The Economist recently reported on the vicissitudes of high-fashion companies in Italy (Tutto in famiglia, subscription required). In the article, The Economist points out that among haute coture brands, Armani stands out for remaining independent. Giorgio Armani argues that the markets overreact to seasonal results, but I see moral hazard as the bigger problem for fasion conglomerates. The Economist writes "When PPR bought (6 brands) in 2001, almost all of them were leaking cash. Six years on, Yves Saint Laurent is still losing millions." Knowing that many other brands remain to compensate for your failures inevitably reduces the pressure to succeed for any one brand.