The fashion market has become "polarized" and "hollowed out" by increased online shopping, the success of cut-price retailers and single-brand luxury sellers, according to analysts at Bernstein, News.az reports citing Investing.
In a note to clients, the analysts argued that this trend has dented multi-brand retailers -- or fashion firms that offer a variety of labels instead of just one -- and "reduced consumer choice."
"Mega-brands have integrated downstream into direct mono-brand retail, increasing competition in a retail format that has also seen further pressure from the rise of online shopping," the analysts led by Luca Solca wrote.
"Multi-brand online retailers enjoyed their brief time in the sun, only to face the same situation that department stores and independent multi-brand retailers experienced before, as mega-brands moved to control their own in-house" online businesses, they added.
"The demise of multi-brand in fashion and the rise of mega-brand mono-brand retail is reducing mid-price consumer choice. Product companies have failed to find distribution avenues, and have resorted to closing or subcontracting."
In response, multi-brand department stores in Europe, such as Harrods, have either retrenched to iconic locations or specialized their products, while their U.S. peers -- like Nordstrom or Saks Fifth Avenue -- have consolidated and partnered with internet giants, the analysts said.
"Ferreting out the winners would provide significant long-term opportunity," they noted.
Yet multi-brand retailers still play an important part in the fashion industry by helping to facilitate product discovery, springboard smaller names, and curate the market, the strategists argued, adding that these roles remain crucial for the wider sector.
"It is clear that multi-brand retail will not come back the way it was, with the players that were. But there is still a huge need for the functions it played," the analysts said.
