Your credit card has a balance of $1500 and is
assessed an interest fee of 15%. What is your
new monthly credit card balance?
$1500 * 15% =
Spend Your Budget on
Accessories
"Cool shoes, interesting
jewelry—those can really
elevate your look," says
stylist Isabel Dupré, who
notes that a wardrobe of
the right little extras lets
you be more relaxed
about the rest of your
outfits.
Topic
Chapter 1 Vocabulary
Chapter 1 Vocabulary
Elements of Design Flip Book
Chapter 1 Notes. Introducing Fashion
Color Schemes
Chapter 1 Notes. Introducing Fashion
Body Shape Outfits
Chapter 1 Notes. Introducing Fashion
Fashion Through the Ages Sketches
Chapter 1 Notes. History of Fashion
Identifying Target Markets
Chapter 2 Notes. Marketing Basics
Functions of Marketing
Chapter 2 Notes. Functions of Marketing
Secondary Markets Graphic Organizer
Chapter 3 Notes. Fashion Businesses
Page #
4
5
6
7
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9
10
11
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17
18
19
Secondary Markets Graphic
Organizer
Chapter 3 Notes.
Fashion Businesses
Notes
Notes
Notes
Notes
18
19
Bell Ringer – (5 minutes)
Introduce Chapter 3.1 – (5 minutes)
Lecture and Notes – (25 minutes)
Explain the three main segments of the
fashion industry.
Describe the primary forms of business
ownership.
Identify the key risks faced by fashion
businesses.
 Primary Market
 Secondary Market
 Tertiary Market
 Retailing
 Sole Proprietorship
 Partnership
 Corporation
 Risk
 Risk Management
Primary Market  Businesses that grow and
produce the raw materials that become a
fashion apparel or accessory.
Secondary Market  Businesses that
transform the raw materials into fashion in
the merchandise phase. The link to the retail
world.
Tertiary Marketing  Stores that sale the
fashion merchandise.
These businesses play a key role in the
development of fashion.
 Involves technical research and planning as well as
complex production processes.
 These businesses must be aware of current
consumer needs and fashion trends.
The textile industry is the largest segment
Industry produces the fiber, leather, fur, and
any other substance involved in production.
 Cotton  Cotton Plant
 Linen  Stem of a Flax plant
 Wool  Sheep
 Silk  Silkworm (Caterpillars) cocoons or in a factory
 Rayon  Fake silk, produced in a factory from
cellulose
 Nylon  Synthetic fiber, made in a factory
 Polyester  Made by reacting dicarboxylic acid with
dihydric alcohol.
 Leather  Cowhide or animal skin
 Fur  Animals (Fox, Raccoon, Mink, etc)
Produce garments by transforming textiles to
the finished product, or wearing apparel.
 Businesses are responsible for designing,
producing, and selling the goods to the retailers.
Manufacturers, Wholesalers, Contractors, and
Product Development Teams
Handle all operations such as buying the
fabric, designing or buying designs, making
garments, and selling and delivering the
finished garments.
Example: American Apparel
Design staffs produce the designs.
Purchase the textiles or other raw materials
necessary for the designs and then plan the
cutting of the materials.
Coordinate the selling and delivery processes.
*Similar to manufacturers, but no dot make the
clothing.
Responsible for many aspects of production –
from sewing and sometimes cutting to the
delivery goods.
May produce designs for merchandise that
carries a store’s label.
 INC for Macy’s
Design, merchandise, and outsource work to
contractors.
The selling of products to customers
 Department stores, specialty stores, discount
department stores, variety stores, off-price stores,
warehouse stores, outlet stores, and non-store
retailers.
Sole Proprietorship
Partnership
Corporation
Business is owned and operated by 1 (one)
person.
Requires licensing from local authorities, but
is not controlled by federal government
regulations.
Risks  The owner takes responsibility for all
assets owned, whether used in the business
or personally owned.
Taxes  The business profit is taxed as
personal income tax at a rate less than that
imposed on corporations. The owner includes
the income and expenses of the business on
his or her personal tax return.
PROS
 Freedom to operate as
the owner feels
necessary
 Sell the business
 Remains in existence
for as long as the owner
is willing or able to stay
in business
CONS
 Financial management
and liability is the
responsibility of the
owner
 Huge task for one
person
A business created through a legal
agreement between two or more people
who are jointly responsible for the success or
failure of the business.
 The agreement includes arrangements for the
contribution of each partner and division of
profits and it states the authority of each partner.
 Each partner contributes money, property, labor,
or skill, and expects to share in the profits and
losses of the busness.
Taxes  Fewer regulations than a corporation
and each partner is taxed separately on
individual tax returns.
 Must file an annual information return to report
income, expenses, deductions, profits, and losses
from its operations. However, it does not pay any
income tax.
Personal Liability  Each partner is personally
liable for debts of the partnership.
A partnership ends upon the death or
withdrawal of one of the partners, but most
partnership agreements make provisions for
these types of events.
A business that is charted by a state and
legally operates apart from the owner of
owners.
State governments requires that this type of
ownership be chartered.
 A charter is a legal document that grants certain
rights and privileges to the company by the state.
Stocks and Shareholders  Has the right to
issue stock. Corporations are traded on the
stock exchange and their ownership is divided
into shares of stock that can be owned by a
large number of stockholders.
Taxes  The profit is taxed to both the
corporation and to the shareholders when the
profit is distributed as dividends.
Risk  the possibility that a loss can occur as
the result of a business decision or activity.
There are no methods to completely
safeguard a business from risk.
Risk Management  a strategy to offset
business risks.
 Risk management is a systematic process of
managing an organization’s risk exposure to
achieve objectives in a manner consistent with
public interest, human safety, environmental
factors, and the law.
Economic
Human
Natural
Risks that occur from changes in overall
business conditions.
 When many people are without jobs, they spend
less money on fashion goods.
 The fashion industry has the risk of not selling
merchandise.
Risks caused by human mistakes as well as by
the unpredictability of customers,
employees, or the work environment.
5%
15%
Employee Theft
48%
Shoplifting
Adminstrative and paper
error
Vendor fraud
32%
Risks that occur due to natural disasters or
changes in the weather.
Pure Risks  risks when there is a possibility
of a loss, but no chance to gain from the
event.
Speculative risk  risks that occur when gains
or losses are possible.
Controllable risks  risks that can be
prevented or reduced in frequency.
Uncontrollable risks  events that a fashion
business from occurring such as the weather.
Insurable risks  pure risks that could exist
for a large number of businesses, includes
those for which the probability and amount of
loss is predictable.
Uninsurable risks  risks that occur when the
chances of risk cannot be predicted or when
the amount of loss cannot be estimated.
Businesses can handle risk by different
methods:
 Purchasing insurance
 Implement employee training
 Product warranties
Design a chart or graphic organizer describing
the four main types of fashion producers:
manufacturers, wholesalers, contractors, and
product development teams.