When you think about the world of high fashion, profit margins and balance sheets are hardly the first things to spring to mind.
Making the right investment decisions in this field can be difficult, when you also consider that the big fashion houses often seem perfectly happy to sacrifice their potential profits for the sake of maintaining prestige.
A lucrative area
Fashion is still, however, an increasingly good investment option, with retail businesses seeing increased returns because of the seemingly insatiable public demand for luxury clothing and accessories.
Companies with a worldwide appeal, such as Dior, Ossie Clark and Norman Hartnell, make attractive investment targets because they are masters of the fashion world. Wherever they lead, the money will surely follow. Most of their products increase greatly and have a worldwide appeal. In vintage there is a typical year-on-year uplift of 10 to 20%.
Things to look out for
The three main things you need to look out for when identifying fashion items for investment is that they have designer labels attached, that they have not been altered or improved in any way, and that they are in excellent condition. (They need no repairs.)
If a garment has a history, then that is an added bonus. If Daphne Guinness or Audrey Hepburn has at some time owned or, better still, worn it, then that makes the item even more collectible and valuable in the long term.
Retail industry investment
The recent massive boom in e-commerce has powered retail industry business ventures, all driven by the continued demand by the public for top fashion items. If you would prefer to invest in such businesses rather than in the items themselves, now is a good time to make a start.
Advice
Investment companies like Fortress Investment Group can be valuable resources when you are considering diversifying your portfolio into areas such as fashion. They have considerable experience in advising multinational companies and individuals on this and other investment matters, and you can find out more by going to this Wesley Edens on Wikipedia link.
Summary
The continued demand for fashion in all its forms makes this a good area for expanding any investment portfolio. The advice is generally to look to the big fashion houses such as Versace, Dolce and Gabbana, and Chanel; and if you are buying items and looking for a good return in the long term, then above all else avoid actually wearing them.
