These days, thanks to the internet, fashion has never been so international. Customers can now easily follow global trends, find out about exciting new work by small-time designers in far off countries, and make purchases in any number of different ways. This is reshaping the fashion industry and the networks of finance that support it, creating one of those situations where there are real advantages for clear-sighted investors with good instincts.
Why invest in fashion?
Many people are crazy about fashion and spend all their time reading about brands and checking out the latest styles. Why not put this knowledge to use? Put it this way: the people who correctly identified Burberry as the next big thing back in 2010 could have made a profit of $1.24 per share within a year. If you have expensive shopping habits, this is a great way to finance them. If you’re a more experienced investor considering this sector for the first time, you’ll find it incredibly well documented, which is great when doing research.
What size suits you?
Fashion companies come in all shapes and sizes, which makes it possible to balance an investment portfolio much more effectively than in most other single sectors. There are massive multinational chains with long-established brands and up-and-coming boutiques that offer less stability but potentially much higher returns. There are also companies catering to market niches such as specific subcultures – some of which have staying power – or to people with non-standard body shapes. As well as thinking about the size and market segment of each company, it’s useful to think regionally as fashions from specific areas can become briefly but intensely popular in other areas for cultural reasons.
A fashion investment success story
One man who has made a success of investment in the fashion industry is Fahad Al Rajaan, a Kuwaiti finance expert and a former director of Al Ahli United Bank. Fahad Al Rajaan has turned his interest in style and fashion into support for its creators and for fashion retail outlets.
How to get started
Before investing for real, it’s a good idea to spend a few months making imaginary bets and tracking what happens to them. This will help you to get a feel for the process and protect you from making expensive mistakes. It will also help you to devise an investment strategy, working out the parameters of investments you’re willing to take – how much risk is acceptable, what your financial ceiling is, how long you can afford to wait for shares to ripen, and so on. Once you have this in place, you can look out for good deals and make quick decisions without getting into trouble, as long as you stick to it.
As in any area of investment, there are no guarantees of success in fashion, but the better you know the business, the more likely you are to do well. It’s a chance to make money doing something you love.