The Retail Segment
As mentioned in Chapter 3, retailing is the
selling of merchandise directly to consumers.
This is done through a store or other method, 4-6.
As shown near the bottom of the right side of 4-1,
retailers buy fi nished goods in large amounts
from the apparel segment that precedes them in
the pipeline. Retailers pay a wholesale price for
this quantity buying of fi nished products. They
put these items out “on the fl oor” of their stores
for sale at a retail price, which is higher than the
wholesale purchase price they paid for the items.
The markup covers costs of heat, lights, taxes,
sales help, and other expenses. The retail price
also includes some profi t for the retailer.
Retailers do single-item selling of the
garments, accessories, and other goods to
consumers. They sell one item at a time directly
to the many different people who will use the
products. Consumers are at the end of the soft
goods chain, but satisfying their wants and needs
is the objective of all the preceding companies in
the pipeline.
The Four-Groups
Approach
The four-groups approach is a different
way of showing the same fl ow of goods from
beginning to end. The four-groups approach
separates the overall fashion industry into
four main groups of businesses. They are the
primary group, the secondary group, the retail
group, and the auxiliary group. They are all
interrelated, 4-7.
Primary Group
As with the previous chain, textiles make up
the fi rst link. Combined with leathers and furs
(and some plastics and metals), they comprise
the primary group of the four-groups approach.
This group provides the raw materials from which
fashion products are made. Varying amounts
of fi bers, fabrics, leathers, and furs are sold to
apparel and accessory producers. Some of these
primary products are also sold to fabric stores
and production specialists who move them on for
home decorating or industrial uses.
4-6 Finished goods and accessories
are put on display at retail stores, where
consumers can look at the choices and
make purchases.
The Four-Groups Approach
End users Consumers
Primary
group
(raw materials)
Secondary
group
(manufacturing)
Retail group
(final
distribution)
Textiles
Leathers
Furs
Garments
Accessories
Other
fabricated
products
Stores
Catalogs
TV sales
channels
Other selling
Auxiliary
group
(fashion-related:
trade associations,
publications,
consultants,
agencies)
4-7 The four-groups approach to the
channel of distribution is similar to the
previous soft goods chain, but shows
the additional auxiliary group that gives
supplementary support to all other parts of
the fashion industry.
Ch04.indd 67 Ch04.indd 67 2/5/2009 2/5/2009