Startup 2018: Who’s shaping the year ahead
Courier's full run down of the key startup sectors, companies and issues set to influence the year ahead.
In the summer of 2015, we talked to teenagers queuing up outside the London store of skate and streetwear brand Supreme for the ‘drop’ of a particularly coveted limited edition collaboration. The teenagers there were mostly buying products to sell later on Facebook for three times the price they paid.
Since then, Supreme has continued to surge, emerging as one of the most intriguing brands in apparel, influencing and spawning a slew of new streetwear brands. It has also become the vehicle by which thousands of teenagers make spare cash, through selling its hoodies, jackets, bags and more obscure products. The company has attracted the interest of mainstream fashion and even luxury groups as a result of its cult status among a growing number of young people.
Most recently one of the biggest private equity firms in the world acquired a 50% stake in Supreme, which saw it valued at £763m.
It’s been over 20 years since south-Londoner James Jebbia opened a Supreme shop in New York, but its impact has only become clear relatively recently. The clothes are of limited interest to investors and even the fashion industry. Instead, there has been confusion around the anarchic way streetwear brands like Supreme and its counterpart, Palace, have done business.
They’ve broken the rules in pricing, retailing, seasonality and marketing (see box), and have left the biggest companies in apparel flat-footed as their modes of operating look increasingly outdated.
Compare this to traditional luxury brands like Prada and Gucci, for example, with their seasonal collections of products that barely change, available in shops, department stores and online to anyone in the world.
What Supreme and Palace have done is calibrate their business models around the internet, where anyone can access anything, and people have increasingly shortened attention spans.
Exclusivity in this context means something altogether new. Ashley Smith of fashion consultancy The Lobby says this isn’t a trend, but potentially something with long-term implications: ‘There is a structural change in how products are marketed and distributed.’
He says exclusivity as defined by price is no longer relevant. Thanks to the internet, luxury is less rarefied than it once was.
Exclusivity today is a run of 100 t-shirts through a collaboration with an artist, or a pair of trainers only available to people willing to queue from 7am on a wet morning.
Furthermore, short attention spans have created monsters of today’s young consumers, who are voraciously demanding something new. Smith adds: ‘The deluge of content today means there’s an insatiable appetite for anything new. People want new weekly, daily, even hourly.’
What next? Brands today are calculating how to harness exclusivity within the worlds of information overload, unfettered access and the relentless hunger for something fresh.
The only constraints are the potential for consumer apathy and industry exhaustion amid the cranking up in the volume of collaborations, limited editions, frequent releases and that all important ingredient in streetwear: hype.
Fashion buyers predict weariness among consumers for limited editions, weekly releases of products and eye-catching collaborations is still a long way off. They point to the success of the brands behind streetwear’s most notable names like Shayne Oliver of Hood By Air, Demna Gvasalia of Vetements and Virgil Abloh of Off-White, as well as brands such as OAMC and Noah.
‘They’re trading in street culture rather than product,’ says Reece Crisp, head buyer at concept clothes store LN-CC.
‘It’s still fashion but the onus is more around crafting something way beyond product lines. These new guys are creating rich worlds that feel real, they’re collaborating with interesting people and creating a load of desirability by being ultra careful about what and how many products they’re releasing, and where,’ he adds.
The likes of Supreme and Palace will have to protect their cachet as each becomes more visible – and begins to compete with new, fresher streetwear brands.
Successful brands will follow the template of rejecting distinct departments for product, retail, PR and wholesale. Everything is entirely integrated, and the ability to mesh it all together deftly lies at the heart of creating demand.
For Big Fashion, this level of integration remains unfathomable.
There are six principal characteristics that distinguish Supreme’s business from a typical fashion brand:
1. Limited distribution
Supreme products are only sold through its own six shops around the world and fashion retailer Dover Street Market.
2. Limited editions
Products are made and sold in small runs. Once they’re gone, that’s it.
3. Weekly and monthly drops
Products are released through stores at regular intervals as opposed to the seasonal cycle most brands operate within. There are no fashion shows or media briefings.
Supreme has created products in partnership with brands and cultural icons as varied as Muhammad Ali, Andy Warhol, The North Face, Morrissey and Louis Vuitton.
5. Culture over product
There is very little design or craftsmanship in Supreme’s products. Instead, alongside heavily-branded clothing, fans can also purchase items like a brick with the company’s logo on it or a New York subway Metro card with the brand name splashed across the back.
6. Resale markets
Platforms like Ebay and Grailed are full of Supreme products that sell for several times their original retail price.