Wednesday, 14 October 2009

"Fashion is Risk"

The quote that provides the title of this blog comes from Sir Philip Green, the owner of Arcadia.
It is a good example of marketing as a risk management tool for upside risk. Fashion is about understanding and creating trends in the market place, about limiting the downside by not ordering too much stock , by offering at the right prices for the target market and by playing safe for at least part of a company's range when they are as big as the Arcadia Group.

But it is also about taking risks, like starting up in New York where Top Shop is a new, unknown name. How does Sir Philip mitigate the risk? By linking with Kate Moss who is a well known fashion icon in New York, by careful research as to what will sell at what prices and in what sizes and colours, by choosing a store in a great location so that it gets maximum visibility and by revving up the publicity machine.

Yes fashion is risk but a smart operator like Sir Philip knows how to manage the downside so he gets the upside benefit.

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