Buying the latest clothes and accessories is the best way to stay on-trend. However, it’s not the only way to immerse yourself in the fashion industry. Many of the leading brands are not only set up to sell products, they’re willing to sell pieces of their business. If you have the funds and you don’t mind taking a risk, it’s possible to buy shares in many of the top fashion companies. From specific brands like Nike to parent companies, such as Tapestry, which owns Coach and Kate Spade, you can buy shares in many of the industry’s biggest names.
Of course, like all financial investments, nothing is guaranteed. The value of your investment can decrease just as easily as it can increase. However, there’s no doubt that the fashion industry is thriving. Although figures vary depending on the criteria used to define the industry, the data shows that fashion is worth between $1.5 trillion and $3 trillion. That’s a lot of money. In fact, at the higher end of the calculations, the fashion industry is responsible for 2% of the world’s gross domestic product (GDP).
Smart Investments Can Pay Dividends
There’s certainly money in fashion, but how do you give yourself a chance to profit from it? Again, there are no guarantees you’ll make a profit. However, one way to access the market’s potential is through stocks and shares. There are various ways to buy stocks and shares. You can use an online brokerage and buy any amount you want. Another way to invest is via a stocks and shares ISA. You can still use an online brokerage. However, instead of just buying the shares out in the open, you’re buying them within a tax-efficient product. In other words, when you buy shares via a stocks and shares ISA account, you’re protecting them from certain tax liabilities if in the scenario you were to make a profit.
In this sense, they’re sheltered because they’re within a product. What this product does specifically is exempt your profits from capital gains tax. In the UK, profits from an investment are subject to capital gains charges of 18% or 28%, depending on your income tax rate. Everyone has an annual capital gains tax allowance. However, once you cross that threshold, your profits are subject to tax. That is, unless you bought shares via an ISA. These products allow you to invest up to £20,000 per year (2021/2022). Any profit you make from these investments, even if it’s above your annual capital gains allowance, won’t be subject to tax.
Investors in the United States are also subject to capital gains taxation. Any profit made from a capital asset is considered a capital gain, whereas if a loss is incurred then that would be a capital loss—both of which carry their own tax implications. The capital gains tax in the U.S. can be 0%, 15%, or 20% on assets held for more than one year. For short-term holdings (one year or less), the capital gains tax adheres to standard income tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, or 37%.
Fashion Companies You Can Invest In
Therefore, if you’re going to invest in fashion brands, stocks and shares ISAs are a great way to do it. The question then becomes, what brands should I invest in? That’s a matter of preference and research. No company can guarantee a positive return on your investment. However, some of the top performers over the last few years have been:
- Nike
- VF Corp (Vans, Timberland, The North Face, and Dickies)
- Burberry
- Next
- ASOS
- Inditex (Zara and other high street brands)
Naturally, past performance doesn’t mean these stocks are guaranteed to generate a profit, but they are still notable stocks, nonetheless. Buying shares in these companies, particularly if you do it via an ISA, could be profitable. We know that fashion is big business. So, if you want to have an even deeper connection to the fashion industry, you might want to consider investing.
