Paper Denim & Cloth: stepping away from premium

[kimair]

they are one of my favorite jeans, and now they are lowering prices...from wwd:

Paper Denim & Cloth is going where no premium denim brand has gone before.

The New York-based brand is strategically changing its position in the denim market and, beginning with its fall collection, will lower its price points in an effort to increase distribution and sales. The women's and men's collection of denim and non-denim pieces will retail between $100 and $160, compared with its current retail price range of $150 to $240.

"We're entering a territory that we can take full ownership of and at the same time grow business considerably," said Chris Gilbert, president of Paper Denim & Cloth. "I'm not sure there's a name for this category, but there is a big hole in the market at that price point and we feel like it's untapped."

Gilbert anticipates a 25 to 35 percent growth in wholesale volume in the first season. The retail volume for the brand topped $30 million last year.

"I'd rather own the market than be one of a number of players," he said.

By lowering the price point, the brand, in effect, hopes to increase its level of distribution, though Gilbert said a few existing accounts have already voiced concern over the repositioning.

"They're concerned about the quality of the product, but I am absolutely positive we will be able to maintain quality," he said, noting that he has also been in talks with Federated about carrying the brand. However, Gilbert said, "no actual orders have been taken."

Skepticism is sure to follow. Paper Denim competitor Michael Silver, president of Silver Jeans, questioned how consumers and store buyers will respond.

"The curiosity is how is it possible to sell a jean one week at $180 and then the next at $100," said Silver. "Something removes itself from the product and there's the challenge. Can you offer value at $100 that embodies everything you had at $150 to $200."

Silver is confident that Paper will have company on its journey downstream to more department store friendly waters.

"We hear the rumblings from the multitude of others who are going to be making their way down," he said.

However, many companies have failed to achieve a level of recognition that would make their move to lower prices significant. Paper Denim will have the advantage of its name, leaving only the execution of the new products in question.

"If they can give the consumer a great jean at $100, then it could be fantastic," Silver said.

Financial sources and denim industry experts agreed that the move would allow an established brand like Paper Denim to exploit a soft spot in the denim market. There is ample room at the $100 price point for denim brands, particularly at department stores.

"It's a pretty big challenge to come up with other brands at that price point," Silver said. "One that comes to mind would be Lucky Brands. Beyond that you can count on one hand the brands living in that price zone. It might be a sweet spot."

Gilbert thinks Paper Denim's shift could signal an end to the swelling premium denim market where prices seem to have no ceiling.

"Within a year and a half, the premium denim market will implode," Gilbert said, adding that he's seen a gradual slowdown in the market over the last six to eight months on a national and international scale.

Thomas George, owner of Chicago's E Street Denim, also views the move as symbolic of what's to come in the broader denim market this year.

"I'm surprised it's taken somebody this long to do this," George said. "We've pushed the American consumer pretty far on this basis that you've got to have it all. I applaud them for having the guts to be the first one in the pool."

pics from the fall collection

 

[faust]

Hilarious. 5 years ago $100 WAS the premium market. That's what Seven and others were selling at. Such BS.

 

[tinuvielberen]

PD&C discovers the supply-and-demand curve. Amazing!

But haven't designers been doing this for ages with "bridge" lines? The real news is why did PD&C decide to lower their prices rather than just create a "Paper by Paper Denim & Cloth" line?

The genius of marketing--getting people to pay different prices for essentially the same product...

 

[Meg]

^
I wondered that as well. I find those comments interesting from Michael Silver...mainly because P,D & C will now be big competition for them. Maybe this is more of a comment on premium denim market than on the quality....

 

[kimair]

i'm anxious to see how this all plays out, because i'm a big fan of pd&c (since scott morrison was there)...

i see how/where this new line will fit...
at the macy's in sf, you have joe's, seven, citizens, etc...the cheapest pair are sevens that are $132...

then you have all the "juniors" denim (ie, lei, bongo, jlo, guess, etc), which tends to run from $30-$80...

there isn't anything in between...
but the thing i love about pd&c is the quality, and like silver said, how can you ask someone to pay $180 for something one week, then $100 the next without sacrificing quality??

 

[Hipkitten]

there isn't anything in between...
but the thing i love about pd&c is the quality, and like silver said, how can you ask someone to pay $180 for something one week, then $100 the next without sacrificing quality??

My thoughts exactly. I've been wearing PD&C for years and love the quality. I would be terribly disappointed if they sacrificed their quality for a lower MSRP