NEW YORK — If you want to make money in the fashion game today, go big in accessories — and get into mass market apparel.
Don't rule out luxury just yet, though. The sector is still going gangbusters thanks to ever-expanding wealth, with no end in sight. Just ask Neiman Marcus Group Inc. president and chief executive officer Burt Tansky, long a proponent of the luxury boom.
"For our purposes, luxury is here to stay," he said at a conference Friday organized by Altagamma, the group of high-end Italian companies. "The wealth factor is growing here in the U.S. And once you enter the world of luxury, you don't want to leave."
Accessories continue to fuel growth for Neiman Marcus in part because the category is less volatile than apparel and is not affected by the markdown factor, he said. Aside from having a "phenomenal" shoe business and an accessories business that has been going crazy for the past five or six years, Tansky said Neiman Marcus has seen increasing interest in precious jewelry, including million-dollar pieces.
"There has been a surge for more and more important jewelry," he said.
The key, though, is to define luxury. "Affordable luxury is not luxury — it wants to be," he added.
But the fashion business generally has been booming across all categories, according to a new study. In fact, business has been so strong for the 39 publicly traded international companies polled that, on average, 2006 sales were up 14 percent, EBITDA rose 13 percent and EBIT climbed 15 percent, compared with the previous year.
Those were among the financial highlights detailed in the latest Fashion & Luxury Insight survey, which was compiled by Milan-based SDA Bocconi School of Management, Altagamma, and Ernst & Young. Combined, the survey's brands posted $200 billion in annual sales for fiscal year 2006. During that same period, the return on investment increased 15 percent and the return on equity jumped 17 percent.
Perhaps the most surprising statistic — and there were many —was the claim that best performing apparel companies cater to the mass market, with the average return on investment being 19 percent compared with 10 percent for more high-end firms. And having a total or partial retail presence is essential to a company's future, according to Altagamma's executive director Armando Branchini.
A Stella McCartney sketch of a custom dress made from protein-based silk in partnership with biotech lab Bolt Threads. The dress will be displayed at The Museum of Modern Art's upcoming design exhibition, "Items: Is Fashion Modern?"