How Much Do Designers Make On Mass Market Collaborations?

Designers have different reasons for collaborating with mass market retailers on their much-blogged about collaborations, but all of those projects have one thing in common: lots and lots of money.

The New York Times reports that for designers young and old, working with stores like Target or H&M can be a very lucrative proposition. In some cases, these partnerships can start with seven-figure fees — and that’s before you factor in the designer’s cut of the profits.

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While the deals range in size and terms depending on how big a designer is, and how much the retailer they’re partnering with wants them to do, the Times found that “the typical fees paid to designers have generally more than doubled over the last five years.” And when you consider that designer partnerships are relatively new retail concepts, that’s some pretty exponential growth.

Just how much money are we talking about here? Sources told the Times that in 2003, H&M paid designers Karl Lagerfeld and Stella McCartney $1 million each to design pieces for their collaborations. Madonna, who designed M by Madonna for H&M in 2007, is said to have been paid $4 million for her efforts. What a difference four years makes, eh?

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One fashion talent manager who spoke with the times said that “deals with the biggest players in the fast-fashion sector now typically include cash payments of over $1 million.” But smaller names in the industry can take home pretty nice slices of pie, too — in 2007, Target was reportedly paying its Go International designers fees of around $250,000 each. By the time the Alexander McQueen and Rodarte collaborations came along, we’d be willing to bet those fees got higher.

So while it’s safe to assume that Donatella Versace and Alber Elbaz pocketed multiple millions on their collaborations with H&M, there’s really no surefire way of telling just how much a designer will make on his or partnership. But chances are, if you’re better known and more expensive, you’ll probably get paid a lot more than a newer, more affordable brand.

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Predicting just how big or successful each designer rollout is going to be is part art and part science, said Trish Adams, the senior vice president for apparel and accessories at Target. Executives take into account the historic performance of other lines, how the name is perceived among its customers and even the price differential between the designer merchandise and what will be sold at Target. Still, demand for the Missoni clothes and home designs exceeded expectations, leaving some customers disappointed when many products were not available.

We wonder if designers get bonus fees for selling out their collections within a week? You can ead the rest of the Times piece here.

[The New York Times]

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