Fashion

You will be writing a final paper on Fashion Conglomerates. You have been assigned two (2) conglomerates and have selected a third.

Please prepare an APA formatted paper of 800-1000 words (references are not included in the word count)- Link to APA format website https://owl.purdue.edu/owl/research_and_citation/apa_style/apa_style_introduction.html (Links to an external site.)

Sections with grading weight

1)What are Fashion Conglomerates ( 10%) – here explain what is meant by fashion conglomerate and provide brief history of the rise of the fashion conglomerate

2) VF Corporation #1 (25%) : Provide a brief history of VF and the organization,, it origins, its growth, any problems/scandals/customer complaints, include summary of brands controlled by the conglomerate, other facts that are important to the continued success and growth of the organization

3) Richemont #2 ( 25%): Provide a brief history about Richemont and of the organization,, it origins, its growth, any problems/scandals/customer complaints, include summary of brands controlled by the conglomerate, other facts that are important to the continued success and growth of the organization

4) Kering Conglomerate #3 (25%) – This is the conglomerate that you CHOSE: Provide a brief history of Kering and the organization,, it origins, its growth, any problems/scandals/customer complaints, include summary of brands controlled by the conglomerate, other facts that are important to the continued success and growth of the organization.

5) Contrast and Compare (15%) – How are they similar? How are they different?

You are expected to include a reference page and to support your writing with intext citations.

ANSWER

Introduction

A fashion conglomerate can be described as a group of various business entities operating under a single parent company, spanning several industries. These entities are usually acquired through mergers and acquisitions with a primary objective of supplying diverse goods and services. Fashion was first noted in the mid-nineteenth century when various manufacturers started producing garments that did not require fittings. It later developed in the 20th century when neighborhood tailors’ networks gradually evolved into manufacturing businesses. Factories grew from necessity during the world wars. The ensuing of social and cultural changes led to the emergence of less restrictive and unilateral dressing codes. The eruption of critical changes in the fashion business and the establishment of designers as key determinants of taste emerged in the early part of the 20th century and was primarily dominated by the European houses, (Yezhova et al., 2018).

The middle class’s growth and an increment in foreign labor led to the swift shift from custom-made to ready-made clothes. Foreign labor was primarily from Jewish and Italian immigrants. Later on, a decline in working conditions was noted as manufacturers started taking advantage of the spiraling pools of labor from the immigrants; the industry grew very fast in 1915, becoming the third-largest in America after steel and oil. Diversification of the industry was primarily contributed by the 38 women of the largest women’s clothing makers established two sites in a neighborhood commonly known for the home of the 21st century New York’s garmets district. Some fashion pioneers are Bonnie Cashin, Adrian, Claire McCardell, all from America, Coco Chanel, Alix Gres, and Macleleire Vionnet from Paris. One can say that the fashion industry has been defined by the quest for profitable styles by multinational conglomerates with competitive technology and delivery of timely merchandise.

VF Corporation

This a global leader in branded lifestyle apparel and footwear with more than 30 brands and an estimated 59000 associates. The company was first established in 1899 in Pennsylvania as the Reading Glove and Mitten Manufacturing Company by John Barbey with other groups of investors. It is later renamed in the 1910s to Schuylkill Silk Manufacturing when it is expanded into silk lingerie. Later on, Vanity Flair is selected as the brand name for the lingerie line, Vanity Flair Silk Mills, Inc. The word silk is later dropped in the 1940s due to a prohibition on the material, then, later on, goes public. The name is later changed to VF Corporation due to its increasingly extensive product line. Its growth is primarily contributed by the purchase and merger of various brands and companies, in the 1980s, it purchases Blue Bell Holding Company and becomes the largest publicly held clothing company. After becoming one of the largest jeans makers globally, it purchases the Bulwark brand, hence acquiring 25% the 6-billion-dollar market. Some of the brands that largely contributed to its success and growth are The North Face Brand, Eastpak, Nautica, Kipling, lucy, Splendid, Timberland, Williamson Dickie, and laebreaker.

Like any other corporation, VF faces several challenges in its pursuit for its quality and timely delivery. Some of the challenges are competition from other apparel and footwear industries, failure to forecast demand for its products, failure to maintain images of the brand, seasonal nature of the business affecting revenues and cash demands, increasing pressure on margins, thereby leading to a decrease in profitability, fluctuations in the currency exchange rates and legal, regulatory, political and economic risks affecting its earnings and operations. Minimal customer complaints have been reported since customers utilize its products with minimal interaction with employees. Some of the past reported scandals are environmental pollution and child labor in its early years of establishment. A summary of its brands includes the Outerwear, footwear, denim, backpack, luggage, accessory and apparel categories; its largest brands are Vans, The North Face, Timberland, Wrangler and Lee. To ascertain its growth, VF has launched a sustainability and responsibility strategy called Made for Change, which targets driving transformational change and creating value for the business.

Richemont

This is a Switzerland-based luxury goods holding company that deals with some of the world’s leading luxury goods such as jewelry, watches, premium accessories’ and other products. It was formed in 1988 by a spin-off of the international assets owned by Rembrandt Group Limited. Dr. Anton Rupert founded the group in 1940s. The growth of Richemont has been enhanced by its purchase and acquisition of various brands. Some of the acquired brands are Cartier Monde SA, Purdey, Vanderon Constantin, Officine Panerai watchmakers, Serapian, Peter Millar LLC, Varin Entampage, YOOX Net-A-Porter Group, amongst other brands. Summary of the company’s brands are A. Lange &Sohne, Azzedine Alaia, Cartier, Montblanc, Roger Dubuis, Vanderon Constantin, Van Cleef, and Arpels. IWC Schaffhausen and others (McClain 2016).

Customer complaints are rare due to minimal customer-employee interaction. Some of the reported scandals are environmental pollution and poor working conditions scandals. The company has also faced various challenges in the past, for instance, management issues, technological challenges, weak demand for the pricey timepiece and off-restructuring charges and product buy-backs leading to overcapacity issues. To enhance its growth and sustainability, the company has since launched a transformational strategy known as Movement for Better Luxury to create luxury benefits for all; its major focus is on the environment, communities, sourcing, and people.

Kering Conglomerate

Kering is a global luxury group comprising iconic and diversified Homes in Fashion, leather goods, jewelry and watches. The company was founded in 1962 by Francois Pinault, originally called Etablissements Pinault. It was initially involved in wood trade negotiation and construction materials. Like other luxury conglomerates, Kering grew through acquisitions of various brands and partnerships. Some of the acquired brands are Conforama, Fnac, Yves Saint Laurent, YSL Beauty & Sergio Rossi, and Bottega Veneta. The high demand enhanced its further growth in the Chinese market and Cobra, Brioni, Christopher Kane and Ulysse Nardin (Donzé 2018).

A summary of the brands controlled by the company are Couture and leather goods consisting of Gucci, Saint Laurent, Bottega Vaneta, Balenciaga, Alexander McQueen, Brioni. Watches and Luxury consists of Ponellato, DoDo, Qeelin, Ulysse Nardin and Girard. Kering Eyewear, which distributes eyewear for a complete and balanced portfolio of 15 brands. Some of the company’s challenges are increased operational costs, difficulty managing communication brands, inefficient stores in China, and technological disruptions. It has also been faced by scandals like tax evasion, poor working conditions and customer scandals (lying to the customers).

Contrast and Comparison of the Conglomerates

VF Corporation majorly dwells in the clothing industry, while Richemont and Kering dwell in the jewelry and watch industry.

All luxury companies have put up sustainability strategies to enhance their growth and profitability.

Unlike VF and Richemont, Kering has experienced many scandals thereby affecting its profitability and revenue making.

VF Corporation faces many challenges due to its vast network and market unlike the other who experience minimal challenges.

References

Donzé, P. Y. (2018). The birth of luxury big business: LVMH, Richemont and Kering. In Global Luxury (pp. 19-38). Palgrave, Singapore.

McClain, J. (2016). U.S. Patent Application No. 29/477,928.

Pavione, E., Pezzetti, R., & Matteo, D. A. (2016). Emerging competitive strategies in the global luxury industry in the perspective of sustainable development: The case of Kering Group. Management Dynamics in the Knowledge Economy, 4(2), 241-261.

Rawley, E., Godart, F. C., & Shipilov, A. (2018). How and when do conglomerates influence the creativity of their subsidiaries?. Strategic Management Journal, 39(9), 2417-2438.

Yezhova, O. V., Pashkevich, K. L., & Manoilenko, N. V. (2018). Comparative analysis of foreign models of fashion education. Revista Românească pentru Educaţie Multidimensională.