How to Start a Luxury Clothing Brand [2023]

April 15, 2023

Written by Melanie DiSalvo

April 15, 2023

Written by Melanie DiSalvo

Thinking about creating a luxury brand, but not quite sure how? I wrote this article to help teach you everything that separates a luxury brand from a fast fashion one. When talking about luxury products, first ask yourself, are you a glass half empty or half full kind of person? By this I mean, do you believe luxury is all just clever marketing, smoke and mirrors, trends and a complete scam (that you wouldn’t mind cashing in on)? Or, is there a real reason why one t-shirt can cost $5 while another costs $500? To answer all of this, I’m taking you on A Look Behind The Seams of the inner workings of luxury fashion houses, and showing you how to start a luxury clothing brand.

BUT, BEFORE WE GET STARTED…

Have you heard about the super secret document that everyone in the fashion industry uses, but no one is talking about? Probably not. That is because you can't find it on Google or Instagram (believe me, I've tried).

It's a form I have used for over 13 years at every job I have ever had. Literally everyone from brands to fabric suppliers use it, but you can't find it anywhere publicly.

The best part? It can cut your sourcing time in half, and save you tons of money in product development! This is the kind of info consultants charge the big bucks for. And, I'm giving it away for free until the end of the month.

So, get ready to make fashion startup life a whole lot easier, and GRAB YOUR FREE DOWNLOAD OF THE NOT SO SECRET SOURCING DOC HERE

If you have been trying to figure out how to start a luxury fashion brand - this is for you.

BUILDING A LUXURY CLOTHING BRAND POST INSPIRATION

I was inspired to write this post after coming across this Bored Panda article on Facebook – 17 Y.O. Who Gets Mocked For Calling Her $80 Bag “Luxury” Is Invited To The Headquarters Of The Brand After Clapping Back At Haters (what can I say, sometimes clickbait gets me).

The article is about a girl whose father gives her an $80 Charles & Keith bag. Our story’s main character Zoe lives in Singapore and this price tag is nothing compared to the thousands spent on brands like Louis Vuitton and Chanel. So, the internet attacked her, explaining that an $80 bag was not a luxury.

Zoe clapped back. When her family first moved to Singapore, they struggled to have enough money to eat. An $80 bag was a luxury to her because her family had to put in extra hours of hard work to afford it.

The story made me think, what is luxury?

It can be anything you want it to be.

But, let’s not mistake luxury with couture fashion.

WHAT IS COUTURE FASHION

Couture fashion is one-of-a-kind clothing made for a muse. Most fashion houses like the above-mentioned LV and Chanel create couture custom pieces for big-ticket clients, but the rest of us are buying “luxury” ready-to-wear, “mass-produced”, off-the-rack items.

So – is luxury a scam? Are these brands selling off-the-rack items like at your local Target, but for A LOT more? To understand the psychology behind luxury and what it means, let’s explore two luxury fashion case studies. Basically creating a knockoff of a knockoff. And customer happily spend $300 plus a garment for them.

LUXURY BRAND VS LUXURY PRODUCT

Before we can talk about how to start a luxury clothing brand, first you need to know there are two different types of brands.

Luxury brand

Luxury product

How To Start A Luxury Clothing Brand – Calvin Klein Case Study

At the time of writing this article, a 3-pack of men’s CK underwear sells for $47.50 ($15.83 per pair). Or, you can get a similar 3-pack from Fruit of Loom for just $17.99 ($6 per pair).

So, what’s so special about Calvin’s? IMO, not much.

They are both made with a cotton stretch fabric – the stretch prevents bagginess and sagging after wear, and they both have a branded elastic band.

From a product standpoint there is nothing special here.

To prove my point, I will play devil’s advocate. If the Calvin’s were made with the best organic, long staple length Pima or Egyptian cotton, and the Looms were made with a cheap cotton poly blend, the difference in cost to produce would be minimal – maybe $1 a pair MAX. Not $10.

It is important to note Calvin Klein website makes no claim they are using premium fabrics.

What you are really buying is the branding. People buy brands they love because they like how they feel when wearing their styles.

So, let’s take a look at the genius behind Calvin Klein’s decades-long marketing campaigns that made people fall in love with their brand. They built a brand over time, taking 40 years to cultivate it.

Getting your audience to believe the dream you are selling (sexy underwear in the case of CK) takes time.

Calvin's first celebrity campaign dates back to the 80’s and featured Brook Shields. Every year since, they collaborate with some of the most famous and recognizable faces (and we're not talking influencer famous here )– Justin Bieber, Kendal Jenner, and Lil Nas were some of the most recent celebs to be featured in a “My Calvins” campaign.

The brand's decades-long love affair with the hottest celebrities is what gives it its “cool factor”, not the product itself. Another example of this marketing strategy at play would be the early 2000’s Got Milk campaigns. Everyone from Mary Kate and Ashley Olson to Woopie Goldburg, and even Kermit the Frog convinced us that milk was the healthy beverage of choice (we didn’t know about oat milk back then).

DON’T DO THIS IF YOU’RE BUILDING A LUXURY BRAND

One celebrity won’t do anything for your brand. That’s the hard truth. Brands need to feature multiple highly influential celebrities to make a profit.

For example, one brand I know featured Miley Cyrus’s little sister wearing their clothing. The post got hundreds of thousands of likes. Many fans commented on the post, where can I buy this? The brand DM’d every single commentator with a 15% discount code”, but not many people (read, almost no one) bought the leggings. The campaign was a failure.

When talking about how to start a luxury fashion brand, it’s important to know very few “influencers” can actually sell stuff. Likes don’t pay the bills. To move someone from scrolling and liking to pressing buy in the shopping cart, they need to see the clothes a few more times on other celebrities too.

Both Calvin Klein, and Got Milk have had hundreds of celebrity partnerships that were not only featured on their own channels, but magazines, website advertisements, billboards, and more.

Remember, exposure is key when building a brand image.

Building a Luxury Brand - Hermes Case Study

So, if you aren’t going to have a star-studded brand launch, the other alternative to creating a luxury brand is, well, actually creating a luxury product.

Hermes is a great example to learn form. And, no, I am not about to talk about their Birkin or Kelly bags. I want to talk about what the brand was founded on – scarves.

Back in the 1930’s Hermes used a printing technique called roller printing. Although it was technically invented in the 18th century, no one was using it, and Hermes pushed the boundaries of what was possible.

Roller printing works by engraving large metal cylinders. Ink passes through the cylinders and prints the fabric. Roller printing, to this day, is one of the most precise printing methods. The only downside? It’s also one of the most expensive.

The price of roller printing has come down a lot in recent days (many of my clients even use the technique), but back in the 1930’s, it was not available to every brand because of the astronomical price tag.

Hermes didn’t care about the price. They wanted to create some of the boldest and most detailed silk scarves around. And, they did.

Did you know the average print in the fashion world has about 3-8 colors? Some Hermes scarf patterns have up to 47. This is important because each color in a print is a new screen, with a new cost associated with carving the screen. Plus, let’s just think about how much more time and labor it takes (time is money in fashion manufacturing) to screen 40+ colors compared to 4 (10x).

Because Hermes invested in creating a premium product, they were able to make a luxury name for themselves, which has lived on almost a century later.

While flashy branding like CK sounds like the easy way to start a luxury fashion line, in my opinion, actually creating a luxury product that performs where other brands cut corners is a lot easier. Especially today, with big brands sacrificing product design to meet margins and investor expectations.

IF YOU WANT TO BUILD A LUXURY BRAND, DON’T DO THIS…

If creating a luxury brand is a new concept for you, spend the majority of your time learning, not designing. This will help give you an edge over competitors.

One of the best tips I can give you on how to start a luxury fashion brand, is to become a real expert in your category, whatever it is. Learn all of the different manufacturing options and the pros and cons of each. Then, test everything. Make multiple samples trying all of the different techniques you’ve learned to see which is really the best for your customer’s needs.

LEARN MORE ABOUT SOURCING LUXURY FABRICS

If you are interested in sourcing luxury fabrics for your brand, grab my super secret sourcing doc, that will help you cut your sourcing time in ½.

THREE PROS OF BEING A LUXURY BRAND

Hermes campaign

HIGHER PRICE AND HIGHER MARGINS

Even if you make the most expensive product possible, your margins will still be better than non-luxury brands. I’ll give you a few examples of luxury programs I have worked on and how their margins compared to mid-range brands.

Example 1: Luxury Silk Caftans – Product Based

The first example is a client who makes luxury silk caftans. Not only does she use silk, the most expensive fiber around, but she also does digital printing, which is very expensive. She also has intricate hand-sewn work on the final garments that were exclusively made by a special group of highly skilled artisans – which, again, added to the total cost.

These garments had all the bells and whistles. And, she paid for it. On average, each piece was about $60.

She sold the pieces for about $500. That’s over a $440 profit per piece!

If she were to make the same designs in a sustainable traceable viscose, using screen printing, we probably could have produced something very similar for about $25-$30. And, she also could have realistically sold it for about $300. However, at the end of the day, she would only be making $270 a piece, not $440. Another way to think about it is that the extra investment of $30 per garment made her an extra $170.

Example 2: Luxury Block Prints – Branding Based

Another client that makes block printed clothes, mostly on cotton voile fabrics. Nothing about her process is unique, sometimes she even visits the local Jaipur market and “steals” pattern designs. She is making the cheaper $25-$30 garments I mentioned above.

But, she sells those $30 products for $500 plus dollars.

Instead of investing that extra $30 bucks into the product, she spends it on better photography and celebrity partnerships. Meaning, she’s invested in luxury branding.

If she hadn’t spent the extra cash on the marketing and branding materials, she might only be able to convince people to buy her product for around the $200 price range.

If investing a little extra cash in the product or the branding can have such big rewards, why isn’t everyone doing that to create a luxury line? I’ll get to that in just one minute.

TRADITIONALLY RECESSION PROOF

Let’s revisit Hermes. While other brands are struggling, Hermes has seen 20% revenue increase in 2022, even after increasing prices by 3.5%. They are doing so well that in 2023, they are boosting their output of bags by 7%.

So, what’s the secret?

When you’re in the top 1%, even if you lose a million dollars, that is still “nothing” to you. The ultra-rich will always have tons of money to spend. To them, buying a $3000 handbag is the equivalent of buying a cup of coffee.

While the average shopper is thinking twice and watching their spending. Luxury shoppers simply have no limits. That’s why luxury brands don’t see much of an impact on their bottom line during difficult economic times.

LOYAL CUSTOMERS

The last benefit of creating a luxury brand is that you will have loyal customers that will buy from you for years. They might even their kids in your clothes - hello Burberry kids collection.

However, you don’t get this type of loyalty without putting in a lot of work. Specifically, in the field of customer experience.

If you haven’t been shopping in a luxury setting, I’ll paint you a picture. Think super attentive staff catering to your every need, possibly a popped bottle of bubbly – it’s a complete brand experience and indulgence.

And once you become one of their regulars, you start getting exclusive stuff that the casual shopper doesn’t get. (We’ll talk about exclusivity later). Think private parties, special gifts, and access to first dibs on hard-to-get limited edition luxury items.

Luxury brands go above and beyond to show their best customers how much they appreciate them.

Chanel is even opening an entire VIP store that is by invitation only for exclusive shopping experiences. Can you imagine having a business that is so successful you can turn the average person away and only cater to who you want… in the middle of a recession, while other brand names are closing down around you?

That’s the type of stability that luxury brings.

THREE CONS OF THE LUXURY MARKET

Miley Cirus for Gucci

HIGHER INVESTMENT REQUIRED

Again. If you aren’t investing in marketing, you need to be investing in the product. Either way, starting a luxury company is going to cost you more.

The fact is, everyone might not have that kind of capital. Even if you do, that is no guarantee that you will be successful.

One of the craziest stories I heard was about someone who spent half a million dollars to start her clothing line and couldn’t get a single sale in her first season.

Wow. Just, wow.

Even with upfront costs covered, she wasn’t able to get the product and branding mix just right. Her designs and the story the brand told didn’t land well with luxury consumers.

Even with an increased (sometimes bloated) budget, you need to be strategic with your spending.

LESS SALES

While each sale in a luxury line can make you hundreds if not thousands of dollars, you are going to make less of them. You will need to be patient. Some startup luxury brands only make about 1 sale a month. On the other hand, brands that sell their clothes around $100 a piece receive multiple orders a day.

The proof of this is in the production numbers.

I see this with my client orders too. The brands that are selling low-price items regularly order thousands of pieces, while the higher-end brands will order 50 or 100.

If you aren’t a patient person, luxury might not be for you.

Some pro tips– because of this lower volume of sales, luxury brands tend to diversify at lower price point products, like cosmetics and fragrance (Chanel, Armani, Gucci, etc). So, even people who can’t afford to purchase a thousand-dollar shirt can get a taste of the luxury with a $30 eyeliner.

CUSTOMERS

I said they were loyal,but, they can also be difficult.

When someone is shelling out that kind of money, they expect a certain level of service and quality. If you don’t or can’t provide that for them, you are in for a world of headaches.

Dealing with unhappy customers is difficult for any brand. But luxury customers can be a whole other level.

Convincing customers your price tag is worth it

How are you going to convince your customers you are special? We have gone over the whole product vs branding thing. But, how are you going to communicate that to them? How will you change their perception?

Long gone are the cowboy days of internet marketing where a brand could simply say.

“We created the best travel hoodie”

“Our pants are so good they sold out in 1 hour”

“These are the most sustainable underwear in the world”

Let’s talk about it.

What’s your brand’s story?

This is one of the most important things to consider when learning how to start a luxury fashion brand. Every brand has a unique story. I shared my point of view with you earlier in this post, this is a non-negotaiable for a luxury brand.

Take some time to reflect on why you want to build a luxury brand. What sets your story apart from everyone else out there? Quick tip, think about your niche segment and how they want to be talked to. What tone will you use to communicate your brand identity?

Did you spend five years making that perfect hoodie? Tell that story. Or do you have unique life experience that makes you an expert in something? Share it.

Your brand story is what makes you unique, and what helps you stand out in a crowded target market.

What’s your value proposition?

Today you need to prove your value. Anyone can say or sell whatever they want on the internet. And often, when that box full of clothes comes in the mail, customers are left disappointed.

So, what is going to set you apart from everyone else? Where are you going above and beyond?

Do you have unparalleled customer service? Do you specialize in superior craftsmanship and quality? Are you open to customizing and personalizing your pieces so they are unique for each customer?

How do you prove your craftsmanship and quality?

Will it be through real customer reviews and user-generated content (UGC)? Will you have super detailed product videos? Or, will you start out with in-person selling as opposed to e-commerce so your customer can see and feel and try out how awesome your product really is?

The choice is up to you. But, you need to have a plan.

ONE THING THAT ALL LUXURY BRANDS HAVE IN COMMON

Prada shoes

Exclusivity.

If it was for everyone, then it wouldn’t feel special.

Think of it like an upgrade on a plane. The reason it feels so good to get is because it’s a special treat.

FAQs

How much does it cost to start a luxury clothing brand?

The cost of starting a luxury brand depends on multiple factors including your budget and goals. Starting any fashion brand will have numerous upfront costs and the luxury market is no different. Except it will be even more expensive with additional capital being invested into higher quality materials, or marketing efforts, If you don’t have the capital to build a luxury brand there are ways to bootstrap it as mentioned above in this article. But remember, higher cost, higher margins.

How can I start my own luxury brand?

If you already have experience in the fashion industry, you might have a leg up on those just getting started. Even so, you might find the luxury market quite difficult to succeed in. Successful luxury brands have a unique value proposition, great in store retail experiences and are willing to go above and beyond with customer service.

And, if you have no fashion experience it is possible, but you will need to devote more of your time to research, and learning.

What qualifies a luxury brand?

Real luxury brands are all about high quality (and high price tags). They are selling their clientelle exclusivity and sophistication with rare personalized items and superior customer service. The allure of luxury brands is that not everyone can afford it, which makes brands like Hermes highly sought after. These items are an investment and with quality craftsmanship, can last for decades.

What type of luxury brand are you starting? Let me know in the comments!