Price tag? Expensive!

Have you ever wondered what makes a shirt, dress, or a basic pair of jeans cost more than your average 6-month salary? Why are designer clothes so expensive? I get this question a lot, so I did a bit of research and, as it turns out, even the ones selling the luxury goods have no idea why they cost as much as they do. If you browse through the online retail sites such as Net-a-Porter, you’ll find a variety of basic white cotton blouses for a (symbolic!) price, ranging from 200-500 Euros. At a first glance, the blouses don’t look that much different from your regular H&M model. The materials may be a bit more high-end, but the design and basic shape are the same. So, I tried contacting the 24-hour customer care at Net-a-Porter. I pretty much asked them if they can- on a basic, white Marni blouse example- explain the cost breakdown. Spoiler alert: They didn’t! I received a blunt reply, stating I should contact the manufacturer rather than retailer because they don’t provide product details other than the ones provided by the brands. Bravo for your ignorant employers! I’ll still, however, try to provide you with a proper answer.

Firstly, let us be honest- sometimes, it’s a matter of perception. It is pretty easy to understand the issue if we put it this way. Imagine you are a fashion designer that is presenting his/her first collection tomorrow. If you’re prices range from 100-300 Euros, you’ll be classified as a brand in the contemporary market. However, if your prices range from 500-1000 Euros, you’ll be classified as lower luxury to high end luxury. That is how retailers classify brands; depending on your price range you’ll be defined in the market. They don’t really care why your prices are high or low- their job is to classify your products, and that’s all there is. (Dan Daniels plays in the background!)

Secondly, the manufacturing of clothes has gone through a rapid restructuring process. Production has left the western world to profit from (and exploit!) low-income countries. That is why we continuously witness our clothes being made in China, India, Pakistan etc. A product needs to be sown, combed, knitted, cut, stitched, finished, embroidered, printed, labelled, packaged and transported all around the world. You must be aware of the fact that low prices are enslaving workers, providing costumers a finished product for just a couple of Euros. That is not magic- it is a cruel consequence of a harsh world we live in. Luxury and high-end brands still respect their workers and cultural values. That is why majority of their products are still being manufactured in Italy, France or the UK. Last year, Karl Lagerfeld payed tribute to atelier seamstresses at Chanel show. He transformed Paris’s Grand Palais into a Chanel workshop with rolls of fabric, mannequins, sewing machines, cutting tables and seamstresses at work in front of the audience, focusing on the intricate craftsmanship displayed on its luxurious outfits and shining spotlight on his artisan workers. When it comes to haute couture, it is pretty much clear- uniqueness and exquisite craftsmanship justify the high prices.

Now, let’s go back to the basic products, such as t-shirts or blouses. Basic, cotton tees with no unique qualities, cost a lot when they’re made by Marni, Lanvin or Celine. Do you really need to pay hundreds of Euros for a basic clothing item for which the shape and style has already been invented? Well, probably not but I found a warped explanation for this phenomenon at The Business of Fashion:

“First, let’s consider the rough costs of producing a luxury product. Gross margins for luxury companies typically hover around 65 percent — that sounds like a lot, but it’s what shareholders now expect. It also means that a $3,500 bag costs roughly $1,225 to produce and bring to market, all the way from materials to sale. There are many steps along the way that contribute to the final price. There are the costs of raw materials, design, manufacturing and fulfillment. Then, at retail, there’s the cost of prime real estate and sales staff. And finally, there’s marketing: those glossy fashion adverts cost a pretty penny to produce, let alone to place. Over the past 10 years––and particularly since the end of the recession––many of these costs have increased dramatically.”

In many cases, designers still up the prices on their products to gain an added sense of prestige and exclusivity. Sometimes, they even put you on a waiting list for these costly, luxurious items (does Birkin bag ring a bell?). Why they do it? Well, the answer is simple- because they can. The fact that the majority of the world cannot afford their items makes the items even more desirable to wealthy people. The price tag, as much as the product itself, makes an item remarkable. It’s a psychological game, really, and the high-end brands are counting on it to work. It’s why the perfectly reasonable 20 Euro Zara/H&M shirts, despite being way less expensive than the Celine shirts, may not look as attractive to some. To conclude, I still have no adequate answer to why the Yves Saint Laurent gowns cost up to 35.000 Euros (note: a bank teller makes 20.000 Euros a year), or why the Louis Vuitton bags cost up to 20.000 Euros (note: the average cars is, like, 15.000 Euros). Luxury item prices have risen 25 to 50 percent over the past five years, putting the price of being fashionable totally out of control.

Cover Photo credit: Pinterest