How Will 3-D Printing Affect the Apparel Industry?

Although we believe that many apparel companies have developed competitive advantages enabling them to earn outsize returns, for the most part we see these competitive advantages as shorter term in nature, thus falling more toward the narrow-moat end of the scale.

As fashion trends change to reflect the values and cultural identity of the times, we think different competitive advantages are demanded and rewarded. In the 1990s, for example, consumers were willing to pay a premium for brands and wanted logo merchandise. After 2008, consumer preference shifted to value offerings. We think these constantly evolving preferences leave the industry very exposed to the threat of new entrants.