Are luxury goods getting more expensive, or am I just getting older?

[Paullw]

I was in Belgrade 3 weeks ago, I've returned to London and everything seems even more expensive that it was before. Belgrade is generally fairly cheap.

 

[emma peel]

And london is crazy expensive!! at least for an american... luxury goods there are outta control.

 

[Grill]

And london is crazy expensive!! at least for an american... luxury goods there are outta control.

London is expensive for Londoners/residents! It's become a major financial capital - if not at the moment THE financial capital of the west. In the past couple of years, the super rich have flocked to London choosing it over New York and Paris as THE place to live hence prices in the higher end housing market have sky rocketed along with a demand for super-luxury goods!

My husband and I choose to move to Paris as not only is the pace of life more pleasant and it is a beauteous city, but we can get so much more for our dosh!

 

[emma peel]

well folks, just got my credit card statements for the august binge of fall shopping, and it's really the big ticket designer items that kill ya! but then again, all the little h&m/old navy trinkets can add up too. but the big items doubling price in the last few years is murder!

 

[salomelovesjohn]

Definitely prices have gone up, I remember getting a Gucci purse in the 90s for something like $200-300. A large one too! I'm getting a little tired of it myself. Recently I bought a bunch of vintage and independent designer things while traveling. It felt good to have something special for a reasonable price.

Yeah Lanvin's costume jewelry is insane. I was thinking recently while looking at my Cavalli snake bracelet clutch that I bought my mother a real gold 14k snake bracelet with ruby eyes for less $$ a couple of years ago. Hmmm....

 

[emma peel]

i think i'm going to step back for a while, the dollar is just so weak now... the sticker shock of a $1400 marni bag, for example, is just too crazy.

 

[softgrey]

i read in the ny times that luxury handbags and accessories are marked up 10 times...

so if it cost $140 to make...they sell it at $1400......

not acceptable......

i think one would be a fool to pay retail for one at this point...

 

[seanutbutter]

That's outrageous! I always knew handbags were priced much too high for what they were.

 

[emma peel]

plus handbags don't have to be sized like clothes or shoes do, so they are the true cash cow of fashion houses.

 

[xPedro]

And Brazil, where a Vogue Paris costs 40 dollars

 

[adorefaith]

i read in the ny times that luxury handbags and accessories are marked up 10 times...

so if it cost $140 to make...they sell it at $1400......

not acceptable......

i think one would be a fool to pay retail for one at this point...

wow...ridiculous...
it's actually insulting..

i often wonder what would happen if we could get the word out about something like this...enough so that people would stop paying the prices being asked...
then designers would be forced to re-assess and price their items more reasonably, no?..

i suppose the problem is that someone will always pay a ridiculous amount for something..
so the price will stay where it is...
which is just SILLY imo..
marking something up 10 times is just crazy..

 

[just_me]

well, clothing is also very marked up so for those that pay for designer clothing but refuse for bags... there is something wrong there just saying.

 

[SomethingElse]

Dressing through the dollar collapse

Euro's ascent doubles the price of continental couture for Americans

Bad news for fashion divas. Those filmy $1,500 dresses from Prada they may have admired a few years ago will now set them back closer to $3,000.

How prices are set at the very high end of the fashion business has always been somewhat of a mystery. But design houses now have something concrete to explain why a diaphanous dress costs as much as a used car: the collapse of the U.S. dollar and the rise of the Euro.

The Euro hit a record $1.42 in September and is still hovering around $1.41, which means the dollar has lost almost half its value since the European currency debuted in 1999. In the past two years, the Euro has soared more than 21 percent relative to the dollar. It's a far cry from when the Euro traded below the dollar in late 2000.

The falling dollar helps domestic exporters because it makes U.S. goods a bargain overseas. Conversely, it's bad news for fans of high fashion and European travelers because it makes everything from Parisian hotel rooms to high tea in London more expensive. The same applies for European-made goods.

Unless their clothing budgets have doubled, designer aficionados are having to cut back on purchases or trade down to less expensive brands. The same currency effect is trickling down to Japanese and some U.S. designers, who use fabrics made in Italy.

"There are winners and losers," says Carl Tannenbaum, chief economist at Chicago's LaSalle Bank. "The losers are U.S. purchasers of foreign products and tourists."

The Euro's seemingly relentless rise has sent well-dressed women like Jessica Lagrange scrambling for solutions.

"Prices have gotten outrageously expensive. I bought a simple jersey dress and paid $1,500. It doesn't look like anything special. A suit is now $4,000 by the time you do the jacket and pants. It's not right," says the 48-year-old Chicago interior designer. "To combat that, I buy classic things. I stay away from trendy designers. You wear the leopard print dress once and that's it."

Like many others, she isn't above mixing high with low.

"I have no problem going into H&M to find things," she said. "The big Gap on Michigan Avenue is right next to my office. The good things there go really fast."

No tag days

No one is holding any tag days for affluent consumers. A Chanel tweed jacket that retailed for $2,900 in 2002 now sells for more like $4,000 and can cost as much as $10,000 to $11,000 depending on fabric and embellishments. A Dolce & Gabbana cocktail dress can set you back about $3,000 to $5,000, compared with less than $2,000 two years ago. Prices for a Burberry woman's trench coat range from $1,000 at the low end to $2,100 at the high end, quite an investment even if you wear it for years.

Who can afford such prices? Not many, says Pam Danziger, president of Unity Marketing and author of "Why People Buy Things They Don't Need." Danziger studies households in which the average annual income is $150,000. Only the top 7.5 percent of U.S. households earn that much or more.

"A $1,000 dress is a very different animal than a $4,000 dress. There are not many $4,000 dresses being sold," she said. "At $150,000 in income, I'd be hard pressed to find someone who will spend $16,000 on a Hermes handbag."

She notes that catalogs often feature the most expensive items that brands offer to reinforce their luxury image, but retailers may actually sell precious few of those items. Barneys, for example, has created its own less expensive chain—the Co-op—and gives those lines space in its flagship stores as well. The people who can afford to shop the most expensive brands Barneys offers likely comprise the top 1 percent to 2 percent of U.S. households by income, Danziger estimates.

Eva Quateman, another Chicago fashion plate, has her formula for coping with high prices.

"You have to have the accessories. You have to buy nice shoes and bags, and they last. People know. It's good to buy a good coat and you have to have a real watch."

After the foundation is in place, she searches for bargains at Zara in New York, the low-price, fast-fashion retailer from Spain. If the 53-year-old interior designer finds an item in good quality fabric, she might pay $150 for it and spend another $100 having it altered at the Dress Doctor in Water Tower Place. Many of Quateman's friends are sure she is wearing some expensive designer piece that somehow escaped their notice.

"You have to be willing to change buttons and alter things. I've spent 20 years perfecting this art," she says.

As for paying $5,000 for a dress, "I'd feel like an idiot if I paid those prices. I have three kids and a daughter at NYU."

Broader base

As sky-high prices for designer rags have shrunk the pool of potential shoppers, almost every designer has responded with less expensive lines intended to attract a broader shopper base. American designer Michael Kors has his Kors line. Italian design house Missoni has M Missoni. Roberto Cavalli has Just Cavalli.

With the euro's escalation, though, those cut-rate collections may cost as much as the signature lines did a few years ago.

Meanwhile, other retailers are picking up disgruntled fashionistas with low-price collections from well-known designers.

It's the cheap chic model Target pioneered in the 1990s, and it has now been adopted by retailers ranging from Kohl's to Payless ShoeSource.

Instead of paying $1,000 for patent leather boots from Ferragamo shoppers can drop $48 for a pair from Payless by Abaete's Laura Poretzky. The low-priced model sports a trendy Lucite heel.

Vera Wang, best known for her $10,000 wedding gowns, rolled out a bargain-priced Simply Vera line for Kohl's that sold out in days.

Pieces included a black satin car coat for $128 and swingy tops for about $50.

It's the same kind of starved-for-affordable-fashion reaction Swedish retailer H&M has gotten from its collections from Chanel's Karl Lagerfeld, Stella McCartney and Madonna. Roberto Cavalli, the Italian designer, has a 45-piece line that will debut at H&M in November that features sex-kitten tuxedo pants for $50 and beaded gowns for $250 to $350.

Even Old Navy is in the game. The discount version of Gap announced recently that it hired designer Todd Oldham as its creative director to develop merchandise for the struggling chain. Oldham also designs a line of trendy furniture for La-Z-Boy.

Meanwhile, Target is expanding its own portfolio of designer collections. It now is serving up Libertine, a British mix of preppy and Victorian style, and has introduced Alice Temperley, a British line known for feminine flair. Other designer collections featured for limited periods in the past year include hot American designers Proenza Schouler and Behnaz Sarafpour.

So just as the divide between the rich and poor in the U.S. has been widening, prices for designer fashions have never been more expensive and cheaper at the same time. That means shoppers have never had more opportunities to mix high with low, and they have gotten extremely comfortable doing it, says Carol Davies, a retail and brand consultant with Fletcher Knight.

"I think there's almost something aspirational about being able to mix and match. It demonstrates a level of style and confidence that is very appealing. There are some bragging rights to saying, 'I got this great piece, but I didn't spend a lot for it.'"

chicagotribune.com . by Susan Chandler, published 7 October 2007

 

[emma peel]

^great article!

so we can blame our stupid president here in the US for an expensive war that has us in debt to the world with a weak dollar.

 

[seanutbutter]

so we can blame our stupid president here in the US for an expensive war that has us in debt to the world with a weak dollar.

You can, but that's not entirely it.

 

[emma peel]

here's an interesting video from the NYT on luxury handbag inflation:

http://video.on.nytimes.com/index.jsp?fr_story=85f858c2dd87936eb03acefa0fde003096dc63c1

 

[joiedemode]

You can, but that's not entirely it.

It's a LOT of the problem though. This idiot spends 2 BILLION dollars a week for what? And now we are in major debt and all of the other countries are taking advantage of it.

 

[just_me]

You are in debt because people continued to take up mortgages on housing which they could never afford to pay back.. it was not regulated before it was too late.

 

[fashionista-ta]

^ Individual foreclosures are not what's causing the dollar to tank; the national debt is. And there is quite a strong connection between the war (which was entirely optional to an unprecedented degree) and our national debt. November 2008 cannot get here fast enough ...

PS If you care about fashion, now you know what to do

 

[mark_jakobs]

louis hyped up 13 times production cost