Success indicators in various fashion business models

Abstract

The objective of this study was to analyze the business models of various fashion companies, based on their 2009 financial indicators, to understand how different operation models correlate with success and whether selected performance indicators monitor operational success. Based on their business models, the companies were classified as follows: brand retailers, brand marketers, luxury brands, and multi-brand retailers. Brand retailers with a high net profit margin and a rapid turnover of inventory were significantly more profitable than traditional multi-brand retailers. Luxury brand companies were another successful group. Though their stockturn was low, their net profit was high because of their unique design and high brand value. Brand marketers could adapt well to rapid changes, because their business was primarily based on intangible assets. Furthermore, multi-brand retailers showed the lowest financial ratios because of their slow stockturn and low net profit margin.