by Eugene Rabkin
"Last week, two makeshift consortiums of designers and retailers signed open letters agitating for the realignment of the delivery and markdown calendar. These moves have their roots in longstanding issues with the broken fashion cycle, and change is overdue. While it’s clearly absurd for consumers to shop for cashmere turtlenecks in August or shorts in February, the early delivery schedule also puts unnecessary pressure on independent designers. By the time May and November come around, most of their clothes go on sale, eroding profitability and brand equity.
But there is an elephant in the room that nobody has yet addressed: one of the key reasons that markdowns happen so early in the season is pricing: in recent years, full-price designer fashion has become stratospherically expensive.
Take a look at any luxury e-commerce site and you will see it peppered with $1,500 boots, $900 sweatshirts and $500 t-shirts. A cursory browse of Ssense, for example, can lead you to $690 cut-off denim shorts from Saint Laurent, or a $1,350 "destroyed" cotton hoodie from Givenchy. Over at Net-a-Porter one can purchase a Bottega Veneta leather coat for $9,800 or an appliqué dress from The Row for $18,000.
In this way, luxury fashion has become the perfect reflection of the growing economic stratification that has gripped Western society. There is the 1 percent who can afford such prices, and the 99 percent who shop on sale. What we are witnessing, when it comes to discounts, is a cat and mouse game between the fashion industry and its consumers, one in which everyone, understandably, acts in their own self-interest.
What's more, fashion companies know this. After all, a lot of big brands also control their own retail networks where they set the prices. And the rest provide retailers with a suggested markup that they are expected to adhere to. These markups hover around a 3.0 multiplier, making a $1,000 coat cost $3,000 in a store, and that is before the costs of shipping, duty and taxes are included and passed on to the consumer."
Full article on BoF
"Last week, two makeshift consortiums of designers and retailers signed open letters agitating for the realignment of the delivery and markdown calendar. These moves have their roots in longstanding issues with the broken fashion cycle, and change is overdue. While it’s clearly absurd for consumers to shop for cashmere turtlenecks in August or shorts in February, the early delivery schedule also puts unnecessary pressure on independent designers. By the time May and November come around, most of their clothes go on sale, eroding profitability and brand equity.
But there is an elephant in the room that nobody has yet addressed: one of the key reasons that markdowns happen so early in the season is pricing: in recent years, full-price designer fashion has become stratospherically expensive.
Take a look at any luxury e-commerce site and you will see it peppered with $1,500 boots, $900 sweatshirts and $500 t-shirts. A cursory browse of Ssense, for example, can lead you to $690 cut-off denim shorts from Saint Laurent, or a $1,350 "destroyed" cotton hoodie from Givenchy. Over at Net-a-Porter one can purchase a Bottega Veneta leather coat for $9,800 or an appliqué dress from The Row for $18,000.
In this way, luxury fashion has become the perfect reflection of the growing economic stratification that has gripped Western society. There is the 1 percent who can afford such prices, and the 99 percent who shop on sale. What we are witnessing, when it comes to discounts, is a cat and mouse game between the fashion industry and its consumers, one in which everyone, understandably, acts in their own self-interest.
What's more, fashion companies know this. After all, a lot of big brands also control their own retail networks where they set the prices. And the rest provide retailers with a suggested markup that they are expected to adhere to. These markups hover around a 3.0 multiplier, making a $1,000 coat cost $3,000 in a store, and that is before the costs of shipping, duty and taxes are included and passed on to the consumer."
Full article on BoF
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