Perhaps nothing is more inviting to a younger consumer raised on social media these days than access paired with value.
And what better way to exemplify the union of the two than Zara’s new partnership with John Galliano?
Before the famed—and once exiled—former Maison Margiela designer cemented his two-year marriage with the fast fashion retailer, speculation was rife that he might actually be headed back home to LVMH, or perhaps for a stint at the Costume Institute.
Fitting…but not exactly promising in a world of luxury where budgets are tight but aspirations for high-end products remain intact.
A higher calling: “We’re going through a macro softness period in luxury,” Michael Prendergast, managing director in the consumer and retail group of Alvarez & Marsal, told Retail Brew. “Everybody wants and has the aspiration to have a little bit more luxury in their life…[but] what’s happened is the middle offering has gotten squeezed.”
As such, there has been a “merging” of value-oriented items in luxury, he added.
Rita McGrath, academic director in executive education and professor of management at Columbia Business School, believes although Galliano remains a “super exclusive” and “really beloved”—albeit controversial—designer, this type of partnership gives him reach and leverage that’s unparalleled.
“Increasingly, the age of value creation is devolving to small teams and even individuals,” she told Retail Brew. “You can have his impact by so-called ‘editing’ Zara’s past collections, and then use their leverage to have just this enormous impact and presumably enormous value creation for himself without being tied to these boutique houses that he’s been previously associated with.”
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Haute connections: Meanwhile, for Zara, the partnership represents a formidable foot forward in the current race of mass market retailers contracting with luxury designers with impressive portfolios—Claire Waight Keller at Uniqlo, for example, or Zac Posen at Gap—as they compete against ultra-fast fashion giants such as Shein and Temu.
According to some estimates, partnering with high-profile designers can drive up revenues for fast fashion brands up to 30% annually. As for Uniqlo parent Fast Retailing, profits will reportedly cross over 610 billion yen (~$3.84 billion) this year as it continues to foster collaborations with the likes of Keller, JW Anderson, and Lemaire.
Prendergast called it a “no-lose” situation for Zara. Along with capitalizing on a sort of cultural cachet by having an iconic name, the merger also helps the brand draw in curious customers, even if they don’t initially plan on buying the product.
“It’s a win from publicity, a win from inspiring customers to come in the door. It’s a win from an inspiration of the product that [Galliano’s] going to be creating,” he said, adding that it will also help “elevate” its store environments.
It’s also why we’re likely to see more such partnerships in the future. In McGrath’s view, this is “classic disruption”—taking something once exclusive and inaccessible, like Galliano’s couture, and making it “easy and accessible,” and more affordable.
“It has all the earmarks of the classic disruptive strategy,” she said. “And what we know about those is that they do tend to drive growth.”