How Luxury Brands Outsource Manufacturing to Maintain Quality?

Once upon a time Burberry made raincoats, Chanel designed hats, Salvatore Ferragamo S.p.A. fashioned shoes, and Louis Vuitton built luggage - and that was all that they made, and all that they provided.

But we know that’s not how the story ends.

WatchIn the past 50 years, luxury fashion brands have morphed into billion dollar companies that produce pretty much anything you can think of. Walk into any of these stores today and you can find absolutely everything: from high fashion clothing to shoes, accessories, jewelry and perfume. Name it, they’ve got it! Not only do they produce full range collections for any age and gender, some have even gone so far as to produce Home Collections like Giorgio Armani S.p.A. and Missoni.

Such a leap away from before, the fashion industry is growing bigger by the minute and lets face it, companies now aren’t what they used to be. Today, fashion brands no longer specialize on a range of high quality products, they specialize instead on a variety of products that demonstrate a high quality lifestyle.

But with this sudden expansion into a variation of product categories, it kind of makes you wonder: how do fashion brands manage to extend high quality manufacturing without having any primary experience in the production of new merchandise?

Luxury Brands Outsource Manufacturing

This is just about the point where specialized manufacturing companies come in handy. Fashion brands that wish to widen their portfolios, find it convenient and necessary to outsource production to other companies that have more experience and expertise in a particular field, especially when producing products at smaller amounts.

For instance Luxottica, founded in 1961 by Leonardo del Vecchio in Italy, is the premiere sunglass manufacturing company in the world. Luxottica, is known mostly for its two existing in-house brands, namely Ray-Ban and Oakley. However, with their high level of expertise and their large capacity for production, Luxottica has also managed to gather licensing contracts with other fashion brands like Chanel, Versace, Dolce and Gabbana, and Prada, to manufacture sunglasses under their labels. Since these fashion brands are more focused on the business of selling clothing, investing in the expertise and know-how in the production of sunglasses does not seem as practical, especially since sunglasses aren’t the focus of the brand, and are simply complimentary products to their total image.

RayBanIn this sense, a relationship between Luxottica deems to be very fruitful, because it allows fashion brands to provide a wider product portfolio while still promising high-quality. On Luxottica’s part, their expertise in the field promises lesser expenses (in producing by bulk), and thus the business venture becomes more profitable. At the same time, they are able to use established brand names to further market their products.

Another example of outsourced manufacturing would be the multinational cosmetics and perfume magnate, L’Oreal. L’Oreal has lent its expertise in the production of fragrances by producing scents for luxury brands like Giorgio Armani S.p.A., YSL, Ralph Lauren, Cacharel, Diesel, Stella McCartney, and Viktor and Rolf, to name a few. L’Oreal, a leader in beauty and fragrance manufacturing, much like Luxottica, has already proven its experience and knowledge in the field - not simply in production, but also in other business aspects like Marketing and Sales. Naturally, systematic marketing approaches are also different for every product. In this sense, licensing contracts to other companies does not only provide less cost and production benefits, but it also provides a lead in marketing strategies that prove to be more successful for that particular merchandise.

Other examples of specialized manufacturing firms include ABC S.p.A and the Binda Group. ABC in Florence, Italy, produces handbags, accessories and other leather goods for brands like United Colors of Benetton, Sisley, Levi’s, and Fornarina. While, the Binda Group in Milan, produces watches for Moschino, Kenneth Cole, and Breil.

The Future of Fashion Production

From these examples of how luxury brands outsource manufacturing, it is quite clear the means that fashion brands will go in order to shift from providing just high quality products to providing a high quality lifestyle. Gone are the days where fashion houses cater to a niche market with a niche product, today they are able to cater to a larger market and provide a whole array of items to complete a particular concept - all this is made possible with the help of companies like Luxottica, L’Oreal, ABC, and the Binda Group.

Who knows where the future of fashion production will go from here? Maybe it will move towards luxury brands investing cash into building more facilities for a more centralized and controlled system? Or maybe the future lies in a larger more affluent market for outsourced production? No one knows for sure. For now we can simply wonder at how complex the fashion industry has become, and be inspired in how everyone can work hand-in-hand to push it further into the future.