Fashion Designer Fashion Business & Brand Management

Question 1

What is 'wholesale' and 'retail' in the fashion supply chain?

Accepted Answer

Wholesale is the sale of goods in large quantities to retailers or resellers at lower per-unit prices; retail is the sale of individual units directly to end consumers at marked-up prices

Answer

Wholesale is selling directly to consumers; retail is selling to other businesses

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They are two names for the same transaction type

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Wholesale applies only to fabrics; retail only to finished garments

Question 2

What does 'vertical integration' mean in the fashion industry context?

Accepted Answer

When a company controls multiple stages of its supply chain: design, manufacturing, distribution, and retail, rather than outsourcing each stage to separate companies

Answer

A style of visual merchandising using vertical display fixtures

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A management hierarchy structure in fashion companies

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A fabric pattern that uses vertical lines for slimming effects

Question 3

What is a 'line sheet' in fashion wholesale and what information does it contain?

Accepted Answer

A sales document showing all styles in a collection with style numbers, descriptions, available colors, size ranges, wholesale prices, and minimum order quantities

Answer

A document listing all employees in a fashion design studio

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A technical specification for pattern grading across sizes

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A press release describing a brand's new collection narrative

Question 4

What is 'intellectual property' (IP) in fashion design and which forms of IP protection are most commonly used?

Accepted Answer

IP in fashion includes trademarks (brand names, logos), trade dress (distinctive design elements), copyright (original prints and artwork), and patents (functional design innovations)

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IP in fashion refers to proprietary manufacturing machinery

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IP protection is not applicable to fashion because clothing is functional

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Only large luxury houses can claim IP protection; small designers have no recourse

Question 5

What is the difference between 'licensing' and 'franchising' in luxury fashion brand expansion?

Accepted Answer

Licensing grants a third party rights to produce and sell products under a brand name in exchange for royalties; franchising grants operational rights to run a business under a brand's model and brand standards in exchange for fees and a percentage of revenue

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They are identical business arrangements

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Licensing applies to manufacturing rights only; franchising to retail rights only

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Only licensing requires a financial payment; franchising is a creative partnership

Question 6

What is 'loss leader' strategy in fashion retail and how do brands use it?

Accepted Answer

Offering a product at below-cost or minimal margin to attract customers into the brand ecosystem, where they purchase higher-margin items

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Selling damaged or defective items at reduced prices to clear inventory

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A strategy of focusing only on low-cost items to build market share

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Closing stores that operate at a loss to improve company profitability