Seems like every week we hear about some wet-behind-the-ears tech start-up that's raised another round of seed funding. And, recent headlines about Kering's investment in Altuzarra notwithstanding, young designers who dream of being the next Phoebe, Stella, or Marc often don't have it so easy.
Fashionista reports today that despite a growing number of prizes available to young designers, like the LVMH Prize and the CFDA Fashion Awards, raising capital is still a huge stumbling block for fashion upstarts. Part of that may be the lack of a novelty X factor with new designers. While it's easy for tech investors to believe that some new app will become the next Instagram and be hugely profitable, gauging the market for fashion can be decidedly trickier. There's less eagerness to invest in an old business model whose market is saturated and profitability very much subject to unpredictable consumer whims — that often change season to season, no less.
CEO of the CFDA Stephen Kolb summed up the issue in a nutshell: Fashion brands often don't receive major investments until they've already grown into a "10, 15, 20, 25 million dollar business." Or, in Altuzarra's case, have already received a multitude of industry awards, including the CFDA. Surely it affects fashion's ability to be creative and innovative if a brand has to prove itself in the marketplace before receiving significant investment. Here's hoping investors realize the importance of supporting start-ups so young designers can have more freedom to innovate. (Fashionista)