Fashion Week goes mainstream—how it could spell trouble

Fashion Week is no longer only about the Chanels, Vuittons and Guccis of the world.

As the New York show calendar has grown to include mainstream brands (think J.Crew), and as affordable retailers such as H&M and Old Navy host events tied to the runway, the twice-a-year spectacle now incorporates both the high end and everyday.

This fusion between the high and low is even more relevant as a slew of brands expand their presence at outlet malls and within their own off-price footprints. But the blurred lines need to be approached by brands with caution—particularly by those aiming to reach both a high and low customer—to avoid diluting their brand.

Models walk the runway at the BCBG fashion show during MBFW Spring 2015 in New York.
Adam Jeffery | CNBC
Models walk the runway at the BCBG fashion show during MBFW Spring 2015 in New York.

"It's like protecting your brand [and] staying in your lane, but also making sure that you can cast a wide net," said Tom Julian, branding expert at The Doneger Group trend forecasting firm.

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For high-fashion firms, two popular ways to reach a more diverse customer base are doing a partnership with a mainstream retailer (think Joseph Altuzarra's recent tie-up with Target) or starting a separate, lower-price diffusion line. While partnerships are designed more to create buzz behind a label, the latter are more about building volume, said Vincent Quan, an associate professor at the Fashion Institute of Technology.

He pointed to MICHAEL Michael Kors, Nicole by Nicole Miller and Donna Karan's lower-priced DKNY as good examples of how designers can make lower-income consumers feel like they're part of a luxury brand, while keeping the elite feel of the label alive among true luxury shoppers—who can differentiate the premium products from the sub-brand.

"It does make a difference when you differentiate your namesake," Quan said.

For companies selling labels at multiple price points or who position themselves as an affordable luxury brand, one danger in appealing to a mass consumer base is overdistribution. Coach's U.S. sales have plummeted as a heavy presence at outlet malls has stripped the brand of its exclusive feel—a fate some analysts worry will be duplicated by hot Wall Street brand Michael Kors.

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"With the company growing inventory levels, expanding the store base globally, and investing in larger stores and headcount, we caution that KORS has left itself vulnerable should demand slow unexpectedly," BMO Capital Markets analyst John Morris wrote in a note to investors after the company's recent earnings report.

Despite the intricacies involved with building a multitiered brand, a group of designers at New York Fashion Week said it's important for them to serve both sets of customers.

Models pose at the Kate Spade presentation during MBFW Spring 2015 in New York.
Adam Jeffery | CNBC
Models pose at the Kate Spade presentation during MBFW Spring 2015 in New York.

Among affordable luxury labels, BCBG CEO Max Azria said his company, which toes the line between high fashion and mass interest, said he and his wife and creative director Lubov Azria, want to be able to share their brand with the "millions of girls" they come across while walking down the street or in the office.

Kate Spade's Chief Creative Officer Deborah Lloyd said designing luxury at a reasonable price is part of the quirky brand's DNA.

"It's not about a girl being a slave to fashion. She picks what she enjoys and she loves and we make it approachable because it's a very optimistic brand," Lloyd said. She also noted the debut of Kate Spade's lower-priced Saturday brand has helped the company capture a wider audience without taking anything away from the main label.

Models walk the runway at the Nicole Miller fashion show during MBFW Spring 2015 in New York.
Adam Jeffery | CNBC
Models walk the runway at the Nicole Miller fashion show during MBFW Spring 2015 in New York.

The headwinds are different for brands operating multiple labels. Menswear-maker Duckie Brown is launching Duckie Brown Gentleman at Nordstrom next month, which will sell Italian-made suits for $900 (a jacket from the brand's full-priced line can run for that much). One half of the label's design duo, Daniel Silver, said it's difficult for a company with such small production to lower its prices.

"We'd like Duckie Brown to be more for everybody and we're trying to do that," said the company's other designer, Steven Cox, ahead of its spring show.

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FIT's Quan said quality is always the sacrifice, as designers have to cut corners to lower production costs. For example, Nicole Miller's lower-cost J.C. Penney line—which at $60, sells dresses for a fraction of the price of her regular labelwill occasionally use polyester instead of silk to make lower prices feasible.

"Sometimes it can be a challenge finding the right fabrics," Miller said backstage at her show. "But I feel like I can put my taste level and my prints [into the line] ... I don't think it's taboo like it used to be."

Miller said some of her customers have told her they bought a $2,000 dress from her full-price line, and then stocked up on T-shirts from her diffusion line to wear over the weekend. But this, Quan said, is not typical.

"As you move up in terms of prestige, in terms of disposable income, it's natural for you to seek distinction and differentiation from others," he said.

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It's also natural, Quan said, for brands that seemingly have little to do with the highbrow nature of fashion week to be "latching on" to the event.

"The idea is to build buzz about your brand," he said. "This is the debutante ball."

—By CNBC's Krystina Gustafson