Is Investing in Fashion?

Is Investing in Fashion?

As the curtains rise on London Fashion Week, the world's fashionistas eagerly anticipate the unveiling of the latest trends destined to define autumn and winter 2024. Yet, as I observe the shows of haute couture and avant-garde designs, a subtle but significant question arises: Who stands behind these iconic runways, and how does investing in fashion translate into financial gain?

Fashion is undeniably one of the world’s most influential industries. McKinsey[1] famously stated that if you ranked the global fashion industry alongside individual countries' GDP, it would represent the seventh-largest economy in the world. In 2022 alone, the global fashion market generated a total revenue of $1.53 trillion[2]

Each year, Forbes announces the World’s Most Valuable Brands[3]. Louis Vuitton (LVMH) consistently ranks among the top performers, boasting a brand value of $47.2 billion. Other notable brands include Nike, Gucci, Hermes, and Zara, each contributing significantly to the industry's growth and profitability. 

Luxury pieces – such as the iconic Hermes Birkin - have proven to have incredible pricing power over multiple cycles. The much sought-after bag has gone up in price numerous times since its launch in 1984 and still has a 2-year waiting list[4]. The latter is to blame for the distortion of the secondary market, where the bag is generally much more expensive. This phenomenon is well known by watch enthusiasts, with pieces like the Rolex Submariner experiencing similar demand. 

However, it’s not all about luxury. For example, Shein, China’s fast fashion brand, is one of the leading apparel brands in 2023[5], highlighting the evolving landscape of fashion commerce. Although the low cost of apparel can be appealing, especially in the current high inflationary and low growth environment we are in, there is a shadow of concern: sustainability. While fast fashion giants churn out cheap, low-quality clothing at an unprecedented rate, the environmental and social costs are staggering. Studies[6] show that people often wear only a fraction of their wardrobes, prompting a revaluation of consumption habits and the true value of material possessions.

About the author
Sandra Dailidyte

Sandra Dailidyte

Sandra looks after wealthy individuals and their families. She is based in the Edinburgh office and her clients are mainly in Scotland and London. She advises the families of some of the most successful business owners in the country and seeks to build long-term relationships based on trust and a high-level of communication and service.

Indeed, the fashion industry is a great representation of financial markets; portfolio construction is not dissimilar to a carefully curated capsule wardrobe. Drawing on this parallel, I have a few guiding principles for those contemplating a wardrobe (or portfolio) overhaul:

  • Embrace Your Authenticity: Whether your heart beats for Italian sartorial tailoring or the eclectic energy of Harajuku street fashion, stay true to your style. Similarly, when investing, align your portfolio with your unique objectives and circumstances.

  • The 80/20 Rule: Just as a well-curated wardrobe consists primarily of timeless capsule items, your investment portfolio should prioritise long-term stability over fleeting trends. While hot stocks may dazzle, ensure they complement your core investments like essential accessories, adding value without overshadowing the fundamental principles.

  • Diversification: different outfits are required for different occasions. Although a Hermes will not guarantee the success of a business meeting, it will certainly allow you to present and influence your ideas more powerfully than turning up in a tracksuit. However, you will not have an enjoyable time stumbling with high heels in the Scottish Highlands. Therefore, it is important that your wardrobe - and portfolio - considers different outfits for different purposes (think retirement fund – long-term investing, vs emergency cash reserve)

  • Balance: being covered head to toe in logos will not showcase a strong sense of style. Nevertheless, some items are worth the splurge: think of long-term staples such as a cashmere sweater, the perfect jeans and an iconic handbag (or watch). The high-quality items can grow in value over the long term), but you can complement the outfit with staples from M&S without breaking the bank.
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[2] Global apparel market - statistics & facts | Statista

[3] The World's Most Valuable Brands List (

[4] The Most Sought After Birkin: The Birkin 25 | Handbags and Accessories | Sotheby’s (

[5] Most valuable apparel brands worldwide 2023 | Statista

[6] People do not wear at least 50 percent of their wardrobes, says study (

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