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Could own label bring indies out of the margins?

The proliferation of brands is making it tougher for indies to sell at full price and find a point of difference. So now some indies see own label as a way of controlling their destiny.

With consumer confidence at an all-time low and purse strings tighter than ever, indies are constantly thinking of ways to keep their customers coming back. Many are now opting to launch their own labels, which ensure them both exclusivity and better margins.

Increasingly, indies are unhappy with the performance of brands, complaining they are failing to deliver a pitch-perfect product. The landscape is also shifting with regards to what high street multiples offer their customers.

Multiples such as Topshop, New Look and River Island, which have historically dominated own label, now boost their offering with brands. Indies have suffered as a result of stocking the same brands as department stores and being forced to go on Sale when they do. Having exclusive brands means they can discount less.

The next step on from exclusive brands – own label – is fast becoming a popular tactic for indies. A recent Drapers survey of 50 indies found that 14% of menswear indies and 7% of womenswear indies already stock their own label.

Maureen Hinton, retail analyst at Verdict Research, believes the number of indies offering own label is set to grow. She explains that with multiples having a full branded offer, it is becoming harder for indies to source and secure exclusive brands. Launching an own label helps get around this. “It’s a good idea because it differentiates them. They’ve got something completely unique in their store. They can also offer customers something that targets them directly.”

The margins on own-label product are also better because indies can deal with the supplier directly. Hinton says: “Differentiation is necessary. In fact, it is essential in the current economic climate. Retail in general is becoming saturated. There is a lot of competition so you really do have to stand out from the crowd.”

Women’s young fashion indie Lagom in Gabriel’s Wharf, south London, launched its own label as a wholesale brand for spring 12. Owner Irena Lane said sales had been going really well and the brand now has 10 UK stockists. However, she warned small indies that: “Finding the correct manufacturing facilities is a tricky thing because there are a lot out there.”

Among other indies to have launched their own label are luxury womenswear indie Anna (which has seven stores in southern England), London designer indie Browns and two-store premium womenswear indie Austique.

David Conaghan, co-owner of young fashion indie Chocolate Clothing in Derry, is looking to launch a short-order range of own-label party dresses next year because it offers better margins and control over product. “We know what prices, colours and styles work. Obviously we’ll have a lot better margin. If we had plenty of stores, then we’d definitely push the button on it, but when it’s just one store and the website it is difficult to reach the minimums,” he says.

Design and sourcing company One Brand, which launched earlier this year, is creating own labels for six indies. It offers indies a sample and production package, allowing them to either put their own branding and labels into a basic collection or design their own range without minimum order requirements. Premium indie Serene Order in Solihull and men’s young fashion indie Roscoe & Crombie in Worcester are among the six using the service.

One Brand managing director Dan Strang says indies are looking to own label because it helps to reinforce their reputation as a fashion destination. The cheapest route for indies to offer their own label is to have personalised labels sewn into product from stock houses.

One young fashion indie says: “I know where one brand gets products and I can go to the wholesaler and get it for half the price and put my own label on it.”

However, this route does not allow indies to create a personalised range that will cater to their customers’ needs. By designing a range specific to their store and shopper profile, indies can ensure they stock something that will create more excitement among their customers. This option is more expensive.

Eric Musgrave, a consultant for the Fashion Association of Britain, says this can be a tough route for small businesses. He says: “My view is that you have to be of a certain size to make it do-able. You’ve got to have more knowledge than people would first understand – pricing, the quality and the technical spec.”

Paul Turner Mitchell, co-owner of Rochdale young fashion indie 25 Ten Boutique, who is working to create an own label (although he won’t give further details), says it is “incredibly difficult” and “time consuming”. Having more control over product and stock levels, and being able to obtain better margins, however, means many indies might see it as a risk worth taking .

The making of Austique

An independent way of bucking the downturn

History The womenswear indie’s first shop opened on London’s King’s Road eight years ago, and its own label launched in 2008.

The label The Austique label’s autumn 12 collection (pictured) is made up of 70 pieces, mainly occasionwear.

Wholesale This is Austique’s first season wholesaling, selling to indies such as Cricket in Liverpool as well as Harvey Nichols. It has 20 stockists.

Product mix Austique’s own label makes up 18% of the offer in Austique’s two stores but will never rise above 25%, because owner Katie Canvin believes it is the indie’s mix of labels and variety of product that keeps customers loyal.

International ambitions  Canvin says: “Our own label gives us huge potential to expand overseas, thereby building on the Austique brand and ultimately making us a strong business.”

Story in numbers

14% of menswear indies have their own label

7% of womenswear indies stock their own label

6 indies are working with design company One Brand on own labels

60 pieces in Austique’s own-label collection offered at wholesale for spring 12 70% is targeted level of own-label stock at indie mini-chain  Anna by 2015

2010 is the year designer indie Browns launched its Bfocus own label

Readers' comments (2)

  • We are a happy bunch of people at One Brand, but it's always disheartening to hear unfounded comments such as the quote above.....

    Read our rebuttal here

    Unsuitable or offensive? Report this comment

  • I think you may have misread that quote, the indie is referring to an unnamed brand rather than One Brand the company. Sorry for any confusion this may have caused.

    Unsuitable or offensive? Report this comment

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