INSIDE THE FASHION INDUSTRY – Why the Rise of Vertical Integration Is Changing the Game for Emerging Designers

In the current fashion landscape, a quiet but significant transformation is underway—one that could permanently shift how brands, especially emerging ones, operate and grow. The trend? Vertical integration. While not new, the strategy is gaining new momentum as brands seek greater control over production, quality, costs, and timelines in a volatile global market.

At its core, vertical integration means consolidating various stages of production and distribution within a single company. That could mean a fashion label owning its textile mills, managing its own logistics, or building in-house teams for sampling and small-scale production. For large luxury groups, this often translates into acquiring suppliers. For smaller brands, it might mean establishing direct relationships with manufacturers or working with local ateliers.

A Response to Instability

Over the past three years, the fashion industry has weathered an unprecedented wave of instability—pandemic-related delays, raw material shortages, shipping bottlenecks, and mounting sustainability demands. As a response, major players are turning inward, investing in infrastructure and reclaiming parts of the supply chain they had previously outsourced.

In 2024, Vogue Business reported that LVMH expanded its ownership of tanneries and fabric mills to improve control over its leather goods production and ensure sustainable sourcing (source). Meanwhile, Kering has made similar moves, acquiring Italian textile suppliers to safeguard both quality and supply continuity (source).

According to a recent article in The Business of Fashion, “As supply chain pressures mount, brands are starting to think like manufacturers. In-house production is no longer a luxury—it’s a necessity.” (source)

This shift is not limited to legacy brands. DTC labels like SKIMS and Alo Yoga have invested in vertically integrated fulfillment systems and localized production centers in the U.S. to reduce delivery times and improve inventory responsiveness (source).

Why Emerging Designers Need to Pay Attention

For new brands navigating product development, the impact is twofold:

1. Production Access Is Becoming More Competitive: As large brands acquire or partner more closely with manufacturers, small designers may find themselves further down the priority list. Factories—especially in Europe and South America—are increasingly allocating time to clients who offer volume, predictability, and long-term contracts.

   
   

2. Costs Are Climbing for the Outsourced Model: Without control over key stages of development (e.g., fabric sourcing, dyeing, pattern grading), emerging brands remain vulnerable to last-minute delays and inflated costs. As premium material suppliers align with vertical groups, small brands must pivot toward alternative sourcing or local production partners.

   
   

3. Transparency and Speed Are Becoming the Norm: With increasing consumer demand for ethical practices and fast fulfillment, brands that can’t trace their supply chain—or respond quickly to market feedback—will struggle to remain competitive.

Case Study: Pangaia

The materials science brand Pangaia is a textbook case of strategic vertical integration for sustainability. By partnering directly with scientists, mills, and biotechnologists, the brand maintains control over everything from dye chemistry to fiber development. The result? A highly efficient model that blends storytelling with material innovation, all while avoiding the bottlenecks of traditional sourcing (source).

Case Study: Misha Nonoo

Designer Misha Nonoo made headlines for shifting to an on-demand production model based in the U.S. After facing overseas delays during the pandemic, she began producing each garment only after the order was placed. This not only reduced overproduction but also gave her direct control over quality and fulfillment times—without holding unsold inventory (source).

Strategic Takeaways for Emerging Designers

For designers in my coaching program or anyone developing a fashion brand today, here are key actions to consider:

• Start small, but start local: Explore small-batch production options closer to home. Local ateliers or manufacturing cooperatives can offer better communication, flexibility, and traceability—even if the cost per unit is slightly higher.

  
  

• Build long-term relationships with suppliers: Whether you’re sourcing fabric, labels, or zippers, consistency is key. Suppliers prioritize brands that communicate clearly, pay reliably, and plan ahead—even if they aren’t ordering in large volumes yet.

  
  

• Document your supply chain early: Consumers want transparency, and retailers increasingly demand it. Even if your supply chain is basic now, map it out. Know where your materials come from, who produces what, and how goods move to your customer.

  
  

• Think beyond margins—plan for adaptability: The most resilient brands in 2025 will be those that can shift production timelines, experiment with small capsule drops, and adjust to supply or demand changes without waiting six months.

Vertical integration is no longer just a corporate buzzword—it’s reshaping how fashion businesses operate at every level. For emerging designers, this moment offers both risk and opportunity. Those who ignore it may struggle with access, rising costs, and a lack of control. But those who adapt now—by building smarter partnerships, developing transparent processes, and moving toward localized or hybrid production—can create a more resilient and profitable foundation for the future.

I’ve worked with many designers helping them navigate product development and production management while creating a tailored business plan that fits their vision and operational reality. If you’re launching or growing your fashion brand and want guidance on building a smarter business foundation, you can schedule a free 30-minute strategy call with me here:https://go.oncehub.com/BarbaraSessim