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24-03-2004
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Oh Love That! You Paid What? - NY-Times Article
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March 23, 2004
Oh, Love That! You Paid What?
By RUTH LA FERLA


Liz Toney, a fashion stylist in New York, had hoped to buy a white lace Peter Som dress for herself this spring, but was stopped in her tracks by its price tag: $1,300. She was also scared off by the $400 price of another most-wanted item on her list, a hot-pink dress from Catherine Malandrino.

"Prices are definitely higher than they were a year ago," said Ms. Toney, who is in her 20's. "Even with our economy getting a little better, these are not prices that I can afford. So I'm shopping less in the bigger stores and going instead to sample sales and places where I can get better deals."

Ms. Toney is typical of a breed of shopper who continues to shop but is troubled by a perceptible jump in the prices of designer goods, which are up as much as 10 percent over last spring, merchants say. Her dawning sense that something is amiss is being reinforced at cash registers across the country, where prices have been forced up by the dollar's shrinking value against the euro and by a general disconnect between the makers of high fashion and the economic constraints facing average consumers.

At stores like Bergdorf Goodman in New York, which specializes in European and American designer clothing, customers are experiencing price jumps of 6 to 7 percent, said Robert Burke, the store's fashion director. Other merchants reported increases of 10 percent or more since spring 2003, not enough to rock fashion zealots but enough to register. The "moderate apparel" category, encompassing the secondary lines of many designers, remains unaffected, for the moment at least.

The 10 percent bump for designer goods more than five times the increase in the consumer price index for the 12 months ended in February is largely a result of the dollar's sharp fall against the euro. In mid-February, the euro reached $1.28, up from $1.05 in April 2003. Most high-end designer clothing comes from European factories or is made with fabrics from European mills.

"The bad value of the dollar to the euro is affecting everyone," said Kal Ruttenstein, fashion director of Bloomingdale's. "Designers are very aware of the issue. They want their clothes to sell. They don't want to take markdowns. But neither do they want their customers to get sticker shock."

Retailers say that people are still shopping. High-fashion customers, affluent to begin with, seldom stop cold turkey when prices rise. They cope by buying fewer pieces, but more distinctive ones.

Indeed, some stores, like Saks Fifth Avenue and Neiman Marcus, are citing preliminary increases of more than 10 percent in spring sales of designer clothes and accessories, compared with this time last year, according to Women's Wear Daily. To explain the demand even in the face of rising prices, retail experts cite the success of designers in creating covetable spring clothes in bold patterns and colors like pink and orange, as well as a confidence among customers who are more optimistic than the economy might warrant.

Come fall, however, those blithe shoppers may be stopped dead in their tracks. Fall designer clothing is expected to jump by 20 percent or more.

Rose Clark, the vice president for merchandising at Stanley Korshak in Dallas, which caters to an affluent crowd, cited increases of 25 percent for European designer goods that will begin arriving in stores in late summer. Mr. Ruttenstein, who like Ms. Clark recently returned from a European buying trip, likewise noticed price jumps of 20 to 25 percent. Shoppers accustomed to paying $4,000 for a Chanel jacket at Bloomingdale's will find themselves spending closer to $5,000.

Portents are already in the air. A stroll through Manhattan department stores last week turned up price tags that might cause even devout fashion followers to hesitate. At Bloomingdale's, a Celine cotton twill miniskirt bordered with brass grommets was priced at $1,050; Blumarine jeans in a white canvas much like the fabric used in jeans at the Gap were $630; and a Marc Jacobs cropped cotton seersucker jacket was $1,100.

At Saks Fifth Avenue, a Michael Kors poncho little more than a square of patterned silk with a slot at the center to poke one's head through was marked at $890. And at Barneys, a plain sleeveless silk gingham camp shirt by Behnaz Sarafpour, an American designer little known outside fashion's inside circles, was marked at $690. A minuscule pair of oatmeal-color cotton shorts from Proenza Schouler, also far from a household name, was expected to fetch a staggering $720.

"We notice that our clients are purchasing less units about 10 percent less in designer clothes, but purchasing more expensive pieces," said Judy Collinson, the general merchandising manager of Barneys.

Michael Silverstein, a fashion consultant and an author of "Trading Up: The New American Luxury" (Portfolio, 2003), said: "Women in particular are still buying fashion, especially items that confer prestige. They're willing to put their money on certain pieces that telegraph luxury at 100 feet away."

Other experts cautioned that such assessments tend to be shortsighted. "Perhaps designers are believing the press about the recovered economy and adjusting prices upward accordingly," said Candace Corlett, a principal at WSL Strategic Retail, a consulting firm in New York. "They are pushing up prices in a way that is out of line with the economic reality that people's investments and savings have not grown, and are not going to grow dramatically."

Ms. Corlett added that consumers are aware that "nobody has an inside track anymore on how to grow money fast."

"Consequently," she said, "many of them are pulling back on their purchasing."

To retain customers as clothing prices rise faster than inflation, stores find themselves forced to make concessions. "We don't take as high a margin in some cases," Ms. Clark of Stanley Korshak said. In transactions with designers, major stores have the upper hand. "Some companies we work with will take a lower markup," Ms. Clark said. "It all depends. The question is, How badly does the company want to be represented?"

American designers who manufacture domestically but buy their fabrics in Europe suffer because the cost of raw materials is up. Like stores, they are faced with the unpleasant choice of absorbing the increases or passing them on and running the risk of turning off consumers. Jamie Davidson, a partner in Normandy & Monroe, which sells cashmere jackets retailing for $1,200 at stores like Barneys and Neiman Marcus, said that European cashmere is up about 30 percent. "But we have not raised our prices at all," he said.

"It's scary, to be honest," he added. "Kind of like when there is a gas shortage and prices go up when world companies realize they can get a higher amount for gas, they're reluctant to bring it back down again. I hope that will not be the the case with the fabric mills."

Last week, Natalie Leeds breezed across the sixth floor of Saks in Manhattan, toting her handbag on one arm and a cream and yellow houndstooth linen jacket by Dolce & Gabbana on the other. An intrepid shopper long inured to the cost of high fashion, Ms. Leeds did not balk at the jacket's $3,000 price tag, murmuring resignedly, "It is what it is." All the same, she confided that the price of spring fashions sometimes strains the limits of credulity.

"I saw a white cotton T-shirt with a sequined neckline that cost $1,800," she said. "Now I think's that's off."


Copyright 2004 The New York Times Company

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24-03-2004
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Thank god there's consignment stores and eBay, there's no way in hell I could afford (or would be willing to pay) those kinds of prices.

And unlike the consumers described in the article, I certainly don't aim to "telegraph" luxury with what I wear. I'm more concerned about how the clothes fit my body, than what they project to others. Conspicuous consumption is so garish, and so passe.

I'm glad these flashy consumers exist though - they're the ones providing the consignment market with items worth, oh, 1/5 of what they paid for them in retail.

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24-03-2004
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Quote:
Originally posted by Orochian@Mar 24th, 2004 - 6:28 pm
Thank god there's consignment stores and eBay, there's no way in hell I could afford (or would be willing to pay) those kinds of prices.

And unlike the consumers described in the article, I certainly don't aim to "telegraph" luxury with what I wear. I'm more concerned about how the clothes fit my body, than what they project to others. Conspicuous consumption is so garish, and so passe.

I'm glad these flashy consumers exist though - they're the ones providing the consignment market with items worth, oh, 1/5 of what they paid for them in retail.
I couldn't agree more!

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24-03-2004
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I can understand someone justifying $3000 for the Dolce & Gabbana jacket. But over $700 for a pair of Proenza shorts? or the $1800 sequined t-shirt? That's just maddening!

I understand the problem of the Euro vs. Dollar. But why are prices being raised around the world then? And also, you'd think that designer houses who have such a HUUUGE market in America would be willing to swallow the losses for a couple seasons until the Dollar regains some of its strength rather than hiking prices up on the consumers that have for so long supported them. Maybe that's unrealistic but it would be nice to see.

I've been to Seven. I've been to Jeffrey and Barneys. I've been to IF and Balenciaga and to be honest, NOTHING is tempting me this season. My 'must-have' list of the season is EXTREMELY short and that, coupled with the rising prices has kept me lounging around in my same old clothes for the past few months.

Vuittons bags at $22,000? cotton shorts at $800? Prada shoes reaching way past the $700 mark? All this just proves how sublimely out of touch the fashion world is with its consumer. The average young 'hip' NYC man or woman is certainly in the market for luxury, but at what price?

I'm quite frankly shocked at the price tags on the salesfloor right now. But with a 20% increase for fall? My god I don't think I'll be buying anything!

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24-03-2004
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I think the fall of the US dollar might have some influence on the rise of clothing prices but I doubt it's what causes it directly. A lot of the time corporations will take advantage of these situations as a way of raising prices. Similar to rise in gas prices during the war, it is understandable that prices will rise a bit but not as high as they were a few months ago. I'm not even going to try and wrap my head around this stuff.

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24-03-2004
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Quote:
Originally posted by chickonspeed@Mar 25th, 2004 - 12:05 am
I can understand someone justifying $3000 for the Dolce & Gabbana jacket. But over $700 for a pair of Proenza shorts? or the $1800 sequined t-shirt? That's just maddening!

I understand the problem of the Euro vs. Dollar. But why are prices being raised around the world then? And also, you'd think that designer houses who have such a HUUUGE market in America would be willing to swallow the losses for a couple seasons until the Dollar regains some of its strength rather than hiking prices up on the consumers that have for so long supported them. Maybe that's unrealistic but it would be nice to see.

I've been to Seven. I've been to Jeffrey and Barneys. I've been to IF and Balenciaga and to be honest, NOTHING is tempting me this season. My 'must-have' list of the season is EXTREMELY short and that, coupled with the rising prices has kept me lounging around in my same old clothes for the past few months.

Vuittons bags at $22,000? cotton shorts at $800? Prada shoes reaching way past the $700 mark? All this just proves how sublimely out of touch the fashion world is with its consumer. The average young 'hip' NYC man or woman is certainly in the market for luxury, but at what price?

I'm quite frankly shocked at the price tags on the salesfloor right now. But with a 20% increase for fall? My god I don't think I'll be buying anything!
I couldn't agree more CoS. This is simply getting ridiculous. I've really noticed a price increase in the main Marc Jacob's line and quite frankly, a lot of these items are worth the price increase. Some most definately are, but to increase one's prices by 25%? When garments are already expensive to put such a hike in is amazing. I agree that fashion houses and designers are becoming more and more out of touch with their consumers.

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24-03-2004
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I am poor and yadda yadda yadda. I can't even think about buying designer clothes because I simply don't have the money for it. But it is a different sitiuation when even if I did have the money I still wouldn't pay for it. Dior Homme has jeans for around $600, IT'S DENIM! Denim is so cheap to make. It's insane. The prices listed in the article are crazy!

It's so weird when I look through magazines and see fashion ads and then look at the prices and realize I can't afford any of it. Oh well, knock offs look just as nice.

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24-03-2004
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That's why Im falling more into the thrift store-vintage chic mixed with some designer vintage

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24-03-2004
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It's all about whom they perceive as their clientele - and it's getting pretty clear that the industry as a whole is getting too snotty to include the "average consumer", i.e. you and me, with real jobs and real burdens and real financial concerns, in their lists. They'd rather keep cashing in on the ultra-rich for whom price tags are negligible, than to make any slight effort to democratize their goods.

I'm all for luxury for the masses, or may be that's just another way to say that my blood isn't blue enough (or my bank account isn't big enough), but I don't believe that's the right way to do business. If you're Chanel and Hermes, then of course, this doesn't apply. But then again exactly how many brands out there are on that level? Many certainly fancy themselves to be so, and that's quite clear in their pricing, but are they in reality?

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24-03-2004
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chickonspeed-you took the words right out of my mouth...i'm not even tempted right now...the good news is that when none of this stuff sells at the ridiculously inflated prices...we can all benefit from the ridiculous low markdowns...haha

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24-03-2004
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Quote:
Originally posted by Orochian@Mar 24th, 2004 - 8:51 pm
It's all about whom they perceive as their clientele - and it's getting pretty clear that the industry as a whole is getting too snotty to include the "average consumer", i.e. you and me, with real jobs and real burdens and real financial concerns, in their lists.
See, I don't even have those kinds of hopes and dreams. I don't expect Dior Homme and Prada to be priced according to the average Midwestern accountant's salary. But these prices are getting so high that young New Yorkers in well-paying, respectable positions cannot afford them.

I hope that doesn't sound hopelessly elitist but these are the people that luxury brands are targeted at. There are only so many Muffie Potter Astons and Deeda Blairs around. These brands need the young art directors, curators, agents, and editors that trawl through Barneys on a regular basis. Can they afford $800 shorts? I'm not so sure. Will they be able to afford them come fall with an 20% increase in price? I'm almost certain they won't.

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Quote:
Originally posted by softgrey@Mar 24th, 2004 - 8:07 pm
we can all benefit from the ridiculous low markdowns...haha


See me in line

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24-03-2004
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Quote:
Originally posted by softgrey@Mar 24th, 2004 - 9:07 pm
the good news is that when none of this stuff sells at the ridiculously inflated prices...we can all benefit from the ridiculous low markdowns...haha
Very true. So maybe we'll be able to snap up those Proenza Schouler shorts at 70% off! Making them. . . about $250? Haha I think I'll still pass them up!

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24-03-2004
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Quote:
Originally posted by chickonspeed+Mar 24th, 2004 - 8:27 pm--><div class='quotetop'>QUOTE(chickonspeed @ Mar 24th, 2004 - 8:27 pm)</div><div class='quotemain'> <!--QuoteBegin-softgrey@Mar 24th, 2004 - 9:07 pm
the good news is that when none of this stuff sells at the ridiculously inflated prices...we can all benefit from the ridiculous low markdowns...haha
Very true. So maybe we'll be able to snap up those Proenza Schouler shorts at 70% off! Making them. . . about $250? Haha I think I'll still pass them up! [/b][/quote]
haha none for me thanks...the jil sander is out of control too...it's all out of control...it's killing me...

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24-03-2004
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to be quite honest, i think that some of these houses are raising their prices because they realize they will be marked down so much. there's a definite rush to finding a deal and i think their banking on that impulse to take you to the register long before any real desire for the product normally would...

there are a few things i run up my credit card for during the pre-season, but besides that, i wait until the sales anyway...i mean it's sometimes still cold by the time spring clothes go on sale.

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