How to Invest in Fashion Brands - MOXI is like a best friend, who works in finance

Twitter

Facebook

The Story

Love Gucci? You can own the brand as well as wear it (we'll take the signature GG belt, thanks).

How can I own a brand?

Well, to start, you can only part own it (we may have got overexcited above). Well-known brands are usually ‘public’ which means you can own a piece of them through buying their shares.

What’s the benefit?

There are two ways you may benefit from owning shares…

1. Each year, you receive a portion of the company’s profit – aka you're paid dividends.
2. If the company does well and is expected to continue to do well, the share price is likely to go up (that's good news for you!).

Gimme an example

Over the last five years Burberry’s share price has gone up from £12 to £18 and they paid out 2.3% dividends each year, on average.

So I'd make money too?

Exactly. Buying 100 shares would have cost you £1,200 (100 times £12) but today it would be worth £1,800 (100 times £18). That's a £600 gain. Plus, you would have received around £30 to £40 in dividends each year. All in, it’s more than a 60% return on your initial investment.

Sign me up!

First you’ll need an investment account. Here are MOXI’s top picks. You most likely want to start with an Investment ISA (aka Stocks & Shares ISA) to avoid paying tax on any gains you make. Once you have an online account you can search for the brand you want to invest in. If the search returns a blank, it’s because the brand is not public (more on that here) or the brand is part of a group.

Hold-up. What's a group?

One group can own many different brands. For example, H&M (stock symbol HM-B) also owns the brands & Other Stories, Cheap Monday, COS, and more. Yep, a group can rule the high street! So when you invest in a group you need to consider all their brands. And while diversity is a good thing, one ‘bad brand’ could affect the group’s share price.

Anything I should do before buying shares?

Yes. Always research a brand’s (or group’s) performance before investing. We have a guide for this.

MOXI Roundup

When buying shares, you may benefit from a rise in share price or yearly dividend pay-outs (or both). The share price may be volatile which means the price could fall or rise. It’s good practice to be prepared to invest for at least five years so that you can ride out the volatility if needed. Of course if the price rises before then you can sell to secure your gain or if the price falls and your view on the brand is no longer optimistic you can sell making a loss.