The apparel and accessories industries are diverse, with hundreds of product lines designed for men, women, and children in a wide range of styles and price points. Each line is designed specifically for a targeted consumer group, based on its observed and expected trends and needs. (Neuman, 2003)
In the apparel industry, companies can operate as manufacturers (wholesalers), as retailers, or as both. For instance, NEXT Plc., a vertical retailer, outsources the production of its apparel and accessories, which it then sells in its own stores.
An apparel manufacturer may sell its products under its own brand name, a brand name that it has licensed from another company, or a retail customer’s private label. For a manufacturer, private-label manufacturing not only provides an additional source of revenue, but also allows its plants to run at greater capacity, thus reducing the per-unit production costs of its own branded goods. Moreover, since the manufacturer does not have to support the marketing of private-label goods, such items can be almost as profitable as branded products. The increasing diversification of operations means that the roles of apparel manufacturer, retailer, brand manager, and licensee continue to overlap and blur. (Neuman, 2003)
Fabrics play an important role in function and quality. In general, woolens and knits are high-quality fabrics that can command higher selling prices. Woven fabrics tend to be lower in both quality and price. Many traditional apparel vendors, aiming to diversify their assortments, offer complementary accessories like costume jewelry, handbags, hats, belts, watches, sunglasses, scarves, gloves, and footwear. A smaller number of firms are niche players in the accessories market, targeting different price points. NEXT Plc aims for the premium-priced segment, while Fossil Inc. and Claire’s Stores Inc. focus on the moderate and popular-priced markets, respectively. (Neuman, 2003)