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COM Fashion Designers in the USMarch 2018   1

Work the runway: Growing diffusion lines and

designer collaborations will boost industry revenue
This report was provided to
Ryerson University (2128964422)
by IBISWorld on 13 May 2018 in accordance with their licence agreement with IBISWorld

IBISWorld Industry Report 54149

Fashion Designers in the US
March 2018 Claire O’Connor

2 About this Industry 17 International Trade 29 Key Statistics

2 Industry Definition
2 Main Activities
2 Similar Industries
3 Additional Resources
4 Industry at a Glance
5 Industry Performance
5 Executive Summary
5 Key External Drivers
7 Current Performance
9 Industry Outlook
11 Industry Life Cycle
13 Products & Markets
13 Supply Chain
13 Products & Services
15 Demand Determinants
15 Major Markets
18 Business Locations 29 Industry Data
29 Annual Change
20 Competitive Landscape 29 Key Ratios
20 Market Share Concentration 30 Industry Financial Ratios
20 Key Success Factors
20 Cost Structure Benchmarks 31 Jargon & Glossary
22 Basis of Competition
23 Barriers to Entry
23 Industry Globalization
24 Major Companies
25 Operating Conditions
25 Capital Intensity
26 Technology & Systems
26 Revenue Volatility
27 Regulation & Policy
27 Industry Assistance

www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com

WWW.IBISWORLD.COM Fashion Designers in the USMarch 2018   2

About this Industry

Industry Definition This industry comprises establishments
that provide professional design services
for such products and segments as
fashion, clothing, shoes, textiles, fur,
jewelry, costumes, lighting and floats.
These services occasionally represent
the design branch of a large retail chain,
but they more often represent smaller
design houses that provide fashion
products to several different sellers. This
industry does not include in-house
design services.

Main Activities The primary activities of this industry are

Clothing design services
Costume design services (except independent theatrical costume designers)
Fashion design services
Float design services
Jewelry design services
Shoe design services
Textile design services

The major products and services in this industry are

Fashion clothing design
Footwear design
Jewelry and accessory design
Textile design
Other 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.

33991 Jewelry Manufacturing in the US

Establishments in this industry manufacture jewelry or silverware using precious or semi-precious metals and
stones.

54141 Interior Designers in the US

Establishments in this industry design architectural interiors and their furnishings.

54142 Industrial Designers in the US

Establishments in this industry primarily develop designs and specification for mass-produced products.

54143 Graphic Designers in the US

Establishments in this industry plan, design and manage the production of visual communication to convey
specific messages, clarify complex information or project visual identities.

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About this Industry

Additional Resources For additional information on this industry

www.cfda.com
Council of Fashion Designers of America
www.dexigner.com
Dexigner News
www.fibre2fashion.com
Fibre2Fashion News

IBISWorld writes over 1000 US

industry reports, which are updated
up to four times a year. To see all
reports, go towww.ibisworld.com

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WWW.IBISWORLD.COM Fashion Designers in the US March 2018   4

Industry at a Glance
Fashion Designers in 2018

Key Statistics Revenue Annual Growth 13–18 Annual Growth 18–23

Snapshot
$2.7bn 1.6% 5.9%
Profit Wages Businesses

$257.4m $927.4m 21,856

Revenue vs. employment growth Demand from clothing and clothing
Market Share accessories stores
There are no major 25 5
players in this 20 4
industry
15 3
% change

% 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
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Industry Structure Life Cycle Stage Mature Regulation Level Light

Revenue Volatility Medium Technology Change Medium
Capital Intensity Low Barriers to Entry Low
Industry Assistance None Industry Globalization Medium
Concentration Level Low Competition Level High

FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 29

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Industry Performance
Executive Summary   |   Key External Drivers   |   Current Performance
Industry Outlook   |   Life Cycle Stage
Executive The Fashion Designers industry has
Summary trended upward as the economy has
strengthened. Increased consumer
confidence and favorable industry
conditions have created mass appeal in
this previously elite industry. Moreover,
fashion designers have discovered
innovative ways to market and sell their
creations. Designer collaborations with
mass merchants, such as Target and
H&M, have been at the forefront of the
market’s expansion. These retailers carry
specially designed, lower-priced pieces
for a limited time, capturing a
The
increasing visibility and accessibility of
fashion will bode well for industry participants
demographic that is younger and more
price conscious. In addition, demand
from other clothing and accessories
stores has also increased over the past
five years. Consequently, over the five
years to 2018, industry revenue is
expected to grow at an annualized rate of
5.9%. In 2018, industry revenue is
expected to increase 1.7% to $2.7 billion.
While the industry grew as a whole,
not all industry players grew equally.
Established designers that contracted
their services to large retailers benefited
the most over the past five years. Smaller
Key External Drivers Demand from clothing and
clothing accessories stores
Clothing and clothing accessories stores
are the largest sources of revenue for the
Fashion Designers industry. Any change
in demand for the stores’ products also
alters demand at the design level. The
growing focus on fast fashion (low-priced
iterations of runway styles that are
delivered to consumers within a short
time span) has increased demand for this
industry’s services. Demand from
Provided to: Ryerson University (2128964422) | 13 May 2018
Fashion Designers in the USMarch 2018   5
designers have had to establish local
niche markets to attain lucrative
contracts. As in most industries,
independent contractors operate in this
industry with varying degrees of success.
Less-established designers experience
more volatility in demand for their
services. Even so, the gradual increase in
consumer confidence and per capita
disposable income has enabled both
small and large operators to become
more profitable over the five years to
2018. Profit is expected to account for
9.5% in 2018, down from an estimated
8.2% in 2013.
Over the five years to 2023, industry
revenue is anticipated to grow at an
annualized rate of 1.6% to $2.9 billion.
The increasing visibility and accessibility
of fashion will bode well for industry
participants as consumers’ budgetary
constraints diminish. Additionally,
demand from clothing and accessories
stores is expected to increase, furthering
demand for design services.
Collaborations with fast-fashion outlets
are expected to remain a mainstay of the
industry, attracting a growing proportion
of the population and enabling for
steadier revenue streams. To maintain
industry growth in the future, designers
must continue focusing on new business
models and design processes that attract
mass appeal.
clothing and clothing accessories stores is
expected to grow in 2018, creating a
potential opportunity for the industry.
Per capita disposable income
Per capita disposable income determines
the amount of money that consumers
have to spend on products designed by
this industry. The discretionary nature of
design services makes them dependent
on consumers’ ability to purchase goods
outside of their scope of necessity. Per
WWW.IBISWORLD.COM Fashion Designers in the USMarch 2018   6

Industry Performance

Key External Drivers capita disposable income is expected to
continued increase in 2018.
Demand from jewelry stores
Demand for trendy and fashionable
jewelry determines the need for design
services within this segment. As
consumers increasingly place more value
on modern designs over classical pieces,
demand for design services will grow.
The Jewelry Stores industry is expected
to grow in 2018.
Corporate profit
Corporate profit is earned across all
industries, after inventory valuation and
capital consumption adjustments. An
increase in corporate profit will generally
drive large retail corporations to spend
on projects, such as designer
collaboration lines, which boost industry
revenue. Conversely, when corporate
profit decreases, retailers are less likely to
market such projects. In 2018, corporate
profit is expected to increase.
Demand from shoe and
footwear manufacturing
Footwear manufacturers’ demand for
design services affects industry revenue
as this market accounts for significant
portion of total industry revenue.
Designers introduce new shoe styles each
season and, much like the clothing sector,
the trend within the footwear segment
has been toward fast fashion. Moreover,
footwear manufacturing continues to be
outsourced to low-cost producers
overseas. The Shoe and Footwear
Manufacturing industry is expected to
decrease in 2018, posing a potential
threat to the industry.

Demand from clothing and clothing Per capita disposable income

accessories stores
5 4

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

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Industry Performance
Current Over the past five years, the Fashion
Designers industry has grown steadily.
Performance Industry operators provide professional
design services to a variety of clients in
the fashion, apparel, shoe, jewelry and
costume industries. When it comes to
fashion, many consumers desire an
optimal balance between value, quality
and style. In past decades, it took
extended amounts of time before
runway styles carried over to
department stores. Fashion-savvy
shoppers had to pay high premiums for
trendy designer outfits. Even as
incomes increased during the economic
recovery, consumers still demanded
stylish pieces but were intimidated by
high prices. Over the past five years,
designers and retailers have started
closing the gap between style and value
to appeal to massive amounts of
consumers. As a result, demand for
Trending now As consumer confidence increased,
individuals became more willing to
purchase nonessential items, such as
furniture and luxury clothing. Rising
demand for high-end clothing, accessories
and jewelry has significantly benefited the
Fashion Designers industry. Large retailers,
such as Target, Kohl’s, JCrew and H&M,
began introducing collaborative reasonably
priced fashion lines with popular fashion
designers. Even though designer
collaborations have occurred for decades,
they surged in popularity in recent years;
some notable collaborations include
Alexander Wang for H&M and Lilly
Pulitzer and Victoria Beckham for Target.
These relationships work not just as an
engine of monetary gain for large retailers,
but also to bring lesser-known designers
and their collections to the attention of a
much broader base than they otherwise
would have reached.
For fashion designers, demand from
clothing and accessories stores is a
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Fashion Designers in the USMarch 2018   7
Industry revenue
25
20
15
% change
10
5
0
-5
Year 10 12 14 16 18 20 22 24
SOURCE: WWW.IBISWORLD.COM
fashion and other specialized design
services increased during the period.
Over the five years to 2018, industry
revenue is expected to rise at an
annualized rate of 5.9% to $2.7 billion,
including a 1.7% increase in 2018 alone.
crucial factor for success. Over the five
years to 2018, demand from these stores
is expected to increase an annualized
0.4% due to increased consumer
confidence and disposable incomes. The
increase in demand has enabled fashion
designers to obtain increasing amounts
of lucrative contractual work. In
particular, fast-fashion outlets, such as
Zara and Forever21, have also increased
in popularity over the past five years due
to their ability to cost-effectively transfer
runway styles from elite fashion shows to
retail locations within weeks. Fast-
fashion retailers make chic apparel both
accessible and attractive to massive
amounts of consumers. Although many
fast-fashion retailers employ in-house
designers, their business model has
increased demand for fashion design
services over the past five years.
Social media and mobile apps have
also contributed to industry growth over
the past five years. Websites such as
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Industry Performance
Trending now Pinterest and e-commerce platforms such
continued as Etsy enable smaller designers to both
showcase their designs and draw
potential new clients. Etsy, in particular,
helps designers that serve niche markets
by connecting them to consumers in
locations previously inaccessible.
Moreover, the increasing number and
Industry landscape The Fashion Designers industry often
follows similar trends to the overall
clothing and accessories retail market;
however, since the industry is
characterized by a large number of
nonemployers, certain elements in
these industries differ. Nonemployers
in this industry are single-person
enterprises that contract design work
for larger operators or individual
clients. Over the five years to 2018,
industry employment is expected to
increase an annualized 5.6% to 28,964
workers. Industry enterprise growth is
expected to follow a similar trend
because the majority of these workers
are nonemployers. Over the five-year
period, the number of operators is
expected to rise an annualized 6.3% to
21,856 enterprises in 2018.
The assortment of clients and services
offered in this industry means that
industry operators also come in a wide
Provided to: Ryerson University (2128964422) | 13 May 2018
Fashion Designers in the USMarch 2018   8
popularity of fashion blogs have also
helped industry operators. Bloggers such
as Chiara Ferragni and Aimee Song have
surpassed fashion powerhouses such as
Elle and Vogue in social media following.
The growing number of fashion blogs
enable smaller designers to gain exposure
and attract new clientele.
Theassortment of services
offered in this industry
means that operators are
also diverse
variety. Operators in this industry
include anyone from a small-town
designer contracted to create a custom
wedding dress to large names, such as
Alexander McQueen, hired to design a
mass-produced line for Target. Therefore,
profit margins vary significantly between
operators. Despite the disparity, average
industry profit has increased steadily
over the past five years from 8.2% in
2013 to 9.5% in 2018. While, the period
has been characterized by rising demand
for industry services and falling cotton
prices, profit growth has been mitigated
by increasing wages.
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Industry Performance
Industry Over the five years to 2023, the Fashion
Designers industry is poised for further
Outlook growth. Industry revenue will benefit
from rising per capita disposable income
and increased consumer confidence; it
will also be aided by downstream apparel
manufacturing industries. As consumers
demand trendier yet reasonably priced
items, department stores will continue
collaborating with designers to create
Fast-fashion forward The trend of designer collaborations with
low-cost outlets has revolutionized the
industry and is expected to continue with
greater intensity over the next five years.
As collaborations have popularized,
consumers have expected stores like
Target and H&M to release periodic lines
associated with the names of popular
designers and celebrities. These
collections are expected to become firm
fixtures in most mainstays of affordable
fashion over the next five years. The
increased amount of designer
collaborations is expected to boost
industry revenue over the next five years.
Fast-fashion outlets are also expected
to increase in popularity over the next
five years. As runway trends become
increasingly visible through the internet
and social media platforms, consumers
will expect to see similar, less-expensive
items in stores such as Zara, H&M and
Forever21. Fast fashion will continue to
boost fashion designer revenue as
consumers demand quick runway to
retail turnaround.
Advancements in technology and the
globalization of the fashion sector have
been integral factors supporting growth
in the Fashion Designers industry for
the past decade. These features will
Provided to: Ryerson University (2128964422) | 13 May 2018
Fashion Designers in the USMarch 2018   9
product lines with mass appeal.
Additionally, as the fast-fashion retail
model continues to flourish, retailers will
require more designer services to quickly
replicate looks from New York Fashion
Week and other highly visible
international fashion shows. These
factors will propel industry growth at a
projected annualized rate of 1.6% to $2.9
billion over the five years to 2023.
Thetrend of designer
collaborations with
low-cost outlets has
revolutionized the industry
continue to underpin industry expansion
over the five years to 2023. By using the
internet and other electronic forums for
fashion design and trends, relatively
small-scale independent designers will
likely expand market thresholds beyond
state and national boundaries. In
addition, the industry is forecast to
continue capturing an increasing share
of the local designer market, as the
number of industry nonemployers
continues to rise. This signifies growth
in small-scale businesses; it also means
more contract work is being done for
larger fashion outlets or that many new
fashion lines are emerging. The
increasing number of nonemployers is
expected to boost overall industry
employment an annualized 2.4% to
32,571 workers in 2023. Similarly, over
the next five years, the number of
operators is expected to grow an
annualized 3.3% to 25,747 operators.
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Industry Performance
Industry landscape Fashion design is a relatively high-profit
activity. Industry operators make
functional and aesthetically pleasing
designs for clothing, jewelry and
accessories out of raw inputs, such as
fabric, precious metals and leather. The
value added to the initial input is
significant, which translates into high
profit margins for many industry
operators. As the economy continues to
expand and trends such as collaborations
and fast fashion propel the industry
forward, profit margins are expected to
remain stable. Profit is projected to
decline only slightly over the next five
years, falling from 9.5% of revenue in
2018 to 9.1% in 2023. The continued
increase in consumer confidence and per
capita disposable income will benefit both
large and small operators in this industry.
While the popularity of fast fashion and
department store designer collaborations
are expected to benefit established
designers, the health of local economies
Provided to: Ryerson University (2128964422) | 13 May 2018
Fashion Designers in the USMarch 2018   10
Fashiondesign is a
relatively high-profit
activity
will help smaller scale designers as more
individuals and small businesses become
willing to contract design services.
As the global economy continues to
grow, international demand for designs
created in the United States will
strengthen. Domestic designers are
expected to steadily capture an increasing
share of the global fashion design
markets (e.g. apparel, footwear and
jewelry) while retaining their position in
the US market. While the production of
clothing and accessories will likely
continue to move offshore to low-wage
countries in Asia (and potentially Africa),
the design process remains a core and
vital function to product development
and will be kept local.
WWW.IBISWORLD.COM Fashion Designers in the USMarch 2018   11

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

20 Maturity Quality Growth

% Growth in share of economy

Key Features of a Mature Industry

Company High growth in economic
consolidation; importance; weaker companies Revenue grows at same pace as economy
level of economic close down; developed Company numbers stabilize; M&A stage
importance stable technology and markets Established technology & processes
Total market acceptance of product & brand
15 Rationalization of low margin products & brands

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
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Industry Performance
Industry Life Cycle Industry value added (IVA), which
measures an industry’s contribution to
the overall economy, is forecast to
Thisindustry increase at an annualized rate of 4.4%
is M
 ature over the 10 years to 2023. Meanwhile, US
GDP is anticipated to grow an annualized
2.2% during the same period. While
growth faster than the economy normally
signifies an industry in the growth phase
of its industry life cycle, this is not the
case with the Fashion Designers industry.
The industry is in the mature phase of its
life cycle, and the exceptional growth in
IVA is largely due to the strong growth
early in the 10-year period. Fashion
design is a well-established profession
and is not expected to change drastically
in the future. This high growth is not
typical of the usually cyclical Fashion
Designers industry.
Industry demand relies heavily on
consumers’ economic wellbeing. Over the
past five years, consumer demand for
new labels and trends and designers’
accommodation of smaller pocketbooks
helped open new doors for fashion
designer services, a trend that is expected
to continue. The industry’s product lines
have expanded substantially, especially
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Fashion Designers in the USMarch 2018   12
within the women’s clothing segment.
The introduction of fast fashion in the
marketplace has created a new realm in
which designers can work. Previously
only available to high-end fashion
houses, these services are now trickling
down to common mall stores, such as
Forever 21, J Crew and Banana Republic,
which take the most recent runway
trends and interpret them for the middle-
income consumer.
Technological advancements in
communication and computer-aided
design have also contributed to the
industry’s growth. Technology has
enabled participants to expand across the
United States; once centered in New York
City, design services are expanding to
other metropolitan areas. The ease of
transferring ideas is also beneficial in
cutting production costs. Designers can
send their work to manufacturers in
low-cost Asian countries with the click of
a button. These prints then get turned
into physical manifestations of the design
and hit stores within a matter of weeks.
The low cost and high volume of this
fast-fashion movement have helped spur
industry growth.
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Products & Markets

Supply Chain   |   Products & Services   |   Demand Determinants
Major Markets   |   International Trade   |   Business Locations

Supply Chain KEY BUYING INDUSTRIES

31310 Textile Mills in the US
This industry demands textile design services.
31522 Men’s & Boys’ Apparel Manufacturing in the US
This industry demands clothing design services.
31524 Women’s, Girls’ and Infants’ Apparel Manufacturing in the US
This industry demands clothing design services.
31621 Shoe & Footwear Manufacturing in the US
This industry demands shoe design services.
31691 Leather Good & Luggage Manufacturing in the US
This industry demands accessory design services.
33991 Jewelry Manufacturing in the US
This industry demands jewelry design services.

KEY SELLING INDUSTRIES

21 Mining in the US
This industry supplies gold, other metals and gems used in jewelry production.
31310 Textile Mills in the US
This industry supplies textiles and fabrics used in garment production.
31611 Leather Tanning & Finishing in the US
This industry supplies finished hides, skins and furs used in shoe and accessory production.
42343 Computer & Packaged Software Wholesaling in the US
This industry supplies computer design equipment and printers.

Products & Services Products and services segmentation (2018)

3.1%
9.1% Textile design
Jewelry and accessory design

14.2%
Other design services
44.7%
Fashion clothing design

28.9%
Footwear design

Total $2.7bn SOURCE: WWW.IBISWORLD.COM

Clothing design tailoring and the creation of patterns,

The Fashion Designers industry represents the majority of industry
predominantly involves the design of revenue. Designers supply their services to
clothing. Clothing design, including direct clothing and textile manufacturers or to
designs sent to manufacturers, designs for specialized boutiques, retailers and

Provided to: Ryerson University (2128964422) | 13 May 2018

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Products & Markets
Products & Services individuals as they are contracted.
continued Operators in this segment create both
specialized designs for individuals and
general designs for mass production. For
example, in 2017, Victoria Beckham
created a line for Target, marking her first
mass-market collaboration. The line
included women’s wear and children’s
clothing. Additionally, in 2014 Alexander
Wang collaborated with Adidas to design a
collection to be sold in thousands of H&M
retail locations. Additionally, Alexander
Wang has also designed custom red carpet
looks for high profile clients, such as Miley
Cyrus and Nicki Minaj.
Fashion clothing design services have
grown as a portion of the industry,
currently representing 44.7% of revenue.
Fast fashion has placed an increasing
focus on mimicking designs from the
latest runway shows. Designers have been
contracted to fulfill growing demand for
various trends and even specific styles of
clothing. For example, retailers like
Forever 21, H&M and Topshop translate
fall runway trends to reality in a matter of
weeks; this turnaround increasingly
requires the industry’s services.
Other clothing design services include
the creation of undergarments, hosiery
and similar items. This segment is
relatively stable since these clothing
pieces are more essential and do not
follow volatile consumer taste patterns or
disposable income changes. Their growth
relies on volume rather than price.
Footwear design
Footwear design services account for
28.9% of industry revenue. This segment
includes athletic, formal, casual and
slipper designs. Many footwear designers
are under contract by specific
manufacturers, such as Nike or Jimmy
Choo. These designs are often outsourced
abroad to low-cost manufacturers to save
the contracting companies on labor and
input costs. As a result, demand for
footwear design services has waned over
Provided to: Ryerson University (2128964422) | 13 May 2018
Fashion Designers in the USMarch 2018   14
much of the period. However, consumers
have placed a higher value on fashionable
footwear, which has ultimately caused
the footwear designing segment to
marginally grow as a share of revenue.
Jewelry and accessory design
Jewelry and accessory design, which
currently accounts for 9.1% of revenue, is
an area of substantial growth. This
category includes the design of luxury
and costume jewelry, as well as the
design of accessories, such as handbags,
luggage, scarves and other nonclothing
items. The items in this category are
highly discretionary, so demand for
segment services is heavily dependent on
per capita disposable income and
consumer spending. As the economy
strengthened over the past five years,
more consumers have been willing to
spend on luxury jewelry and accessories.
Additionally, e-commerce sites such as
Etsy have enabled smaller jewelry
designers to reach more customers.
Textile design services
Textile design services make up 3.1% of
industry revenue and has increased its
share of revenue over the past five years.
Operators in this segment design various
fabrics and materials used in the
manufacturing of clothing and
accessories. Brands such as Vera Bradley,
Liberty London and Lilly Pulitzer have
popularized over the past few years due
to their unique fabrics and patterns. As
demand for high-end apparel increases,
fashion designers require unique fabrics
to stay current and edgy, resulting in
higher demand for textile design services.
Other design services
Other design services represent 14.2% of
industry revenue and include anything
from sports uniform and costume design
to parade float design. Operators in this
segment are usually very specialized and
serve especially niche markets.
WWW.IBISWORLD.COM
Products & Markets
Demand Demand for fashion design services is
Determinants closely tied to per capita disposable
income and overall consumer confidence.
While both of these variables continue to
increase as the economy recovers, demand
for design services also increases. The
greatest forces pushing industry demand
upward are consumer preferences for
trendy and fashionable designs in line
with current runway styles and
consumers’ ability to pay for these trends.
Affordable and attainable
Designer labels have become increasingly
available to middle-income consumers
for a variety of reasons. Aside from the
increased consumer confidence and
income, designers have adapted their
strategies to reach more consumers.
Fashion collaborations between top-
notch designers and large department
stores have made trendy clothing both
more affordable and attainable to less
Major Markets Major market segmentation (2018)
5.6%
Other markets
10.6%
Fashion houses
16.2%
Apparel manufacturers
17.5%
Individual consumers
Total $2.7bn
The Fashion Designers industry
generates revenue from a range of
downstream markets servicing fashion
demand in the United States and
globally. Since this industry does not
include in-house designers for major
Provided to: Ryerson University (2128964422) | 13 May 2018
Fashion Designers in the USMarch 2018   15
elite buyers. E-commerce platforms have
also enabled designer fashions and
services more available consumers,
driving industry demand. Consumers’
ability to afford and attain these fashions
has spurred demand for additional
designs and services in downstream
manufacturing and retailing industries.
The emergence of fast fashion has also
supported this growing demand. Fast
fashion describes styles that interpret the
most recent runway trends in low-priced
pieces made available to the mass
market. Retailers such as Forever 21,
H&M and Zara have grown exponentially
by making fast fashion the center of their
business models. Since the average
consumer can obtain designer runway
products via these fast-fashion retailers,
demand for the designs increases with
each Fashion Week. These designs earn
revenue by relying on volume of sales
rather than price or quality.
50.1%
Retailers and wholesalers
SOURCE: WWW.IBISWORLD.COM
brand names, almost all industry revenue
is earned through contracted operations.
Retailers and wholesalers
Retailers and wholesalers are the largest
market segment for the industry,
WWW.IBISWORLD.COM
Products & Markets
Major Markets accounting for 50.1% of total industry
continued revenue. This segment includes large
national-level clothing retail and
distribution companies, as well as small
locally operating boutiques. These
retailers require specific designs to be
sold in stores that attract certain types of
consumers. For this reason, they hire a
growing number of designers for a
greater number of service hours. Brands
such as H&M and Zara, which interpret
the latest runway trends into affordable
clothing pieces, have increased their
demand for design services over the past
five years.
Department stores also demand
designer services. While department
stores may not carry the newest trends
displayed at New York Fashion Week,
designer labels are starting to popularize
in these establishments. An example of
this is Target, which periodically
collaborates with popular designers,
including Lily Pulitzer, Alexander
McQueen and Victoria Beckham, to
create fashion-forward products with
mass appeal. Over the five years to 2018,
this segment’s share of revenue has
increased, as department store designer
collaborations and fast-fashion retailers
have grown in popularity.
Individuals
Individual consumers are the second-
largest market for industry services,
accounting for 17.5% in 2018. This
segment includes high net worth buyers
and celebrities that hire designers to
create custom fashion pieces for them.
This segment also includes individuals
who purchase custom-made designer
apparel and accessories online. The
increased accessibility of designers
caused this segment to grow over the past
five years. Individuals in this market
typically enlist designers to create pieces
Provided to: Ryerson University (2128964422) | 13 May 2018
Fashion Designers in the USMarch 2018   16
for special events, such as weddings and
galas. Over the five years to 2018, this
segment’s share of revenue has increased,
as the number of households earning
more than $100,000 per year has
increased from 24.5% of households in
2013 to 26.7% to 2018.
Apparel manufacturers
Apparel manufacturers are expected to
account for 16.2% of industry revenue in
2018. Businesses in this market contract
industry operators to design clothing
items for mass production. Over the past
five years, this segment’s share of revenue
has decreased in line with falling
domestic manufacturing activity. For
example, in the Women’s, Girls’ and
Infants’ Apparel Manufacturing industry
(IBISWorld report 31524) import
penetration has led to a 2.0% annualized
decline in revenue, as imports currently
satisfy 91.2% of domestic demand.
Fashion houses
Fashion houses such as Gucci and Marc
Jacobs often have their own in-house design
personnel to cater to a very specialized
high-end consumer and retain the label’s
image. Smaller fashion houses, however,
may hire design services to assist in creating
seasonal items. Fashion houses also contract
textile designers to create more unique and
fashion-forward items. Fashion house
contracts, with big and small labels, account
for 10.6% of revenue earned within the
Fashion Designers industry.
Other markets
Other markets account for 5.6% of industry
revenue. This segment encompasses any
other entity that demands specialized
design services. Over the past five years,
revenue from this segment has been steady
due to the wide variety of businesses that
fall in this category.
WWW.IBISWORLD.COM Fashion Designers in the USMarch 2018   17

Products & Markets

International Trade By convention, international trade is industry. However, international relations

recorded at the manufacturing level; are important to this industry because it
therefore, it is not counted in this has a high level of globalization.

Provided to: Ryerson University (2128964422) | 13 May 2018

 WWW.IBISWORLD.COM Fashion Designers in the USMarch 2018   18

Products & Markets

Business Locations 2018

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

Provided to: Ryerson University (2128964422) | 13 May 2018

WWW.IBISWORLD.COM
Products & Markets
Business Locations Almost two-thirds of the Fashion
Designers industry’s establishments are
located in just three states: New York,
California and Florida. New York has long
been the home of major designers, brand
labels and elite fashion schools. New York
also has the focal point for a great deal of
high-end retail outlets that the industry
has historically relied on. In total, New
York State comprises 26.4% of total
industry establishments. The Mid-Atlantic
region, with 33.2% of total establishments,
is therefore the preeminent region for the
industry in the United States.
The thriving art, entertainment and
fashion scene in Los Angles is a notable
factor behind the strong industry presence
in the West. Similar to New York, high
concentrations of designers and fashion
industry icons reside in Los Angeles. To
cater to entertainment industry demand,
many costume, fashion and more
specialized designers relocate to Los
Angeles. As a result, California is home to an
estimated 21.3% of industry establishments.
The Southeast, with the exception of
Miami, lacks large cultural centers such as
New York and Los Angeles, substantially
inhibiting industry growth in the region. In
2018, IBISWorld estimates the region is
home to 16.5% of industry establishments.
Designers have relatively little motivation
to establish their presence there because
they will achieve minimal exposure in the
industry compared with the two larger
industry hubs.
Provided to: Ryerson University (2128964422) | 13 May 2018
Fashion Designers in the USMarch 2018   19
Distribution of establishments vs. population
40
30
20
%
10
0
West
Great Lakes
Mid-Atlantic
New England
Plains
Rocky Mountains
Southeast
Southwest
Establishments
Population
SOURCE: WWW.IBISWORLD.COM
IBISWorld expects a modest and
gradual shift away from traditional
fashion centers over the coming years.
Improving communications technology
enables small designers to have their work
manufactured and distributed without as
great of a need for physical presence.
E-commerce websites such as Etsy and
Zazzle enable smaller-name designers to
sell their goods directly to consumers
without the need for a studio or storefront.
In the past, designers based in major
fashion centers such as New York or Los
Angeles turned to other regions of the
country for inspiration. Now, those areas
are raising designers of their own.
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
Concentration Fashion Designers industry is extremely
low. Nonemployers comprise 88.7% of
industry establishments and typically
Level
engage in contract or freelance activities.
Concentration in Additionally, 82.7% of employer
this industry is L ow establishments operate with one to four
workers. Over the past five years,
Key Success Factors Establishment of brand names
Designers that establish brand names in
apparel, footwear and other fashion
IBISWorld identifies markets can leverage their brand names
250 Key Success for further design recognition.
Factors for a
business. The most Adoption of a commercial focus
Designers must remain focused on the
important for this
commercial acceptance of their designs
industry are: and the requirements of their major
clients. Creativity, fashion sense and
advanced communication skills help
companies gain success.
Attractive product presentation
Industry players need to present detailed
and inspirational portfolios of designs.
Cost Structure Profit
Benchmarks Cost structures vary across different
designers depending on the products
they design and the markets to which
they sell. Profit can vary significantly for
industry participants because of the
highly diverse nature and scale of
operations within the industry. Well
established designers are generally more
profitable than smaller name operators
because their clientele are willing to pay
more for their reputable services. Overall,
average industry profit (measured in
earnings before interest and taxes) is
expected to reach 9.5% in 2018. Profit
has increased over the past five years as a
result of the recovering economy and a
rebound in overall spending on
Provided to: Ryerson University (2128964422) | 13 May 2018
Fashion Designers in the US March 2018   20
industry concentration has remained
relatively low and steady. Over the next
five years, market share concentration is
expected to increase slightly as fast
fashion and designer collaborations
become more popular. Even so, no single
operator is expected to account for more
than 5.0% of industry revenue.
These presentations use various media to
leave an effect on the potential client.
Ability to attract local
support/patronage
Successful designers can attract
patronage either professionally or
commercially based on the creativity
and acceptance of designs. This
patronage can pave the way to wider
market acceptance.
Prompt delivery to market
Designers need to work around time
sensitive projects from clients to keep
their loyalty. Designers also need to stay
ahead of changing fashion trends.
discretionary purchases. However, wage
expenses have increased over the past
five years, resulting from operators being
compensated by their artistic ability and
unique value-added. Although profit has
grown over the period, fluctuating input
costs have caused profit levels to rise
sporadically. For example, over the past
five years, the price of cotton has
experienced both double digit growth and
decline. Over the next five years, industry
profit is expected to remain fairly steady,
as the economy continues to grow and
the price of cotton is expected to stabilize.
Wages
Accounting for 34.2% of total industry
revenue, spending on labor represents the
WWW.IBISWORLD.COM Fashion Designers in the US March 2018   21

Competitive Landscape

Cost Structure largest expense for industry operators,
Benchmarks emphasizing the highly skilled and
labor-intensive nature of the industry.
continued
Most industry revenue is derived from the
application of skilled design services.
Wages have steadily increased as a share
of revenue, increasing from 33.8% in
2013, which is largely the result of
operators receiving compensation based
on their artistic skills and unique value-
added to the industry. Additionally, for
larger operators, industry wage costs
include payments to subcontracted labor
and fringe benefits paid to staff. To save
on this expense, some companies
regularly hire student interns during the
summer break and frequently use
freelance designers and part-time
employees on a subcontract basis.
Purchases
Purchasing costs are the second-largest
industry expense, but are significantly
less than wages, representing 19.2% of
revenue. Designers use inputs such as
fabric, leather and fasteners to craft
samples, which can be very costly
because of their high quality and
specialized nature. Purchase costs are
highly variable between designers
because most materials are purchased on
a per-project basis. Over the five years to
2018, purchasing costs have inched up as
a result of increasing prices from
upstream suppliers.
Rent and utilities
Rent and utilities are low, accounting
for 4.8% of total revenue. Workspaces
are generally small and usually consist
of a small office or studio space.
Additionally, at times, rent can even be
significantly lower, as workspaces for
nonemployers may even double as
living quarters. Companies often
minimize rental costs by sharing larger

Sector vs. Industry Costs

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

Provided to: Ryerson University (2128964422) | 13 May 2018

WWW.IBISWORLD.COM
Competitive Landscape
Cost Structure premises with complementary or
Benchmarks noncompeting enterprises.
continued
Other costs
Since the industry is highly labor-
intensive, depreciation only accounts for
1.2% of revenue. Depreciation costs
include investments into computers and
design software. Other costs include
marketing and advertising, which
account for 2.0% of revenue. While word
Basis of Competition Internal
Operators in the Fashion Designers
industry are up against extremely high
Level & Trend competition as they contend for a limited
 ompetition
C in number of viable clients and contracts.
this industry is Since the industry is so broad, the
Highand the trend competitive climate is very different for
the various types of operators. For
is I ncreasing
example, established designers with their
own brands and storefronts compete for
contracts with large retail chains and
more elite clientele. Conversely, freelance
designers compete with each other for
smaller scale operators, boutique shops
and more localized customers.
Holding formal qualifications from a
reputable university may enhance a
client’s perception of the designer’s
capacity to meet the design requirements,
but demonstrated creative skills are most
important for securing contracts.
Establishing and effectively catering to a
target market is also a competitive
Provided to: Ryerson University (2128964422) | 13 May 2018
Fashion Designers in the US March 2018   22
of mouth is arguably the most important
form of marketing, mobile and print
advertising are increasingly important
tools for building a brand name and
reaching consumers. Other industry
costs are high, accounting for 31.9% of
revenue. These costs include
administrative related expenses,
industry association membership fees
and legal and intellectual property
related costs.
advantage in this industry. Fashion
designers differentiate services based on
creative skills, proven experience and
self-marketing. Clients must also be
assured that the designer can meet their
prerequisites of timeliness, style and
budgetary constraints.
External
Designers in this industry contend with
a wide variety of external competition.
Small scale clothing, shoe and accessory
designers usually compete with larger
scale suppliers and retail stores that
offer lower prices. More established
designers in this industry usually
compete with in-house designers that
are already on staff at fashion houses
and retail chains. To compete with
in-house designers, operators in this
industry must differentiate themselves
by offering a unique portfolio and loyal
customer following.
WWW.IBISWORLD.COM
Competitive Landscape
Barriers to Entry A bachelor’s degree is generally required for
entry-level positions as a designer in a
Level & Trend fashion house, manufacturer or retailer.
Some designers also obtain postgraduate
 arriers to Entry
B certificates or master of fine arts degrees to
in this industry are enhance their qualifications and form
Lowand S  teady valuable connections within the industry.
While these formal qualifications may
enhance a person’s capacity to undertake
design work, formal qualifications are not
mandatory for entering the industry. For
fashion designers, an impressive portfolio is
usually a more valuable asset than a college
diploma. The industry is not subject to any
specific licensing or registration, other than
standard state-based requirements. A
designer’s success relies heavily on creativity
and an understanding of fashion and trends.
It’s not what you know
The capacity for new entrants to gain a
foothold in this market is constrained by
the existing relationships between
leading design houses and the major
clients. Retailers, such as high-fashion
department stores, commonly enter into
exclusive long-term arrangements with
labels to produce designs for apparel and
footwear sold through their stores.
Similarly, manufacturers sign licensing
arrangements to produce and market
designs. New entrants may come against
obstacles in attempting to break or
bypass existing exclusive arrangements.
Industry Globalization is a key component of the
Globalization fashion industry as a whole. For domestic
fashion designers and other operators in the
Fashion Designers industry, globalization is
Level & Trend present, but less critical. Since the industry
 lobalization
G in is composed of primarily nonemployers,
this industry is global reach is usually not a business focus.
Mediumand the Even so, fashion designers are able to
contract services and license designs to
trend is I ncreasing international buyers of various size and
scope. Computer and communications
technology also enables smaller-scale
Provided to: Ryerson University (2128964422) | 13 May 2018
Fashion Designers in the US March 2018   23
Barriers to Entry checklist
Competition High
Concentration Low
Life Cycle Stage Mature
Capital Intensity Low
Technology Change Medium
Regulation & Policy Light
Industry Assistance None
SOURCE: WWW.IBISWORLD.COM
Technological advancements may
enhance the capacity for new entrants to
promote their designs to clients. By using
the internet and social media platforms,
new designers may be able to
significantly lift their profile and display
their portfolio as an alternative to
existing designers. Similarly, new
designers may be able to display their
designs in fashion shows and magazines,
giving them global exposure and creating
an international market base.
Start-up costs in the industry are quite
low across all segments, with the possible
exception of jewelry design, as precious
stones and metals are expensive. Clothing
and footwear design can be conducted
with far less initial investment. Location
is also of little importance; however,
being in the same geographic region as
major retailers and high-profile clientele
may be beneficial.
designers to expand their presence on global
markets. Additionally, as designers become
more established, globalization becomes
increasingly important. Larger-scale US
designers have to compete for contracts with
foreign designers that offer similar
experiences and customer following.
IBISWorld expects that the industry will
experience increasing levels of globalization
over the next five years as the ease of global
communication increases and demand for
off-the-runway fashion grows.
WWW.IBISWORLD.COM
Major Companies
There are no Major Players in this industry   |   Other Companies
Other Companies The Fashion Designers industry is highly
fragmented. The majority of industry
operators are nonemployers that
contribute little to the overall industry
but, in total, comprise the majority of
industry revenue. IBISWorld defines a
major company as one that accounts for
at least 5.0% of industry revenue. As a
result, no single company holds a
significant market share. (Nonemployers
are anticipated to account for 88.7% of
Provided to: Ryerson University (2128964422) | 13 May 2018
Fashion Designers in the USMarch 2018   24
total industry establishments and 48.0%
of industry revenue in 2018. While many
admired designers collaborate with
large retail stores, there is no single
designer that contracts their services
enough to be considered a major
player in this industry. Most esteemed
designers earn their revenue from
their own storefronts rather than
contracting services to external
businesses and individuals.
WWW.IBISWORLD.COM Fashion Designers in the USMarch 2018   25

Operating Conditions
Capital Intensity   |   Technology & Systems   |   Revenue Volatility
Regulation & Policy   |   Industry Assistance

Capital Intensity The Fashion Designers industry is highly

labor intensive. The principal services Capital intensity
Capital units per labor unit
offered by this industry are based on
Level
creativity and understanding styles, design 0.5
The levelof capital principles, manufacturing practices and
intensity is L ow fashion trends. Designers are expected to 0.4

have a strong sense of aesthetics and must 0.3

be knowledgeable in materials and textiles.
Labor costs account for 34.2% of 0.2

industry revenue. The average annual 0.1

salary per employee is expected to be
$32,021 in 2018, up slightly from $31,214 0.0
Economy Professional, Fashion
in 2013. These high labor payments Scientific and Designers
Tech. Services
indicate the value placed on human Dotted line shows a high level of capital intensity
capital. In contrast, the average employer SOURCE: WWW.IBISWORLD.COM

only spends $0.04 of their revenue on

capital investments in 2018. next five years. Even though new
IBISWorld expects the industry to technology and systems save designers
remain labor intensive throughout the time and energy, design services require

Tools of the Trade: Growth Strategies for Success

New Age Economy Investment Economy

Recreation, Personal Services, Information, Communications,
Health and Education. Firms Mining, Finance and Real
benefit from personal wealth so Estate. To increase revenue
stable macroeconomic conditions firms need superior debt
are imperative. Brand awareness management, a stable
and niche labor skills are key to macroeconomic environment
product differentiation. and a sound investment plan.

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.

Change in Share of the Economy SOURCE: WWW.IBISWORLD.COM

Provided to: Ryerson University (2128964422) | 13 May 2018

WWW.IBISWORLD.COM
Operating Conditions
Capital Intensity a high level of creativity that cannot be
continued fabricated by a program or machine.
Even so, various systems and software
Technology & Systems The industry has been exposed to a
medium level of technological change over
Level the past two decades, stemming from
advancements in computer-aided design
The level
of (CAD) technology and the use of alternative
Technology Change media. Traditionally, industry participants
is M
 edium performed design work by hand,
progressing from original sketches to color
presentations and ultimately the precise
drafting of patterns for manufacturing.
While hand-drawn sketches still
prevail as the principal drafting
approach, much of the design process is
computerized. Designers increasingly use
customized design equipment and
software packages to generate drafts and
final products. The final format of the
designs can be supplied to clients across
a variety of media, using presentation
packages for 3D and 2D imaging, scale
and perspective. Since the mid-1990s, the
widespread availability of digital
technology has enabled some designers
to adopt an all-digital workflow,
generating digital images and text that
can be manipulated to meet client
specifications. Technological
Revenue Volatility Industry revenue reflects changing
fashion trends and the ability of
consumers to spend. The Fashion
Level
Designers industry has exhibited medium
The level of revenue volatility over the five years to
Volatility is M
 edium 2018. Industry revenue has grown as
much as 17.8% in 2014 and declined as
much as 3.4% in 2013. Improvements in
per capita disposable income and
consumer sentiment levels have enabled
Provided to: Ryerson University (2128964422) | 13 May 2018
Fashion Designers in the USMarch 2018   26
programs have become more prominent
and are expected to grow in popularity
over the next five years.
developments have generally lowered the
cost of CAD equipment and software and
sped up production capabilities.
According to Wohlers Report 2014,
global revenue for the 3D printing
industry is expected to increase from
$3.07 billion in 2013 to $21.0 billion in
2020. The growth of 3D printing will
affect various industries, including the
Fashion Designers industry. Designers
will be able to design jewelry, accessories
and countless other products very quickly
and easily. Although 3D printers are not
normally found in fashion design studios
now, they are expected to become more
common as they become more affordable
and accessible.
Social media and various mobile apps
have also made contributions to the
industry. While CAD technology and 3D
printing advance the production process,
social media and apps enable operators in
this industry to gain exposure and attract
new clients. E-commerce platforms, such
as Etsy, showcase smaller designers and
enable consumers to purchase items and
interact directly with the designer.
revenue to recover. Nevertheless,
designers are vulnerable to the declining
trend in local textile, clothing and
footwear manufacturing, and they are
exposed to competition for imported
fashion clothing and accessories.
Additionally, nonemployers in this
industry are subject to more volatile
operating conditions, as demand is more
variable and localized.
WWW.IBISWORLD.COM Fashion Designers in the USMarch 2018   27

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

Revenue volatility* (%)

strategic decisions, such as 100
the time frame for capital
investment. Fashion Designers
10
When a firm makes poor
investment decisions it
may face underutilized 1
capacity if demand
suddenly falls, or capacity 0.1 Stagnant Blue Chip
constraints if it rises –30 –10 10 30 50 70
quickly. Five-year annualized revenue growth (%)
* Axis is in logarithmic scale
SOURCE: WWW.IBISWORLD.COM

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

Provided to: Ryerson University (2128964422) | 13 May 2018

WWW.IBISWORLD.COM
Operating Conditions
Industry Assistance low-cost countries, but retaining design,
continued marketing and administration operations
in the United States. Therefore, local
design input into imported apparel and
footwear has significantly increased.
In addition to tariff assistance for the
industry at the downstream level,
Fashion Designers benefit from
assistance from the Council of Fashion
Designers of America (CFDA). The
CFDA is a not-for-profit trade
Provided to: Ryerson University (2128964422) | 13 May 2018
Fashion Designers in the USMarch 2018   28
association that includes about 500 of
the United States’ foremost designers of
menswear, womenswear, accessories
and jewelry. The association’s stated
mission is to strengthen the influence
and success of US designers globally.
The CFDA reaches this end through a
variety of initiatives, programs and
funds all aimed at supporting the
community and providing funds to
enable growth wherever possible.
WWW.IBISWORLD.COM Fashion Designers in the US March 2018   29

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

Annual Change Industry Establish- Domestic Consumer

Revenue Value Added ments Enterprises Employment Exports Imports Wages Demand spending
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
2010 4.3 -1.5 10.8 10.8 7.7 N/A N/A 11.5 N/A 1.9
2011 21.0 33.5 4.6 4.6 7.4 N/A N/A 14.1 N/A 2.3
2012 15.1 11.6 1.9 1.9 2.7 N/A N/A 3.8 N/A 1.5
2013 -3.4 -9.4 -1.9 -1.9 -4.0 N/A N/A -7.4 N/A 1.5
2014 17.8 20.1 8.2 8.2 9.3 N/A N/A 9.9 N/A 2.9
2015 1.5 11.0 5.3 5.1 4.7 N/A N/A 11.8 N/A 3.6
2016 6.2 -0.1 10.7 10.2 8.1 N/A N/A 2.9 N/A 2.7
2017 3.1 -4.9 3.8 3.8 3.4 N/A N/A 3.7 N/A 2.7
2018 1.7 9.8 4.2 4.3 2.8 N/A N/A 2.7 N/A 2.4
2019 1.5 2.1 3.2 3.3 2.4 N/A N/A 2.4 N/A 2.1
2020 1.4 1.9 3.4 3.5 2.2 N/A N/A 2.2 N/A 1.6
2021 1.5 1.9 2.5 2.5 2.0 N/A N/A 2.0 N/A 1.6
2022 1.6 2.1 4.5 4.7 3.0 N/A N/A 2.8 N/A 1.5
2023 2.1 2.4 2.6 2.6 2.3 N/A N/A 2.5 N/A 2.1
Sector Rank 67/85 4/85 20/85 18/85 39/85 N/A N/A 47/85 N/A N/A
Economy Rank 1321/2235 75/1572 321/2235 303/2235 648/2235 N/A N/A 796/2235 N/A N/A

Key Ratios Imports/ Exports/ Revenue per Share of the

IVA/Revenue Demand Revenue Employee Wages/Revenue Employees Average Wage Economy
(%) (%) (%) ($’000) (%) per Est. ($) (%)
2009 45.39 N/A N/A 74.90 38.79 1.39 29,052.59 0.00
2010 42.88 N/A N/A 72.55 41.48 1.35 30,096.44 0.00
2011 47.31 N/A N/A 81.77 39.11 1.39 31,983.91 0.01
2012 45.88 N/A N/A 91.69 35.27 1.40 32,345.26 0.01
2013 43.02 N/A N/A 92.29 33.82 1.37 31,215.42 0.01
2014 43.84 N/A N/A 99.55 31.54 1.38 31,398.92 0.01
2015 47.96 N/A N/A 96.47 34.76 1.37 33,538.18 0.01
2016 45.11 N/A N/A 94.78 33.71 1.34 31,951.27 0.01
2017 41.59 N/A N/A 94.53 33.89 1.34 32,032.36 0.01
2018 44.88 N/A N/A 93.56 34.22 1.32 32,019.06 0.01
2019 45.14 N/A N/A 92.69 34.53 1.31 32,006.47 0.01
2020 45.35 N/A N/A 92.00 34.79 1.29 32,003.03 0.01
2021 45.52 N/A N/A 91.58 34.97 1.29 32,023.29 0.01
2022 45.73 N/A N/A 90.38 35.39 1.27 31,988.69 0.01
2023 45.86 N/A N/A 90.21 35.52 1.26 32,043.84 0.01
Sector Rank 70/85 N/A N/A 71/85 63/85 78/85 72/85 70/85
Economy Rank 420/1572 N/A N/A 1911/2235 457/2235 2155/2235 1708/2235 988/1572

Figures are in inflation-adjusted 2018 dollars. Rank refers to 2018 data. SOURCE: WWW.IBISWORLD.COM

Provided to: Ryerson University (2128964422) | 13 May 2018

WWW.IBISWORLD.COM Fashion Designers in the US March 2018   30

Industry Financial Ratios

Apr 2016 - Mar 2017 by company revenue
Apr 2013 - Apr 2014 - Apr 2015 - Apr 2016 - Small Medium Large
Mar 2014 Mar 2015 Mar 2016 Mar 2017 (<$10m) ($10-50m) (>$50m)

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

Cash Flow & Debt Service Ratios (% of sales)

Cash from Trading 42.7 43.1 48.0 46.8 46.8 49.6 n/a
Cash after Operations 6.9 8.6 7.4 8.2 12.3 1.7 n/a
Net Cash after Operations 5.5 10.0 7.9 8.0 12.7 4.6 n/a
Cash after Debt Amortization 2.5 2.6 2.0 0.4 0.4 0.1 n/a
Debt Service P&I Coverage 5.7 6.6 5.4 2.0 13.7 0.9 n/a
Interest Coverage (Operating Cash) 8.6 12.6 12.1 5.0 15.1 2.1 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

Maximum Number of Statements Used 42 51 62 44 23 20 1

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.

Provided to: Ryerson University (2128964422) | 13 May 2018

WWW.IBISWORLD.COM
Jargon & Glossary
Industry Jargon DESIGN HOUSEA group of designers working under
the same brand.
DIFFUSION LINEA moderately priced clothing line
offered by traditional designers. These lines are often
targeted toward the younger demographic and the
aspirational shopper.
IBISWorld Glossary BARRIERS TO ENTRYHigh barriers to entry mean that
new companies struggle to enter an industry, while low
barriers mean it is easy for new companies to enter an
industry.
CAPITAL INTENSITYCompares the amount of money
spent on capital (plant, machinery and equipment) with
that spent on labor. IBISWorld uses the ratio of
depreciation to wages as a proxy for capital intensity. High
capital intensity is more than $0.333 of capital to $1 of
labor; medium is $0.125 to $0.333 of capital to $1 of labor;
low is less than $0.125 of capital for every $1 of labor.
CONSTANT PRICESThe dollar figures in the Key Statistics
table, including forecasts, are adjusted for inflation using
the current year (i.e. year published) as the base year. This
removes the impact of changes in the purchasing power of
the dollar, leaving only the “real” growth or decline in
industry metrics. The inflation adjustments in IBISWorld’s
reports are made using the US Bureau of Economic
Analysis’ implicit GDP price deflator.
DOMESTIC DEMANDSpending on industry goods and
services within the United States, regardless of their
country of origin. It is derived by adding imports to
industry revenue, and then subtracting exports.
EMPLOYMENTThe number of permanent, part-time,
temporary and seasonal employees, working proprietors,
partners, managers and executives within the industry.
ENTERPRISEA division that is separately managed and
keeps management accounts. Each enterprise consists
of one or more establishments that are under common
ownership or control.
ESTABLISHMENTThe smallest type of accounting unit
within an enterprise, an establishment is a single
physical location where business is conducted or where
services or industrial operations are performed. Multiple
establishments under common control make up an
enterprise.
EXPORTSTotal value of industry goods and services sold
by US companies to customers abroad.
IMPORTSTotal value of industry goods and services
brought in from foreign countries to be sold in the
United States.
INDUSTRY CONCENTRATIONAn indicator of the
dominance of the top four players in an industry.
Concentration is considered high if the top players
account for more than 70% of industry revenue.
Medium is 40% to 70% of industry revenue. Low is less
than 40%.
Provided to: Ryerson University (2128964422) | 13 May 2018
Fashion Designers in the USMarch 2018   31
FASHION HOUSEA company that hires and houses
fashion designers to create apparel and accessories for a
specific brand.
FAST FASHIONA term that refers to clothing collections
that are based on the latest runway trends.
INDUSTRY REVENUEThe total sales of industry goods
and services (exclusive of excise and sales tax); subsidies
on production; all other operating income from outside
the firm (such as commission income, repair and service
income, and rent, leasing and hiring income); and
capital work done by rental or lease. Receipts from
interest royalties, dividends and the sale of fixed
tangible assets are excluded.
INDUSTRY VALUE ADDED (IVA)The market value of
goods and services produced by the industry minus the
cost of goods and services used in production. IVA is
also described as the industry’s contribution to GDP, or
profit plus wages and depreciation.
INTERNATIONAL TRADEThe level of international
trade is determined by ratios of exports to revenue and
imports to domestic demand. For exports/revenue: low is
less than 5%, medium is 5% to 20%, and high is more
than 20%. Imports/domestic demand: low is less than
5%, medium is 5% to 35%, and high is more than
35%.
LIFE CYCLEAll industries go through periods of growth,
maturity and decline. IBISWorld determines an
industry’s life cycle by considering its growth rate
(measured by IVA) compared with GDP; the growth rate
of the number of establishments; the amount of change
the industry’s products are undergoing; the rate of
technological change; and the level of customer
acceptance of industry products and services.
NONEMPLOYING ESTABLISHMENTBusinesses with
no paid employment or payroll, also known as
nonemployers. These are mostly set up by self-employed
individuals.
PROFITIBISWorld uses earnings before interest and tax
(EBIT) as an indicator of a company’s profitability. It is
calculated as revenue minus expenses, excluding
interest and tax.
VOLATILITYThe level of volatility is determined by
averaging the absolute change in revenue in each of the
past five years. Volatility levels: very high is more than
±20%; high volatility is ±10% to ±20%; moderate
volatility is ±3% to ±10%; and low volatility is less than
±3%.
WAGESThe gross total wages and salaries of all
employees in the industry. The cost of benefits is also
included in this figure.
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