Good Morning to the Versace enthusiasts that stood on line to get into H&M at 8 a.m.!  I already see that some are selling the line on  e-Bay for $750.00, in a similar fashion to the Missoni line put out by Target a few months ago.  The thought of dilution of a brand brings to mind the deterioration of a brand due to the counterfeiting of its goods, like Burberry a few years ago, for instance.  However, now brand dilution or brand extension is a strategy employed by many designers.  Is it coincidence that top brands are linking up with stores like Target, Kohl’s, and H&M?

At first glance it appears that due to the economy top brands are creating fashion lines for the masses to expand their audience and their profits.  This very well might be true, since dealing with big department stores can put them in a position that does not yield a profit if the merchandise is not sold, or marked down.  But, to play devil’s advocate or an attorney, some say they are interchangeable.  Let’s say they are doing it to stay a step ahead and in some way prevent copying of their clothing.  It seems that they could be taking a strategic step in diluting their own brands in a positive way.  The thought process being “Before they do it, we will do it and make money from it.”

Remember Forever 21, known for copying a dress of a top designer in the very moments of seeing it walk down the runway.  Why did Vera Wang create a bridal line inspired by Kim Kardashian’s gown for David Bridal?  In essence she is knocking off her own designs.  She found a way to capitalize on a market, thereby cutting off those designers that live to copy.  So, do luxury brands like Versace and Missoni take away from their top-selling lines by creating these lines for the masses.  I believe in the long run, if done right, no they won’t but it also depends on the luxury brand and the overall marketing strategy for the high-end line and the new line made for the masses.   We will follow how this new business model unfolds for these top luxury brands.

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