Oxford MBA’s Fashion Startup Aims to Disrupt Luxury Goods Market

“If you're buying from luxury brands at expensive prices, you automatically assume that it’s of high quality. It's usually not.” After witnessing low-cost production processes first hand during a visit to a factory in Asia during business school, Oxford MBA alumnus Scott Gabrielson connected the dots. “[W]e saw cramped workers, earning US$6/day, gluing and sewing luxury duffle bags and backpacks. One of the bags, which the brand claimed to produce in Italy, cost under US$100 to make. This bag sold for over US$1,200 just down the road.”

High mark-ups aren’t an anomaly in the luxury fashion industry, where more than three quarters of purchases come from a handful companies, according to Gabrielson. He believes this encourages luxury fashion brands to monopolize the market and inflate prices. In addition, those who desire to cut costs at the production level to make room for larger marketing budgets often succeed only in bringing lower quality and less affordable goods to market. “When you buy fashion goods you often buy a brand. The problem is that these luxury fashion brands keep the brand but change the way they make things, and it has never been in the interests of consumers,” Gabrielson explains. Yet, in a competitive industry, forecasted to be worth over 2 trillion dollars by 2025, finding and driving customer loyalty is key to success.

The 2013 Rana Plaza building collapse in Bangladesh, the deadliest garment-factory accident in history which killed 1,130, inspired Gabrielson to focus on disrupting the fashion industry, and led him to pursue an MBA at Oxford’s Saïd Business School the following year. His MBA studies culminated in his founding of online fashion startup, Oliver Cabell, earlier this year, which aims to shake things up in a subtle, but significant, way.

Fashion startup’s new take on price tags: All about transparency

Dubbed by its founder as an “honest alternative to high-end fashion,” this Oxford MBA fashion startup seeks to tap into the mindset of young consumers - its primary market - who are increasingly rejecting consumerism and megabrands in preference for authenticity and deeper engagement with companies. As noted by several experts in the fashion industry, a name is no longer enough. “Oliver Cabell relates to people differently than traditional fashion brands,” Gabrielson explains. “We believe that telling the story behind our products and providing value will do more for us marketing-wise than any big advertising initiative.”

Transparency regarding the startup’s suppliers, factories, manufacturing processes and costs to the public is central to this thinking - all information that luxury fashion brands tend not to be so forthcoming about and, indeed, what is often actively obscured by celebrity endorsements and glossy ads. Company transparency resonates with millennials, who care about quality and design but are more ethically conscious, says Gabrielson. Customers may be willing to pay a higher price for a product, but they expect the price to be justified and the quality to be beyond reproach, adds the founder.   

Ticket to a successful fashion startup launch: Entrepreneurship and the MBA

Oliver Cabell’s founder attests to the influence of the Oxford MBA in turning a simple idea - “that fashion goods are too expensive” - into a viable business. Having originally studied art and finance at undergraduate level at the University of Minnesota's Carlson School of Management, Gabrielson joined an investment bank and later worked in business development for a nonprofit before deciding that an MBA would help him develop his entrepreneurial skills.

The fashion startup founder credits, in particular, MBA electives in supply chain management and reputation leadership as helping pave the way and teaching him how to “do it cheaper, do it better, and do it with purpose.” The Oxford MBA’s alumni network also proved to be fertile ground for Gabrielson, who pulled advice and guidance about navigating the fashion industry from the likes of fashion designer, Patrick Grant, and the cofounders of luxury clothes firm, Ledbury. Gabrielson also points to the role of Oxford Saïd’s entrepreneurship project, which helped him develop his brand idea and through which he received the support of Stephan Chambers, the former director of the MBA program, and a well-rounded team with backgrounds in consulting, fashion marketing, accounting and private equity.

Aspiring entrepreneurs can follow in the footsteps of this Oxford MBA by choosing electives that are designed to build and develop the requisite skillset for a successful business launch. This could mean taking on an entrepreneurial project as part of the program, or pursuing an MBA specialization or concentration in entrepreneurship. Those specifically interested in luxury goods or the fashion industry could also consider an MBA or EMBA in fashion management from schools such as NYU Stern, SDA Boconni and ESSEC, each of which are based in one of the world's fashion capitals.