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Why do clothes cost what they do?

Why do clothes cost what they do?

Image courtesy of Louis Vuitton Purse Blog by Amanda Hull

Because of my retail background, I was drawn to this story by Jade Warne, featured in the Shop til you drop magazine, which I have temporarily stolen from my daughter, who has never forgiven me for leaving the retail industry.

Why do clothes cost what they do? How do you know if the price is right? What makes a Prada heel worth $1400 and a Peep Toe Shoe worth $250? How can a pair of black skinnies cost $4000 from Balmain, $380 from Bassike and $50 from Bonds? When prices are limitless, is there a point where real costs end and the dream kicks in?

Assia Benmedjdoub, editor of fashion business journal Ragtrader says “It’s easy to assume that if you can buy a pair of Jeans for $20, that must be the true cost of all Jeans.” “The fact is, the number on the tag is linked to different choices fashion labels make throughout the production process.”

Cheap thrills are likely to be constructed from cost-efficient fabrics that are manufactured off-shore on a machine-driven assembly line. Conversely, high-end splurges use durable soft-to-touch fabrics that are made into garments tweaked by a patternmaker, with final stitching often completed by hand. Manufacturing is limited to between 10 – 100 pieces of a style and sold across only a handful of retail outlets.

Benmedjdoub also says “Small production runs are the only option for labels with small collections, and that adds to the price. Exclusivity comes at a premium.”

“One of the greatest myths surrounding the fashion industry is that designers make mean margins on a $700 dress, but the reality is really much more humbling,” explains Benmedjdoub.

At the top end of the market, very different factors came into play. Louis Vuitton CEO Philip Corne says prices charged by the luxury house reflect just two things: craftsmanship and customer service.

Corne also says “As the world’s leading luxury brand, we have total ownership and control of the manufacturing process, ensuring excellence at every step. In addition, we employ an exclusive distribution strategy, where products can only be purchased from trained staff within Louis Vuitton stores.”

There’s a certain wow factor that has an undeniable effect on what people pay for luxury fashion. Choice spokesman Christopher Zinn says “The best brands utilise superior materials, offer exclusivity of design and display expertise in construction. There is also the appeal of owning a label with celebrity status – and that undoubtedly elevates the value of a product on the street.”

Meanwhile, the Kmarts and Targets of the world are knocking pennies off prices faster than you can say “expect more, pay less” with immense volumes and streamlined, offshore production. “It’s smart cost-cutting, like removing stuffing from shoes and presenting T-shirts on tables instead of hangers, that allows us to lower prices,” reveals Andre Reich, Kmart’s general manager of apparel. “Recently, by removing the non-essential swing tags from clothes, we’ve been able to pass on reductions to customers of up to 50cents per garment.”

Giorgio Armani once said customers don’t care about the brainstorming behind a brand, that they “only focus on the garment hanging on the rail”. But the fact is, when we pick-up our purchase-to-be, we’re all thinking about the commitment we’ll be making at the till. At every price point, brands make choices that deliver shoppers exactly what they pay for. Whether you’re after a one-season stand, or a lifelong love affair, there’s a fashion fantasy to suit you-and your wallet.

How much are you prepared to pay for that designer luxury item?

Yours in Designer Fashion,

Belinda Vesey-Brown About the author
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