What causes the exorbitant prices of designer labels?

[Djavanjmiles]

It's cause of ex-change rate when we trade with other countries and cause of the war everything has gone crazy.

 

[Ghost]

i think we are also paying a little bit for all these craps

 

[AlexN]

Here's a thread.

 

[AlexN]

And here's a more recent one.

 

[Benzo]

Hey guys, all your points justify!
To add one more: the basic economics concept----demand, supply.When suppliers push the price so high, they can limit the no. of ppl buy their goods, so tht u won't see everyone on the street wearing, say Dior, to keep the co.'s image.
Another thing, if a Chanel t-shirt is charged at 5bucks, wht would u think?

(P.S. U could never be able to image how much a runway show would cost, unless u're doing it. My eyes just went wild when I heard how much they usually cost.)

 

[Lena]

Alex, muchos thanks for bringing in those older discussion links

 

[Lena]

I wouldn´t have thought that that the really rich people (let´s face it, they are often not of the youngest of age) would be turning towards independents such as Charles Anastase, are they really that well informed or are they more likely to discover more well-established, "young" designers such as Alexander McQueen, Sophia Kokosalaki, Roland Mouret or Matthew Williamson?
.

ok, the real rich mom and dad will go either for Hermes, Burberry, ysl or for something 'new' but strong enough to make a difference (see Martin Grant who's already selling like hotbread to the rich american 'ladies-who-lunch')
now.. their 'freespirit' teenage daughter, she wont go for something vulgar like Dior, she may either stick with good basic sportswear but IF she goes towards 'fashion' i doubt she will buy McQueen or Sophia.. she may turn to something more 'young' and try to make it her/his own, more individual, something she will wear first.
It doesnt have to be Charles Anastase's collection, i just stated him as a good 'alternative' example for the 'young alternative rich client'..
Sure older people have the money but their kids have the money too

 

[tricotineacetat]

Sure older people have the money but their kids have the money too

I thought they´d much rather dress up like the Olsen twins or Lindsay Lohan...

 

[rui]

Well I did work experience eith lainey keogh, regarded ireland's greatest fashion asset (cuz we have so many!!)

Anyway... lainey specialises in knitwear...

The cost of a lainey 3/4 length cardigan is £900 but if it's embroidered it's ov
er $1600

But she uses pure cashmere's and "steel" or silk... They are knitted in ireland whish itself is very expensive, all other clothing manufacturing has moved to eastern europe. She uses domestic knitting machines which is a lot slower but can do certain things on these machines then you can do on industrial machines. A LOT of things have embroidered flowers that need to be hand-sewn on (I know all about that!) that are ctaully done in the studio not the factory. Everything is felted...

I use to work with Lainey's knits in my retail days and they in my opinion are very much worth the price points! so is Carpe Diem!

 

[Venús As A Boy]

they're like wearing knitted love... so snuggily

 

[faust]

I think it can be simplified even further--by limiting supply, which raises demand, they use very basic mathematical forumale to determine what the highest price per unit they can afford to sell, before their profits begin to drop on the other side of the curve. (the curve being price/units, with more units being sold at lower prices for x profit, and less units being sold at higher prices for y profit, and somwhere in the middle is z profit, where the max price and the amount of units shifted meet).

That is the bottom line, and although all these other factors play in--value of the label, quality of the materials, advertising budgets--it all comes down to a standard business equation--what's the most money we can make?

Yep, we learned this in business school. It was fascinating, actually...

 

[kLm]

Fascinating and quite simple. It tends to get overlooked in these discussions.

So does the fact that a label like Cloak, in order to be taken "more seriously," raises prices to be more in line of other labels of their ilk, to avoid the "cheap" tag. If you're playing in DH territory, but not selling for DH money, then you might get saddled with the notion that somehow, you have an inferior product because it costs less. I use Cloak as an example because I know that was the case, as a fact, and I'm quite sure that other smaller labels feel pressured to do the same (this doesn't even take into account that the smaller label actually does have higher costs than the larger label does, proportionally).

 

[faust]

Fascinating and quite simple. It tends to get overlooked in these discussions.

So does the fact that a label like Cloak, in order to be taken "more seriously," raises prices to be more in line of other labels of their ilk, to avoid the "cheap" tag. If you're playing in DH territory, but not selling for DH money, then you might get saddled with the notion that somehow, you have an inferior product because it costs less. I use Cloak as an example because I know that was the case, as a fact, and I'm quite sure that other smaller labels feel pressured to do the same (this doesn't even take into account that the smaller label actually does have higher costs than the larger label does, proportionally).

Also true. Economies of scale is the business lingo term for that...

Don't mean to derail the thread, but interesting observation about Cloak. I thought Cloak raised prices purely out of a sense of entitlement of having been recognized as a high-end designer. Current season's cotton/cashmere light sweater with slight distressing made in China is $380
Compared to my heavy knit wool/angora cardigan/jacket from FW04, also made in China, but that required infinitely more work because entirely done by hand, at $425, it's a pretty shocking price hike.

 

[faust]

It's cause of ex-change rate when we trade with other countries and cause of the war everything has gone crazy.

I love it how your post and your signature make one complete statement that is actually true.

 

[JJohnson]

Wow im in economics now and this is interesting. People pay what they "think" something is worth. This goes for the market. Its what ppl think that drives it. The materials of clothing also comes into play, but i heard that only 30% of an item has to be made in that country, and i also heard that Italy doesnt care that much really, so something could be made in China then sent to Italy for finishing touches. There is also the high market downtown. For instance I think things downtown may be marked up over 500%! Another thing is that designer thigns are luxury items. U can go to Walmart and get a shirt, or you can go to Christian Dior. Its your choice

 

[PrinceOfCats]

If we're all getting down with the hip kids on this business lingo, then 'Veblen good' is the name given to commodities which may even experience an increase in quantity demanded as a result of a price incrase... Big up Thorstein, my home boys.

People pay what they "think" something is worth

You certainly do a different economics course to the one I did...

 

[Mutterlein]

I now what you and Lena are talking about Tric, I noticed it when I went to see the stores in Atlanta. Atlanta is not a fashion mecca but there are a lot of rich people. There was the usual Hermes, Burberry, Salvatore Ferragamo, and other stuffy/established brands. But I did catch a glimpse of Roland Mouret at Nordstrom and it was selling well (albeit to other stores in California).

Atlanta being as conservative and mainstream as it is acts as a microcosm (or macrocosm?) for the general attitude and enviroment for high end clothes in America (outside of NYC and LA). The top brands I think in the city for the season were : Chloe, Lanvin, John Galliano, Valentino, Cavalli, Armani, Chanel, Prada, Rena Lange, Carolina Herrera, and Jean Paul Gauliter. This is for the deparment stores, so I'm not sure about how the Gucci, Versace, Buberry, Hermes, Salvatore stores did but I'm sure they sold lots and lots. The popular brands from the younger crowds were Missoni, Moschino, and Diane Von Furstenburg, very expected.

I think that gives a pretty good idea of what women are interested in. There were no progressive labels really to be found. The younger and more independent designers being supported were nothing spectacular either. They did have Proenza Schouler at Nordstrom, again they are new but fitting in with the old tradition.

The items that came from labels like Rochas and Balenciaga at Jeffery's were the most watered down and mainstream crap ever. They had nothing from the runway at Balenciaga, it was just sweaters. The selection at Rochas was so boring I didn't even recognize it. Women don't want runway fashions exactly, they like to know they are there and pay lots of money for clothes with the label but they aren't so appreciative.

And you know there are tons of rich young women in Atlanta who could buy Mouret, but you know where they spend all of their money?? Juicy Couture!!!

 

[Mutterlein]

If we're all getting down with the hip kids on this business lingo, then 'Veblen good' is the name given to commodities which may even experience an increase in quantity demanded as a result of a price incrase... Big up Thorstein, my home boys.



Y

that's how Bathing Ape makes their money, Nigo even openly admits it.

 

[fashionista-ta]

Greed.

 

[Johnny]

^^ 'greed.