revenue growth. in niche, high-value products.
Operating Conditions
Capital Intensity a high level of creativity that cannot be programs have become more prominent
continued fabricated by a program or machine. and are expected to grow in popularity
Even so, various systems and software over the next five years.
Technology & Systems The industry has been exposed to a developments have generally lowered the
medium level of technological change over cost of CAD equipment and software and
Level the past two decades, stemming from sped up production capabilities.
advancements in computer-aided design According to Wohlers Report 2014,
The level
of (CAD) technology and the use of alternative global revenue for the 3D printing
Technology Change media. Traditionally, industry participants industry is expected to increase from
is M
edium performed design work by hand, $3.07 billion in 2013 to $21.0 billion in
progressing from original sketches to color 2020. The growth of 3D printing will
presentations and ultimately the precise affect various industries, including the
drafting of patterns for manufacturing. Fashion Designers industry. Designers
While hand-drawn sketches still will be able to design jewelry, accessories
prevail as the principal drafting and countless other products very quickly
approach, much of the design process is and easily. Although 3D printers are not
computerized. Designers increasingly use normally found in fashion design studios
customized design equipment and now, they are expected to become more
software packages to generate drafts and common as they become more affordable
final products. The final format of the and accessible.
designs can be supplied to clients across Social media and various mobile apps
a variety of media, using presentation have also made contributions to the
packages for 3D and 2D imaging, scale industry. While CAD technology and 3D
and perspective. Since the mid-1990s, the printing advance the production process,
widespread availability of digital social media and apps enable operators in
technology has enabled some designers this industry to gain exposure and attract
to adopt an all-digital workflow, new clients. E-commerce platforms, such
generating digital images and text that as Etsy, showcase smaller designers and
can be manipulated to meet client enable consumers to purchase items and
specifications. Technological interact directly with the designer.
Operating Conditions
Revenue Volatility
A higher level of revenue Volatility vs. growth
continued volatility implies greater
industry risk. Volatility can 1000 Hazardous Rollercoaster
negatively affect long-term
Regulation & Policy The Fashion Designers industry is subject qualifications to operate as a designer are
to rudimentary state-based business preferable but not mandatory. The
registrations, such as business entity industry does receive some copyright
Level & Trend categorization for tax purposes, which protection against the unauthorized
he level of
T impose only a minor cost for doing reproduction of designs, but designers
Regulation is business. Generally, the industry has a are not given full intellectual property
Lightand the low level of regulatory controls; formal rights for their creations.
trend is S
teady
Industry Assistance The Fashion Designers industry is not Commission, about 50.0% of US apparel
protected from import competition. imports are subject to quotas. Import
However, it does benefit from import tariffs on high-fashion items range from
Level & Trend protection for the downstream textile, 3.0% to 17.0% for underwear and
he level of
T apparel and footwear manufacturing lingerie; 6.0% to 16.0% for dresses; 4.0%
Industry Assistance industries. Under World Trade to 17.0% for skirts; 4.0% to 29.0% for
is N
oneand the Organization arrangements, barriers to women’s pants, suits and trousers; and
trade in clothing and footwear are 2.0% to 16.0% for women’s shirts and
trend is S
teady
steadily being removed, increasing blouses. Also, tariff duties on imported
import penetration into the US market footwear range from 2.7% to 84.0%
and resulting in a downward trend in depending on the country of origin and
local production. the principal manufacturing material
The level of tariffs imposed on apparel (e.g. leather, rubber, plastic or pig skin).
items varies greatly and depends on four The exit of local manufacturing
factors: the type of product, the fiber capacity in the clothing, textiles and
content of imported products, the volume footwear industries has generally
being imported and the country of origin. involved US manufacturers (e.g. Nike,
According to the US International Trade Gap and Levi’s) relocating production to
Operating Conditions
Industry Assistance low-cost countries, but retaining design, association that includes about 500 of
continued marketing and administration operations the United States’ foremost designers of
in the United States. Therefore, local menswear, womenswear, accessories
design input into imported apparel and and jewelry. The association’s stated
footwear has significantly increased. mission is to strengthen the influence
In addition to tariff assistance for the and success of US designers globally.
industry at the downstream level, The CFDA reaches this end through a
Fashion Designers benefit from variety of initiatives, programs and
assistance from the Council of Fashion funds all aimed at supporting the
Designers of America (CFDA). The community and providing funds to
CFDA is a not-for-profit trade enable growth wherever possible.
Key Statistics
Industry Data Industry Consumer
Revenue Value Added Establish- Wages Domestic spending
($m) ($m) ments Enterprises Employment Exports Imports ($m) Demand ($b)
2009 1,449.9 658.1 13,923 13,904 19,358 -- -- 562.4 N/A 9,847.0
2010 1,512.2 648.5 15,426 15,407 20,843 -- -- 627.3 N/A 10,036.3
2011 1,830.1 865.9 16,142 16,122 22,380 -- -- 715.8 N/A 10,263.5
2012 2,106.6 966.5 16,441 16,425 22,974 -- -- 743.1 N/A 10,413.2
2013 2,035.1 875.5 16,122 16,107 22,050 -- -- 688.3 N/A 10,565.4
2014 2,398.1 1,051.3 17,439 17,422 24,090 -- -- 756.4 N/A 10,868.4
2015 2,433.2 1,167.0 18,360 18,319 25,222 -- -- 845.9 N/A 11,264.3
2016 2,583.1 1,165.3 20,321 20,185 27,254 -- -- 870.8 N/A 11,572.1
2017 2,664.1 1,107.9 21,085 20,951 28,184 -- -- 902.8 N/A 11,878.8
2018 2,709.9 1,216.1 21,963 21,856 28,964 -- -- 927.4 N/A 12,165.8
2019 2,750.1 1,241.3 22,671 22,586 29,669 -- -- 949.6 N/A 12,421.3
2020 2,789.3 1,265.0 23,433 23,374 30,319 -- -- 970.3 N/A 12,620.1
2021 2,831.3 1,288.7 24,009 23,963 30,915 -- -- 990.0 N/A 12,822.0
2022 2,876.8 1,315.5 25,101 25,099 31,830 -- -- 1,018.2 N/A 13,014.3
2023 2,938.2 1,347.5 25,752 25,747 32,571 -- -- 1,043.7 N/A 13,292.9
Sector Rank 67/85 70/85 37/85 37/85 54/85 N/A N/A 68/85 N/A N/A
Economy Rank 1658/2235 988/1572 465/2235 437/2235 1202/2235 N/A N/A 1359/2235 N/A N/A
Figures are in inflation-adjusted 2018 dollars. Rank refers to 2018 data. SOURCE: WWW.IBISWORLD.COM
Liquidity Ratios
Current Ratio 1.7 1.4 1.7 1.5 2.2 1.2 n/a
Quick Ratio 1.5 1.2 1.2 1.2 1.3 1.0 n/a
Sales / Receivables (Trade Receivables
Turnover) 7.5 7.7 12.1 7.4 26.0 6.4 n/a
Days’ Receivables 48.7 47.4 30.2 49.3 14.0 57.0 n/a
Cost of Sales / Inventory (Inventory Turnover) n/c n/c n/c 82.5 53.7 228.9 n/a
Days’ Inventory n/a n/a 0.8 4.4 6.8 1.6 n/a
Cost of Sales / Payables (Payables Turnover) 14.1 11.3 26.9 16.3 24.5 11.9 n/a
Days’ Payables 25.9 32.3 13.6 22.4 14.9 30.7 n/a
Sales / Working Capital 10.7 15.9 17.0 17.9 12.9 21.5 n/a
Coverage Ratios
Earnings Before Interest & Taxes (EBIT) /
Interest 9.5 10.1 11.6 7.9 16.1 5.3 n/a
Net Profit + Dep., Depletion, Amort. / Current
Maturities LT Debt 2.5 n/a 4.8 n/a n/a n/a n/a
Leverage Ratios
Fixed Assets / Net Worth 0.8 0.7 0.8 0.5 0.4 0.6 n/a
Debt / Net Worth 2.6 3.6 1.8 2.1 1.3 3.5 n/a
Tangible Net Worth 32.1 17.6 26.0 23.1 29.6 17.3 n/a
Operating Ratios
Profit before Taxes / Net Worth, % 30.7 68.7 47.1 51.6 61.7 33.8 n/a
Profit before Taxes / Total Assets, % 12.5 15.4 17.2 13.4 24.1 6.7 n/a
Sales / Net Fixed Assets 20.1 26.3 20.1 26.8 32.3 26.7 n/a
Sales / Total Assets (Asset Turnover) 2.6 3.0 3.2 2.6 3.1 2.4 n/a
Assets, %
Cash & Equivalents 17.0 17.6 17.1 21.0 25.3 17.0 n/a
Trade Receivables (net) 34.4 31.8 29.2 28.5 21.2 37.3 n/a
Inventory 9.7 8.4 10.1 10.1 11.4 8.6 n/a
All Other Current Assets 2.3 6.2 2.3 4.0 2.2 6.3 n/a
Total Current Assets 63.4 64.1 58.7 63.7 60.1 69.2 n/a
Fixed Assets (net) 21.4 20.2 23.6 16.5 19.4 13.6 n/a
Intangibles (net) 8.4 7.6 10.9 14.0 13.2 12.9 n/a
All Other Non-Current Assets 6.8 8.1 6.8 5.8 7.3 4.3 n/a
Total Assets 100.0 100.0 100.0 100.0 100.0 100.0 n/a
Total Assets ($m) 399.1 413.3 429.2 388.1 26.9 242.3 118.9
Liabilities, %
Notes Payable-Short Term 9.7 20.6 20.6 13.3 15.0 12.1 n/a
Current Maturities L/T/D 2.2 1.9 1.6 3.9 5.6 1.9 n/a
Trade Payables 13.5 19.3 9.9 14.7 11.9 18.1 n/a
Income Taxes Payable 0.5 0.8 0.5 0.1 n/a 0.2 n/a
All Other Current Liabilities 13.2 16.6 11.7 14.5 8.7 21.9 n/a
Total Current Liabilities 39.0 59.2 44.3 46.5 41.2 54.0 n/a
Long Term Debt 16.8 10.9 12.5 12.2 14.3 8.1 n/a
Deferred Taxes 0.5 0.5 0.4 1.1 n/a 2.4 n/a
All Other Non-Current Liabilities 3.2 4.1 6.0 3.2 1.7 5.2 n/a
Net Worth 40.5 25.2 36.9 37.1 42.8 30.2 n/a
Total Liabilities & Net Worth ($m) 399.1 413.3 429.2 388.1 26.9 242.3 118.9
Source: RMA Annual Statement Studies, rmahq.org. RMA data for all industries is derived directly from more
than 260,000 statements of member financial institutions’ borrowers and prospects.
Note: For a full description of the ratios refer to the Key Statistics chapter online.
Industry Jargon DESIGN HOUSEA group of designers working under FASHION HOUSEA company that hires and houses
the same brand. fashion designers to create apparel and accessories for a
DIFFUSION LINEA moderately priced clothing line specific brand.
offered by traditional designers. These lines are often FAST FASHIONA term that refers to clothing collections
targeted toward the younger demographic and the that are based on the latest runway trends.
aspirational shopper.
IBISWorld Glossary BARRIERS TO ENTRYHigh barriers to entry mean that INDUSTRY REVENUEThe total sales of industry goods
new companies struggle to enter an industry, while low and services (exclusive of excise and sales tax); subsidies
barriers mean it is easy for new companies to enter an on production; all other operating income from outside
industry. the firm (such as commission income, repair and service
CAPITAL INTENSITYCompares the amount of money income, and rent, leasing and hiring income); and
spent on capital (plant, machinery and equipment) with capital work done by rental or lease. Receipts from
that spent on labor. IBISWorld uses the ratio of interest royalties, dividends and the sale of fixed
depreciation to wages as a proxy for capital intensity. High tangible assets are excluded.
capital intensity is more than $0.333 of capital to $1 of INDUSTRY VALUE ADDED (IVA)The market value of
labor; medium is $0.125 to $0.333 of capital to $1 of labor; goods and services produced by the industry minus the
low is less than $0.125 of capital for every $1 of labor. cost of goods and services used in production. IVA is
CONSTANT PRICESThe dollar figures in the Key Statistics also described as the industry’s contribution to GDP, or
table, including forecasts, are adjusted for inflation using profit plus wages and depreciation.
the current year (i.e. year published) as the base year. This INTERNATIONAL TRADEThe level of international
removes the impact of changes in the purchasing power of trade is determined by ratios of exports to revenue and
the dollar, leaving only the “real” growth or decline in imports to domestic demand. For exports/revenue: low is
industry metrics. The inflation adjustments in IBISWorld’s less than 5%, medium is 5% to 20%, and high is more
reports are made using the US Bureau of Economic than 20%. Imports/domestic demand: low is less than
Analysis’ implicit GDP price deflator. 5%, medium is 5% to 35%, and high is more than
DOMESTIC DEMANDSpending on industry goods and 35%.
services within the United States, regardless of their LIFE CYCLEAll industries go through periods of growth,
country of origin. It is derived by adding imports to maturity and decline. IBISWorld determines an
industry revenue, and then subtracting exports. industry’s life cycle by considering its growth rate
EMPLOYMENTThe number of permanent, part-time, (measured by IVA) compared with GDP; the growth rate
temporary and seasonal employees, working proprietors, of the number of establishments; the amount of change
partners, managers and executives within the industry. the industry’s products are undergoing; the rate of
technological change; and the level of customer
ENTERPRISEA division that is separately managed and
acceptance of industry products and services.
keeps management accounts. Each enterprise consists
of one or more establishments that are under common NONEMPLOYING ESTABLISHMENTBusinesses with
ownership or control. no paid employment or payroll, also known as
nonemployers. These are mostly set up by self-employed
ESTABLISHMENTThe smallest type of accounting unit
individuals.
within an enterprise, an establishment is a single
physical location where business is conducted or where PROFITIBISWorld uses earnings before interest and tax
services or industrial operations are performed. Multiple (EBIT) as an indicator of a company’s profitability. It is
establishments under common control make up an calculated as revenue minus expenses, excluding
enterprise. interest and tax.
EXPORTSTotal value of industry goods and services sold VOLATILITYThe level of volatility is determined by
by US companies to customers abroad. averaging the absolute change in revenue in each of the
past five years. Volatility levels: very high is more than
IMPORTSTotal value of industry goods and services
±20%; high volatility is ±10% to ±20%; moderate
brought in from foreign countries to be sold in the
volatility is ±3% to ±10%; and low volatility is less than
United States.
±3%.
INDUSTRY CONCENTRATIONAn indicator of the
WAGESThe gross total wages and salaries of all
dominance of the top four players in an industry.
employees in the industry. The cost of benefits is also
Concentration is considered high if the top players
included in this figure.
account for more than 70% of industry revenue.
Medium is 40% to 70% of industry revenue. Low is less
than 40%.
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