What is a direct-to-consumer (DTC) business model?

A direct-to-consumer business model means a brand sells its products directly to customers through its own channels like websites and branded stores, rather than primarily through third-party retailers. This approach gives companies more control over pricing, customer relationships, and profit margins. For apparel brands, strong DTC operations can provide a buffer against economic challenges like tariffs because they don't have to share profits with middlemen and can quickly adjust their strategies based on market conditions.

Why are tariffs a concern for apparel companies?

Tariffs are taxes imposed on imported goods, and they're a concern for apparel companies because many manufacture their products overseas. When tariffs increase, companies face higher costs for bringing products into the country. This leaves them with tough choices: absorb the costs (hurting profits), raise prices (potentially losing customers), or relocate production (which takes time and investment). Brands with strong customer loyalty can better weather tariff pressures because their customers may accept higher prices or continue buying even during economic uncertainty.

What makes a brand "resilient" during economic challenges?

A resilient brand can maintain sales and protect profits even during economic downturns or challenges like tariffs. Key factors that contribute to brand resilience include strong customer loyalty, pricing power (ability to maintain or raise prices without losing customers), diversified sales channels, control over distribution, and efficient inventory management. Apparel companies with iconic brand recognition and robust direct-to-consumer operations typically show greater resilience because they have deeper customer connections and more flexibility to adjust their strategies quickly when facing headwinds.

What's the difference between these companies and regular retailers?

While traditional retailers primarily sell products from multiple brands in their stores, the companies in this group design, market, and sell their own branded products. They control their entire value chain from concept to customer. Many operate their own e-commerce platforms and branded retail stores (direct-to-consumer channels) alongside selling through wholesale partners. This integrated approach gives them advantages in margin control, customer data collection, and brand experience management. During challenging economic periods, this model can provide more stability than traditional retail, which depends heavily on foot traffic and often faces intense price competition.

15 handpicked stocks

Resilient Apparel Brands

This carefully selected group of apparel stocks features companies with powerful brand loyalty and strong direct-to-consumer sales channels. Handpicked by professional analysts, these brands are positioned to thrive even when facing economic headwinds like tariffs.

Han Tan | Market Analyst

Updated 2 days ago | Published at juillet 11