11 Dec 2014
Fashion's Retail Revolution
The alumni trendsetters who are changing how we shop and what we wearby April WhiteTopics:
When HBS first turned a scholarly eye to retail in the early 20th century, department stores were king. Institutions like Filene’s and Jordan Marsh were the subjects of case studies and class field trips. “Department stores were the arbiters of fashion,” says Rajiv Lal, the Stanley Roth, Sr. Professor of Retailing at HBS, whose current research looks at the uncertain future of today’s department stores. Then, you were likely to find MBAs in traditional business roles—finance, operations—in department stores, but it was rare to find them in customer-facing positions, the fashion piece of the fashion retail business.
To learn more about these seven HBS Alumni trendsetters, click on their photos below:
Today, though, the case studies are on a multitude of fashion businesses—“fast fashion” chain ZARA, “pretail” e-commerce model Moda Operandi, and luxury outlet company Value Retail—and HBS alumni are the founders, chairmen, and CEOs of some of the sector’s hottest properties, from textile manufacturing leader Esquel Group to DIY makeup startup Mink. The business minds are suddenly as influential in what we wear as their creative-side counterparts and are as likely to end up in the pages of Vogue as the pages of the Wall Street Journal. (The Business of Fashion, founded by Imran Amed (MBA 2002), is a savvy response to that phenomenon)
“Until fairly recently, there wasn’t a sense that you went from business school to a fashion brand,” says HBS professor Mukti Khaire. The fashion retail industry didn’t always understand what a business school grad could bring to a creative business, and MBAs, without a strong network in the sector, didn’t see great opportunities in the industry.
One exception was the late Marvin Traub (MBA 1949), who forged a path for MBAs in retail, starting in the bargain basement of Bloomingdale’s. He worked his way up through the ranks of the department store to chairman and CEO, establishing the old, family-owned store as a national luxury brand and the flagship New York store as a destination. After retiring from Bloomingdale’s in 1992, Traub founded an influential retail consulting firm and served as a mentor for many entering the field.
Those who have followed in Traub’s footsteps find that the fashion retail sector looks far different than it did in his early days. “There are two unprecedented forces that are making entrepreneurship in fashion retail more possible and more attractive: globalization and the digital disruption of the shopping experience,” says Khaire, who studies entrepreneurship in creative industries. In the United States last year alone, apparel e-commerce was a $54 billion industry. For the entrepreneur, e-commerce offers low cost of entry, wide reach, rapid scalability, and the opportunity for an MBA to start as CEO.
When Senior Lecturer José Alvarez started teaching the MBA Retailing elective five years ago, enrollment was about 50 students. Now it frequently hits its 90-student limit. “The growth of interest in fashion and luxury products on campus has been tremendous,” he says.
“The vast and rapid changes in retailing and technology are democratizing fashion and luxury,” Alvarez continues. “The age when fashion and luxury were controlled by a handful of people may not be over, but the impact of those few is being diminished by the fact that you have so many people who can get their ideas out in myriad ways.”
Next: Marjorie Yang (MBA 1976) — Instilling Production with Principles »
Class of MBA 2000, Section B
Class of MBA 2002, Section D