The Business of Fashion: Not Owning Your Name

When I decided to study fashion design, I was never presented with the notion that I may have to sell my designer name. When lessons arose concerning the business side of fashion all talk was about brand image and recognition using well-known fashion designers as the example. As a designer or design student, you know top fashion brands like Calvin Klein, Donna Karan, Tommy Hilfiger, Emanuel Ungaro and a few other major designer names. However, did you know that these designers do not own their name/brand?

Owning a Label is Expensive

There are hundreds, if not thousands, of fashion designers worldwide who work for design houses, own design houses or work as freelance designers. Those who become famous and start their own fashion lines have to keep in the back of their minds the possibility of selling their name. It sounds kind of crazy that a person would sell their name, however, running a design house that produces multiple lines and presents several times a year is very costly. Unless the designer is independently wealthy where he or she can use their own capital to fund the business when sales and operating costs become too much, then a financial backer is often needed. However, a financier not only is seeking to invest in a designer's brand...they often are taking ownership of it along with that designer's name.

The Benefit of Selling Your Name

Holding companies like LVMH (Moet Hennessy-Louis Vuitton), PPR (Pinault-Printemps-Redoute) and the apparel company Phillips Van Heusen (PVH) own well-known designer brands. Some specialize in simply fashion like PVH while others have pretty much cornered the market on luxury brands like LVMH. The benefits to fashion designers who sell their brand -- their name -- to these companies is primarily the abundant cash flow that allows them to have their name on multiple clothing lines, fragrances, accessories and a few luxury goods.

On their own, with their own income, very few design houses or designers can afford to continually produce such a broad spectrum of goods even if they are making a sizable profit. This does not mean it is impossible. Chanel and Armani are design houses who have full control over their brand and multiple product lines and are courted by buyers seeking a piece of their fashion design pie.

The Downside of Selling Your Name

Obviously not owning your name would be the major downside to selling it. However, the trickle-down effect of this runs deeper.

• You don't have control over what your name is attached to. If you are still active within your brand, you will have some input. Ultimately, you do not make the final call.
• You can be fired. Unless you have a contract with the company which stipulates that you will be head designer or creative director over your brand until your decide to retire, then you can be replaced. Look at the misfortune John Galliano brought upon himself in February 2011. Christian Dior owns John Galliano's brand and was fired on March 1, 2011.
• If fired, retired or your brand is dissolved, you lose the right to design under your name. One of the pitfalls for Galliano when he was fired, was he lost the right to design clothing under his name. Christian Lacroix's brand was diminished to licensing for fragrances and accessories. While the designer himself still creates fashion costume, he cannot design under his name anymore.

Designers and the Companies That Own Their Names

Here are a few designers -- both alive and deceased -- who no longer own their brand/name:

• Donna Karan, Marc Jacobs, Fendi, Emilio Pucci and Givenchy are all owned by LVMH.
• PPR owns Yves Saint Laurent, Alexander McQueen, Gucci, Stella McCartney and Balenciaga.
• Calvin Klein -- sans Calvin Klein the founder who is still alive -- and Tommy Hilfiger are owned by PVH.

As a designer or design student, you may have dreams of becoming the next Donna Karan, Alexander McQueen or Marc Jacobs. Just remember that each of these designers sold their brand, their name, to be able to create the fashion they - and you -- love. However, take into consideration the pros and cons of selling your brand. In essence, the choice is between, "Do you want to own your brand or be an employee of it?"

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