Erdem is Sitting Pretty
Canadian born Erdem Moralioglu founded his namesake fashion brand in 2005. Erdem encapsulates femininity by using quality fabrics with whimsical themes. The brand’s designs feature bold colours and embellished patterns, a style which has become synonymous with the designer. Erdem has received numerous accolades over the years and prizes from the British Fashion Council and The Fashion Awards totalling £600,000. Has this staggering amount of money, a feat beyond the wildest dreams of most designers, underpinned the success of the Erdem brand?
100% Ownership
Erdem’s fashion peers include the likes of Christopher Kane, Roksanda Ilincic, Jonathan Saunders and JW Anderson. However, Erdem is the only one to remain independent with the designer still owning 100% of his company. How much of this independence can be attributed to prize money?
The Kate Effect
Erdem’s sales which were £12,500,000 to the year ended 31 March 2019, may also depend on its high-profile clients, such as Kate Middleton, Michelle Obama, Alexa Chung, and Arizona Muse. The impact Kate Middleton has on fashion and buyer’s choice of clothing is significant and her support boosts the UK fashion industry by more than £150 million each year. Kate’s Erdem wardrobe alone is worth more than £28,000.
The Golden Egg
Erdem has collaborated with Net-A-Porter, Mackintosh, Cutler & Gross, Smythson of Bond Street and H&M. Many established and accomplished luxury brands have collaborated with high street favourite H&M including Karl Lagerfeld, Stella McCartney, and Roberto Cavalli. More recently it was the turn of Giambattista Valli to partner with the Swedish multi-national company.
Collaborations with the likes of H&M and Uniqlo are popular since these retailers have many stores and a high footfall. H&M, for example, operates more than 5,000 stores in 74 countries. While mark-up and margin are small compared to a luxury brand’s own products, the volume of sales means that these high street partnerships can be likened to the goose that lays the golden egg. The enormous footfall of these retailers also acts as an agent to heighten brand awareness.
Collaboration Reliant
Erdem has relied heavily on collaborations earning an estimated £2.4 million in the last 6 years, which is nearly 40% of operating profits for this period. In 2018 the brand would have made a loss of £647,000 had it not been for this income of approximately £1,200,000. In the year to 31 March 2019, Erdem had earned less than £120,000 from collaborations but has remained profitable.
Erdem’s Future
Today Erdem is stocked in over 170 retailers and boutiques, including top department stores such as Harrods, Selfridges, Bergdorf Goodman, and Saks Fifth Avenue. After launching an e-commerce site in 2014, the brand opened its debut flagship in Mayfair in London in August 2015. The location remains as the only own-store of the Erdem brand.
Will a single retail location and online sales be enough to sustain Erdem’s profitability into the future? Or are wholesale and collaborations key to the success of the brand?
Read Inside the Brand: Erdem to find out more.
Post by Holly Marshall
