SPECIAL REPORT - MBA+1 – Welcome to the Luxurious World of Business & Fashion - Blog

Kim Kardashian and Harvard Business School have a lot more in common than enviable endowments. The school and its alumni have made considerable investments in pursuing technology-enabled entrepreneurship. A number of HBS, and other top MBA, alumni have plunged into the world of fashion e-commerce, starting companies similar to Kim’s ShoeDazzle or the Olsen Twins’ StyleMint. Not to be outdone by new rivals, established brands, such as the French fashion house of Louis Vuitton and the Italian fashion house of Salvatore Ferragamo, have, respectively, invigorated their business lines with mobile apps and strengthened their balance sheets with initial public offerings (IPOs) this year. Michael Kors has also followed suit with an IPO this month. With the rise of women in business, the business of fashion – in particular online apparel - has experienced spectacular growth. Our gift to you: a special report revealing a desirable opportunity for the sophisticated professional. You could say ‘tis the season of fashion.

 


AN ELEGANT ENSEMBLE – VENTURE CAPITAL, ENTREPRENEURS AND MBAs

 

The marriage of venture capitalists (VCs), entrepreneurs and MBAs has largely been that of the single-gender type. So much so a Castro Street, San Francisco resident would blush. This romance has largely excluded women. For instance, according to VC insider Jeffery Bussang author of Mastering the VC Game, the venture capital industry is over 95% male. A recent controversial article entitled Stop Telling Women To Do Startups will do little spur growth in women’s meager representation in tech entrepreneurship. On the campuses of top business schools, women are steadily closing the gender gap with a male-to-female ratio of about 3:2. The world of fashion, in particular e-commerce fashion sites, female representation is decidedly different. Through the leadership of savvy business women (of which many are MBA graduates) and explosion of “Web 2.0”, the fashion industry is being disrupted. Others are being forced to take note. Retail industry giant, Amazon notes that although its e-commerce apparel unit only constitutes less than 5% of its sales, it is the most rapidly growing segment.

% OF WOMEN MBA GRADUATES
Source: Catalyst 


SCHOOLS AND SITES – LAYERED PATTERNS, RICH APPEAL

 

The rules of fashion, business and luxury remarkably seem to have at least one rule in common: conforming to orthodoxy is the death knell to innovation. Many business schools and fashion websites have taken this to heart. The risk of failure is subsumed by the appeal of creating a vibrant, bold distinct identity. In breaking through a saturated job market, this approach may be just as apt to develop your unique career. Fashion guru Tim Gunn has redefined what was widely considered a fashion faux pas – checkered, stripes and plain layers together – into a signature celebrated look. Recently the deans of top business schools have embraced innovation with a gusto normally reserved for contestants of a reality show. Advanced degree female graduates have founded a number of hi-tech fashion ventures such as Rent the Runway, Gilt Groupe, Rue La La and L-Atitude. The pairings of revered business schools, such as Columbia Business School, which is better known for its Wall Street alumni, with upstart web sites may seem at first a bit odd. But schools have always sought to be relevant to developing the next “captains of industry”. The shift by schools is an indication of the confluence of rise of venture capital money, prominence of Web 2.0 businesses and global demand for innovation by their constituents. And a fight for their own relevancy. For your own career, searching for opportunities which at first may appear to be paradoxical can unlock rewarding career opportunities. For example, large established companies with independently managed subsidiaries may offer you more creativity and autonomy in a small, nimble team. Conversely, finding innovative start-ups that offer a breadth of institutional exposure through institutional investors and strategic partners offer you the opportunity to build a multi-layered professional network. Presently, the business of fashion is at an exciting inflection point and warrants a closer look for your career.


WHY THE MBA IS STILL FASHIONABLE

The e-commerce apparel industry utilizes some of the most technical and advanced tools such as social commerce gadgets, imaging techniques and powerful recommendation algorithms. Conventional MBA skills, such as market assessment, negotiations and organizational development, are all readily deployed in the e-commerce industry. But given the early stage of these ventures, the enigmatic MBA “network” is extremely relevant to building these businesses. Dogged by an onslaught of recent criticisms questioning the value of MBA, top business schools have been resilient in their appeal and have adapted to a more demanding consumer base. London Business School graduate, Anu Duggal, and co-founder of Exclusively.In, an e-commerce fashion venture focused on Indian-inspired luxury lifestyle with offices in New Delhi and New York City, has found tremendous value in her advanced degree. Many fashion focused executives have found that their MBA has enabled them to more quickly establish cross-border relationships and aided in negotiations with vendors, partners etc.

 


GLOBAL STYLE – HONG KONG, NEW YORK & MILAN

Globalization has impacted businesses of all sizes on many levels. The three cities listed in the heading, Hong Kong New York, and Milan host the stock exchanges where some of this years most anticipated fashion IPOs occurred. The decision by major houses on where to publicly list their stock was not dictated necessarily by where they were founded. Reporting rules and the level of institutional and retail demand for the companies’ shares were also among their chief concerns. These factors led Italian fashion house Prada to ultimately list on the Hong Kong Stock Exchange. In approaching your career with a global view, by being location-agnostic you will be able to command more value and have more influence in your negotiating stance with prospective employers.  The appeal of the e-commerce fashion market has inspired female entrepreneurs globally to found companies such as the Turkish flash sales site Trendyol.com and the Indian based Exclusively. In. The Boston Consulting Group ’s authoritative book entitled Women Want More notes the tremendous opportunity that the rising income of women and their influence worldwide represents: an estimated $15 trillion of consumer spending will be controlled by women by 2013.  More than the GDP of Brazil, Russia, India and China combined. Within the e-commerce fashion marketplace, women are crossing the chasm of avid consumers to controllers and creators of the content. This should be an inspiration to all, regardless of gender or location. Grow & Lead.

MARKET CAP VALUATIONS (Billions; USD)
Source: Bloomberg; December 2011
Market Cap Valuations_Fashion MBA