1. Chapter 4

2. Substance of the Fashion Industry
Chapter 4
Chapter 4
Substance of the Fashion Industry

3. Chapter 4
Learning Outcomes
Describe the two ways of viewing the fashion industry’s channel of distribution.
Define and recognize vertical integration.
Summarize commodity, fashion, and seasonal goods as related to the fashion industry.
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4. Chapter 4
Learning Outcomes
Distinguish among other industries that deal with textile products.
Identify the trade associations and industry publications for the fashion industry.
Infer the geographic areas for each segment of the industry.

5. Channel of Distribution
Chapter 4
Channel of Distribution
Fashion goods evolve through many steps before they become finished items
A channel of distribution is the route that products take from the original source through all stages to the end user
The two ways of viewing this channel is
soft goods chain
four groups approach

6. Chapter 4
Industry Facts
The soft goods chain is a distribution channel for apparel and home decorating textiles
It is also called the textile/apparel pipeline
The chain
starts with the textile segment
moves through the apparel segment
goes to the retail segment
finishes with end users

7. The Soft Goods Chain Companies operate at each level of the chain
Chapter 4
The Soft Goods Chain
Companies operate at each level of the chain
Each segment buys products from the previous one and sells to the next one
Mary G. Wolfe
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8. The Soft Goods Chain
For companies at the beginning and middle of the pipeline, their customers
are not end-use consumers
are the businesses positioned at the next step of the overall chain

9. Chapter 4
The Textile Segment
The textile segment of the soft goods chain starts with fiber production
Fibers are very thin, hair-like strands that can be quite short or very long
They originate either from naturally grown sources or chemical mixtures
Yarns are continuous strands of textile fibers in a form suitable for processing into fabrics
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10. Chapter 4
The Textile Segment
Yarns are formed by spinning or twisting fibers together at yarn mills
Textile mills weave, knit, or otherwise join yarns into fabrics, or long pieces of cloth called greige goods
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11. The Textile Segment
The last production step is fabric finishing, which includes
bleaching
dyeing
printing, and more
Finishing changes how the fabric looks, feels, and/or performs

12. Chapter 4
The Apparel Segment
The apparel segment produces finished garments and accessories
Designing is the process of creating new versions of garments or accessories
New design ideas move fashion forward
After the fashions are designed, they are manufactured
Most are mass-produced in factories
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13. Chapter 4
The Apparel Segment
Apparel sales involves selling the completed garments in large quantities to retail stores
Most garments are sold at wholesale prices and shipped directly from manufacturers to retailers
Inexpensive accessories and small, nonfashion products go through wholesalers, often referred to as resellers

14. Chapter 4
The Retail Segment
Retailing is the selling of merchandise directly to consumers
through a store or other method
Retailers pay a wholesale price for finished products and offer them at their stores for a higher retail price
The markup covers their expenses and includes some profit for the retailer

15. The Four-Groups Approach
Chapter 4
The Four-Groups Approach
The four-groups approach is a different way of showing the same flow of goods
The four-groups approach separates the overall fashion industry into four main groups of businesses
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16. The Four-Groups Approach
The four main groups of businesses include the
primary group
secondary group
retail group
auxiliary group
Mary G. Wolfe

17. Chapter 4
Primary Group
This group provides the raw materials from which fashion products are made
textiles
leathers and furs
some plastics and metals
These items are sold
primarily to apparel and accessory producers
also to fabric stores and some specialists

18. Secondary Group The secondary group is the manufacturing segment
Chapter 4
Secondary Group
The secondary group is the manufacturing segment
It makes finished garments from the textiles and other materials bought from the primary suppliers
This group produces sewn or fabricated products, such as garments, accessories, and other items

19. Retail Group The retail group consists of
Chapter 4
Retail Group
The retail group consists of
stores
mail order catalogs
TV home shopping channels
Internet retail sites
other retail enterprises
They sell the finished goods directly to consumers

20. Chapter 4
Auxiliary Group
The auxiliary group supports, or helps, the primary, secondary, and retail groups
The businesses within this group work with all the other groups simultaneously
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21. Auxiliary Group Auxiliary businesses include
market researchers and forecasters that help analyze and interpret future fashion directions
fashion publications that provide ads and information
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22. Auxiliary Group Other auxiliary businesses include
Chapter 4
Auxiliary Group
Other auxiliary businesses include
publicity and advertising agencies that research the market and plan promotional campaigns
buying services in market centers that help retailers get the right merchandise for their stores
models and modeling agencies that show new fashions in fun, exciting ways
trade associations and their publications

23. Chapter 4
Vertical Integration
Vertical integration is the combining of two or more steps of the pipeline within one company and under one management
Textile mills may produce yarn, make fabric, and perform the finishing processes for a fabric
An apparel manufacturer may open one or more factory outlet stores
These examples show forward integration
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24. Chapter 4
Vertical Integration
If a company takes on activities toward the source of goods, it is called backward integration
Retail companies may perform manufacturing functions to produce private label merchandise
Private label goods are goods produced only for one retailer and have the retailer’s brand

25. Chapter 4
Industry Facts
Commodity products are goods that rarely change in design and are in constant demand
Example: men’s white business shirts
Fashion products, on the other hand, are products that are always changing
Seasonal products are products that change in demand with the seasons of the year
Examples: swimsuits, coats

26. Other Textile End-Use Industries
Chapter 4
Other Textile End-Use Industries
Other textile markets include
household products
industrial textile products
the home sewing industry
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27. Other Textile End-Use Industries
In the end-use textile market, apparel fabrics
comprise about 34%
are decreasing in relation to the total market

28. Household Textile Products
Chapter 4
Household Textile Products
The household textile products industry manufactures fabrics for
floor coverings—rugs and carpets
home furnishings—window treatments and furniture coverings
domestics—bed, bath, and kitchen textiles
Household textiles follow fashion trends that are broader and slower moving than apparel trends
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29. Household Textile Products
Chapter 4
Household Textile Products
Many furniture items are custom-covered in fabrics selected by the customer
An in-store computer design system helps consumers see different fabrics on various furniture frames
Retailers must allow a month or more for production and delivery of custom-ordered items to customers

30. Chapter 4
Fashion Insights
Performance, an important consideration for household textiles, involves strength and durability, colorfastness, and stain resistance
Many household items are expensive, so sales depend on the health of the economy
Designer names are important in all categories of household textiles

31. Technical Textile Products
Chapter 4
Technical Textile Products
Technical textiles are for industrial uses rather than for fashion
Their specialized uses require continuous research and development
Examples: textiles for protection from heat, fire, subzero temperatures, pressure changes, forceful impacts, and radiation
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32. Technical Textile Products
Chapter 4
Technical Textile Products
Many are used in safety and medical fields
The #1 market for industrial textiles is the transportation category (car interiors, etc.)
The #2 market is geotextiles, which relate to the earth’s surface (liners, coverings, etc.)
Composites are textiles combined with other materials
Examples: commercial hoses, belting, car fenders, boat hulls, and truck tanks

33. The Home Sewing Industry
Chapter 4
The Home Sewing Industry
The home sewing industry deals with the production and selling of
nonindustrial sewing machines
retail fabrics, notions, patterns, and publications
Less home sewing of apparel is done now than in the past, but hobby sewing has increased
particularly quilt making

34. Chapter 4
Trade Associations
Trade associations are nonprofit, voluntary organizations of businesses with common interests
Each association deals specifically with a certain industry or segment of an industry
All trade associations aim to promote their industry, its products, and the interests of their members
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35. Chapter 4
Trade Associations
When networking, members exchange ideas, information, or services—all of which helps to make their businesses stronger
Some key trade associations are
Fashion Group International (FGI), the leading authority on the business of fashion and design
American Society of Interior Designers (ASID), a strong association of home fashions professionals

36. Chapter 4
Trade Publications
Trade publications are magazines, newspapers, and books that deal specifically with a certain industry or industry segment
Some key publications are
Women’s Wear Daily (WWD), a newspaper that reports fashion trends and other news of the apparel trade
STORES magazine, which many store managers read

37. Industry Facts Apparel production is throughout the U.S.
Chapter 4
Industry Facts
Apparel production is throughout the U.S.
New York City is the center of U.S. apparel companies
Garment and accessory designing and production companies exist in most states.
California ranks second in the apparel industry, mainly known for sportswear
Apparel retailing occurs throughout the U.S.

38. Geographic Locations of Industry Segments
Chapter 4
Geographic Locations of Industry Segments
Textile production
was centered in the New England states in the 1700s and 1800s
is concentrated in the Carolinas and Georgia today
now occurs primarily “offshore”
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39. Geographic Locations of Industry Segments
Chapter 4
Geographic Locations of Industry Segments
Apparel production involves many U.S. firms, each making a particular range of products
It is labor-intensive, requiring many workers
Household textile products are made
in the Carolinas and Georgia as well as in California and New York
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40. Geographic Locations of Industry Segments
Specialized technical textiles are produced
in many parts of the United States
Textile/apparel trade associations are located near Washington, DC, or near their particular market center

41. Chapter 4
In Summary
The fashion channel of distribution includes the textile, apparel, and retail segments, plus an auxiliary group
Apparel is just one end-use of textiles
Textile end-use industries also include household textile, technical textile, and home sewing goods
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42. Chapter 4
In Summary
Trade associations include businesses that have common interests, such as those in the textile or fashion industry
Many firms that produce textiles and/or apparel are located in the United States
Retailing is located everywhere—from small towns, to suburban malls, to large cities