Economics x Fashion: Why high-low designer collabs work, and why they don’t
On the morning of June 30th, after months of build up, the Louis Vuitton and Supreme collaboration finally ‘dropped’ in pop-up stores around the world. At Sydney’s Bondi pop-up, the collection sold out in minutes, leaving hundreds who had been lining up for hours literally out in the cold. Soon after, pieces from the Supreme x Louis Vuitton collection could be found online, selling at five times their original value.
The hype around the Supreme x Louis Vuitton, and the Supreme brand itself, can be partly explained by simple supply and demand. Supreme founder James Jebbia has said that if he knows he can sell 600 of a product, he will only make 400. Those who are able to snag an item now have bragging rights and street cred from owning an exclusive product. There are only ten Supreme stores in the world – if you compare this to the 3,708 Louis Vuitton stores around the world it is easy to see why there is so much frenzy when new items come out.
In the last decade, high-low collaborations have become the norm in the fashion industry. Luxury fashion houses such as Alexander McQueen, Jean Paul Gaultier and Rodarte have all designed collections for Target. Similarly, esteemed designers such as Alexander Wang and Isabel Marant have collaborated with Swedish fast-fashion giant H&M to create must-have limited edition pieces.
These collaborations have been just as hyped as Supreme x Louis Vuitton. Back in 2007, Target’s collaboration with Stella McCartney sold out within minutes of going on sale. Italian fashion house Missoni’s 2014 collection with Target also sold out within minutes, crashing the Target website, resulting in a massive inventory and shipping mess. H&M’s collection with Chanel and Fendi creative director Karl Lagerfeld sold out within the first hour, with secondary Ebay markups causing further heartbreak.
But not all high-low collections do as well. H&M’s collaborations with French luxury fashion houses Maison Martin Margiela and Kenzo failed to draw crowds and sell out in its opening days. Designer Joseph Altuzarra’s collection with Target similarly failed to attract customers, with many pieces later ending up on the clearance racks.
All the hype in the world can’t make up for poorly made or – to be blunt – ugly clothing. Shoppers can’t be tricked into buying something just because a name is attached to it. Returns for the Versace x H&M collection were so high that the retailer banned returns for the subsequent collection. For Kenzo x H&M, customers only had a 3-day window to return items they did not want. Despite being touted as lower-priced versions of high-end products, the clothes are still fast fashion-quality garments, to be bought and worn a handful of times before they fall out of style.
While part of Supreme’s allure is its scarcity model, the clothes themselves are undoubtedly well-made, and most importantly – cool. The New York Times notably stated: “No offense, but if you don’t know about Supreme, maybe it’s because you’re not supposed to.” In an age where consumers are ever more looking for value for money, limited edition collections must be able to provide both style and quality, and cultivate a certain on-trend aesthetic in order to succeed.
There was a time when high-low collaborations were seen as degrading to the luxury brand. In 1983, Roy Halston, whose designs were worn by New York high society, was invited to create a collection for JC Penney, a low-end department store for a reported $1 billion. The collection, an attempt bring bargain-priced couture to the mass market, spectacularly failed. The collection was poorly received, and customers thought he had diluted the brand by bringing it to the mass market.
This failure put off high fashion designers from collaborations for nearly twenty years. It also explains why capsule collections are mostly sold in limited amounts – while diffusion lines can often open up brands to a new market of customers, they are by no means a guaranteed recipe for success. Shoppers find value in an item’s exclusivity, and extensive social media presences turns key pieces into recognisable status symbols.
The ‘success’ of one-off collections is not simply calculated by sales profit. Limited production quantities ultimately mean these collections won’t make much of an impact on the company’s bottom line. Instead, brands try to cash in on hype and attention. For instance, it was reported that, H&M ordered 40% less stock for its Alexander Wang collaboration that it had for its previous collections in order to ensure it sold out quickly. Designer collaborations have become more about the pomp and ceremony of opening day and the creation of news camera-friendly crowds. The clothes are secondary.
Even so, the core of collaborations must still be about the designs themselves. No amount of paid Instagram promos or celebrity models can sell clothes that are simply not what consumers are looking for.
 O’Brien, G. (2009). James Jebbia is Supreme. [online] Interview Magazine. Available at: http://www.interviewmagazine.com/fashion/james-jebbia-is-supreme/#_.
 Degbé, E. and Balu, M. (2016). À côté de Balmain l’an passé, la collection H&M by Kenzo c’est calme plat au magasin des Champs-Élysées. Huffington Post. [online] Available at: http://www.huffingtonpost.fr/2016/11/03/h-et-m-by-kenzo-h&m-balmain-magasin-champs-elysees_a_21597780/.
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