Cities like New York, Paris, London, and Milan have long established themselves as fashion capitals of the world. These cities have become cluster economies with numerous connections, resources, and buyers close at hand. For this reason, firms often establish themselves in these same cities in order to take advantage of cluster economies and to increase their chances of survival. Thus, arguably, the fashion industry can be characterized as being path dependent and subject to external economies. However, with the increase of globalization and outsourcing of production, there seems to be less of a need to depend on these few “fashion capitals” to build a new fashion empire. Hence, an important question arises: can an "infant" fashion industry overcome the established advantages in current fashion capitals and become a major player in the global industry? By doing a comparative analysis of the growth and profitability of companies based in one of the current major fashion cities, and companies based in emerging fashion industries, it can be discovered if a new company needs the perceived benefits of cluster economies to become a leading firm in the global fashion industry. This conclusion gives further insight into whether any new cities or countries have a chance at becoming another major global fashion hub.
What defines New York, Paris, London, and Milan as fashion hubs is the large number of leading firms in the fashion industry that reside in these cities. The finances and international market presence of these fashion companies can be used as benchmark values for what it means for another company to be “successful” at becoming a major player in the industry. This thesis will use a quantitative analysis to determine whether companies in the emerging fashion industries of Sweden, Canada, Japan, Germany, and other U.S. based cities, have become or have the potential to become world-renowned fashion brands. These results will then be explained by various contributing factors, such as economic conditions and managerial tactics. Since this thesis will be the first to include a discussion of the global fashion industry, rather than focusing on one sector of it, the conclusions of the empirical analysis will provide suggestions for success strategies for designers in any other emerging fashion locations.