What do you think of today's retail prices?

[Faust]

Re: What do you think of today's retail prices?

Thanks, laika. You are opening up another interesting point, that of WORTH. One has to think about what one is paying for. Some designers spend many millions of dollars on advertising, and other extravagancies, which is all priced into the price of a garment. Others prefer to invest into good fabrics and good production.

[Faust]

Re: What do you think of today's retail prices?



[quote user="JBull"]I think that at least two mechanisms are at work. First, fashion is running through
the same product live cycle as – just as examples – wine or watches. On a cursory view, the similarities are striking. This of course is not an explanation, just an observation. And second, I do not think that increasing wealth fuels rising demand for expensive fashion, boosting prices. Quit the contrary. It has become extremely expensive to buy and sustain luxury items like significantly sized real estate, an airplane, or just spare time (not talking about financing offspring). So why not to spend "excess" money on relatively small budget luxury items? Actually, the relative price of fashion within the variety of luxury products has declined, hence we observe an increase in demand.[/quote]

I'm afraid I don't quite follow you. Wine ages, and Swiss watches are timeless - I'm not sure how they have the same product cycle (I can see wine depending on harvest and weather). Also not sure about the second mechanism. To most real estate is not a luxury. Are you talking about a real estate boom, rising cost of college education, and other important things? I'm not sure.

[onemancult]

Re: What do you think of today's retail prices?

[quote user="laika"]

It's not like designer prices have ever been reasonable or justified; and their profit margins have always been quite high. This recent jump in prices basically makes explicit what has always been there. [:(]

That said, I really try to put my money towards designers who have "reasonable" standards of pricing. A paper thin Marni t-shirt costs over $300, while a substantial one from Ann Dem or Dries costs about $160. I'll buy the Ann or Dries on sale, but never the Marni.

[/quote]

I think your comments illuminate another aspect of this issue that hasn't really been opened up, the fact that fashion is, at the end of the day,
beyond and above everything else, an industry like any other. That is, that the fashion industry is just as focused on turning a profit as any other
industry. We've seen time and time again a house being closed down for not being a 'worthwhile investment' to whatever conglomerated holdings company oversees it. And, the market is simply not forgiving towards independent designers that are focused on the artistry of their product rather than whether or not it will sell big, or even those that aim to produce things that more than just an elite few can obtain and appreciate.

I follow similar standards when it comes to purchases, and feel good about that on a personal scale. On a wider scale, however, I feel a bit defeated sometimes- someone's buying those overpriced thin Marni t-shirts at full price, otherwise, they wouldn't be making them. Demand is always going to
dictate, to a point, what companies can get away with. (I hesitate to say 'what designers can get away with, because often, they have very little say when it comes to pricing.)

[nairb49]

Re: What do you think of today's retail prices?



onemancult, you've raised an excellent point in terms of how the big house designers rarely have much say in pricing of their garments.

I'm a bit torn about what Faust brought up earlier in terms of dollars spent on advertising vs. material/design. Yes, its a given that cost of advertising will undoubtedly turn up in the ticket price, but in terms of production and raw material costs, between a well designed/fabricated piece from Ann D vs. a t-shirt from Marni, I doubt (but don't KNOW, please inform me if otherwise) that the net cost of the garment isn't all that different.

So, where does the price justification/inflation come from? If its not the cost of the actual garment, which for "lower" end designers is still a fraction of the retail price, then it has to come from factors such as advertising, etc, which in a way, justifies the cost of some of those garments.

[Servo2000]

Re: What do you think of today's retail prices?



Nairb, I do believe that you're very right about the advertising playing a role. The thing to remember is that advertising not only increases the value of a brand which increases it's cost exponentially, but it also costs the brands money, which means they have to make the money back by increasing the cost of the clothing once more.

I imagine you understood that, I'm just wording it more clearly.

[onemancult]

Re: What do you think of today's retail prices?



What, then, of the value of exclusivity? This isn't created by price alone.

For instance, a fashion house that is pouring tons of money into advertising, turning their brand into a household name- take any of the big boys in the industry with theprice tags to match.

Are they really justtrying to offset the cost of advertising, or are they also trying to offset the effectiveness of their advertising? If everyone knows about it, and everyone can afford it, where is that little nugget of selfishness that we all chew upon when we have something that few others have? I don't know of anyone that doesn't savor that particular feeling you get when you've picked something up that is rare, one-of-a-kind, or at least somewhat indicative of belonging toa select and aware few.

Are high retail pricesmerely an artificial standard for feeling priveliged?

[Servo2000]

Re: What do you think of today's retail prices?



You also have an excellent point there, onemancult. I think we can take a look at Thom Browne's pricing here, for instance: I've heard his scarves going for multiple-thousands-of-dollars. This, in my opinion, can only be rationaled as an 'exclusivity' price; you're buying a piece of the Thom Browne, club, as it were.

Another point to examine is that obviously, with all of the advertising, you are going to have people who are priced out, thusly: diffusion lines. So it is apparent that the main lines are priced to appear exclusive, which creates demand on all economic levels, and with diffusion lines, they can make money off of all of them.

So as near as I can tell, yes, high retail prices very often are also a means of representing a brands purported exclusivity and in other cases is an "artificial standard for feeling priviliged."

[casem]

Re: What do you think of today's retail prices?

What about the lesser known labels that are popular on this forum? I know the quality is much better than the more mass market luxury goods, but the prices seem to be even higher. They have low or no advertising costs, but they're smaller so I can see that driving up prices. Do you still feel you're being duped by these brands for being so expensive? Or is their quality and design SO much better that it is really worth it?

[sphoxx]

Re: What do you think of today's retail prices?





^^ I feel much more at ease paying high prices for smaller brands because
there's a much more intimate feel to them (plus the designers/owners are
usually accessible).

On the larger topic.. I'm not offended by the higher prices, but
rather saddened that the industry is (or seems to be) attempting to preserve
the distance between classes of consumers; alienation perpetuates recycling and
inhibits creativity. However, quality has its price. It's
more than possible to have style on a close to zero budget; true style
transcends currency (as does all art); but high quality
materials/construction/etc will always have to compete with cheap
manufacturing. There will always be a spectrum; but I think
mainstream spending habits ultimately determine how large of a gap there is
between the top and bottom.

Faust said it, "In America the perception that a
sloppy ape makes a true man is still prevalent." When these
perceptions change, and people (anywhere really) start to think about what
they're buying, we'll see a fairer (democratization of fashion?) price spread.

[Faust]

Re: What do you think of today's retail prices?

[quote user="nairb49"]

onemancult, you've raised an excellent point in terms of how the big house designers rarely have much say in pricing of their garments.

I'm a bit torn about what Faust brought up earlier in terms of dollars spent on advertising vs. material/design. Yes, its a given that cost of advertising will undoubtedly turn up in the ticket price, but in terms of production and raw material costs, between a well designed/fabricated piece from Ann D vs. a t-shirt from Marni, I doubt (but don't KNOW, please inform me if otherwise) that the net cost of the garment isn't all that different.

So, where does the price justification/inflation come from? If its not the cost of the actual garment, which for "lower" end designers is still a fraction of the retail price, then it has to come from factors such as advertising, etc, which in a way, justifies the cost of some of those garments.

[/quote]

To give some approximate idea - Dries van Noten, who tightly controls how his company is run, once said if he started to advertise he would have to raise his prices by 5-10% immediately. I would imagine for a conglomerate such as Prada, it's much higher.

Coincidentally, Marni does not adertise as far as I know (someone correct me if I'm wrong). A big part of it is definitely designer's popularity - it certainly sets the higher price that their vanity demands. Cloak is a prime example of that. The prices from FW04 to know have risen by about 50-100%, and I still find many of the same fabrics and details.

To be honest, I can't figure out Ann D.'s pricing. She moved some production to China for smaller things (manufacturing, but not assembly) and Eastern Europe (making shirts). Her prices are all over the place. She does try to keep them honest, many of shirts with interesting details made in Poland retail for around $230-250.

[Faust]

Re: What do you think of today's retail prices?

[quote user="onemancult"]

What, then, of the value of exclusivity? This isn't created by price alone.

For instance, a fashion house that is pouring tons of money into advertising, turning their brand into a household name- take any of the big boys in the industry with theprice tags to match.

Are they really justtrying to offset the cost of advertising, or are they also trying to offset the effectiveness of their advertising? If everyone knows about it, and everyone can afford it, where is that little nugget of selfishness that we all chew upon when we have something that few others have? I don't know of anyone that doesn't savor that particular feeling you get when you've picked something up that is rare, one-of-a-kind, or at least somewhat indicative of belonging toa select and aware few.

Are high retail pricesmerely an artificial standard for feeling priveliged?

[/quote]

Definitely. Unfortunately, today keeping up with the Joneses is a prerogative. Often it is just one item that even the lower middle class people must have. The celebrity culture has reversed the trend of exlcusivity - it is now massclusivity. Look at commercial rap for example - it's Gucci, LV in every fucking song, and the masses follow. I am sure a company like Louis Vuitton had to weight carefully the odds of losing the few rich buyers who will no longer buy their goods after they go to the middle class, against the masses they will bring in, who will buy less items but offset the amount they spend by their sheer numbers. Apparently the gamble has paid off. If you look at LVMH price chart it's been doing quite handsomely.

[Faust]

Re: What do you think of today's retail prices?



[quote user="casem83"]What about the lesser known labels that are popular on this forum? I know the quality is much better than the more mass market luxury goods, but the prices seem to be even higher. They have low or no advertising costs, but they're smaller so I can see that driving up prices. Do you still feel you're being duped by these brands for being so expensive? Or is their quality and design SO much better that it is really worth it?[/quote]

No doubt that there is an element of exclusivity there as well and the markups are huge. However, I am sure that their costs are MUCH higher. From the economies of scale that they do not enjoy to having a much larger number of house going into a production of a garment, it costs them plenty to make a garment. The quality is not that much better - it's the cost of labor. Think about the industrial sector - it costs them much less to ship the raw material made in developed countries to china, have it assembled there and shipped back. The costs of shipping +customs are pretty high, but it's obvious that the cost of labor is far higher. I mean a guy in Italy or France of the US, will want to earn about $20-30 an hour, and why shouldn't he? His cost of living is high, and just because he is a tailor, doesn't mean that he should be making less than a guy who sits in front of a computer in the office all day.

What we often pay for in these brands is the sense of artisanship. We pay the craftsman who put in his sould into the garment, who cared in creating and making it. At least that's what I would like to believe.

[Johnny]

Re: What do you think of today's retail prices?

"sould" Faust - is that a Freudian slip?!

[Faust]

Re: What do you think of today's retail prices?



[quote user="Johnny"]"sould" Faust - is that a Freudian slip?![/quote]

Hah!! I hope not.

[JBull]

Re: What do you think of today's retail prices?



[quote user="Faust"]

I'm afraid I don't quite follow you. Wine ages, and Swiss watches are timeless - I'm not sure how they have the same product cycle (I can see wine depending on harvest and weather). Also not sure about the second mechanism. To most real estate is not a luxury. Are you talking about a real estate boom, rising cost of college education, and other important things? I'm not sure.[/quote]

Sorry, I
was just sloppily writing down what came to my mind. It is the way the markets for these products have evolved,
and are still evolving. They are prime examples of monopolistic competition
with similar patterns of product differentiation. I am not sure about the
economic rationale behind the huge
mark-ups we have observed recently. It could simply reflect increasing
willingness to pay on consumers’ side in order not to keep up with the Jones - but to stay ahead of them. I have also heard
the argument, that these companies want to discourage status misrepresentation (I hate this expression)
because this crowds out the high-income target clientele.
Anyway, a good answer to this development is to buy shares of these companies
instead of their products.