“I used to look at $3,000 dresses and think that was reasonable – expensive, of course, but worth it. That’s just what things cost,” says New York businesswoman Betty Sargent. “Then I saw all the sales last autumn and it altered my perspective.”
Sargent, founder of internet dating agency Clicking Online, is not the only shopper who has started to question the price of designer clothing.
Brix Smith-Start, owner of London boutique Start and a big stockist of expensive, high-end labels, believes prices are reaching ridiculous levels. “There were a few designers – I’m not naming names – who were creaming it for a while,” she says. “Nine hundred pounds is just too much for a blouse, I don’t care if it’s spun from gold. It’s just too much – unless you’re a sultan’s wife or very rich, but that’s a very small percentage of the world – even smaller now.”
Alexandra Shulman, editor of British Vogue, agrees. “Many things are way too expensive, I really do think that. The bubble has been totally punctured. There will be a weeding out as the recession goes on.”
As a result of the downturn, a shift in pricing has begun. It started last autumn during the department store sales in the US after the financial markets had dived (in November last year, Saks Fifth Avenue slashed prices by 70 per cent) and is now gaining steam as brands consider the best ways to respond to consumer unrest. But the issue isn’t as simple as it might seem.
Shulman says: “Many of the most expensive things are still selling. There is definitely a consumer out there who has an awful lot of money, and they’re not baulking yet. But what designers are doing now is having to explain and justify themselves.”
Averyl Oates, fashion director at Harvey Nichols, says: “It’s a question of originality. In many cases the prices are far too high for a product that is simply run of the mill. If products are special, we’re finding there’s no problem in commanding that price.”
Oates says Balmain, home of the £15,000 dress, and Rick Owens fall into this category, while contemporary labels and niche boutique brands are also still growing. “Alexander Wang sales went up 200 per cent, and British designer clothing sales are up 60 per cent,” she says.
Brands and retailers, particularly in the US, are at loggerheads, with upscale retailers pressing for lower wholesale prices and designer brands looking for assurance that discounting à la 2008 will not recur. (The UK, for now, has been buoyed by the weak pound, which has seen an influx of European shoppers.) The problem remains: reduce prices and you risk damaging brand value – fail to do so and you risk damaging sales figures.
Ilaria Alber-Glanstaetten, chief executive of Provenance, a luxury consultancy in London, says: “It’s hard for young designers, especially in London, who maybe get their clothes produced here. They’re not getting the same margins Gucci would. They’re pricing high because their costings are high.”
George Wallace, of retail consultancy MHE, says: “It’s a tightrope. Many designers have been pricing ahead of themselves, which is causing them problems now. Most brands are looking at being 20 per cent down on like-for-like sales versus last year. Some, such as Burberry and Hermès, are holding up well, though, and I think other major brands will try to stick it out, and adjust by placing more emphasis on cheaper categories such as sunglasses and small bags.”
Some brands are turning to upscale discount outlets, such as brandalley.com and gilt.com, to solve the problem. Retailers, such as Bloomingdales, have also reportedly introduced discretionary sales, where sales assistants can approach individuals with proposed discounts.
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| A minaudière from Versus |
Finally, many labels have expanded further into diffusion lines, including Halston, Versace (with its Versus line) and Alice Temperley. Marc Jacobs, with his “Don’t Miss the Marc” line, has prices that compare with those of the high street (everything comes in at under $200).
“You’re seeing brands being much shrewder. It’s cleverer to reduce prices marginally, than have people buy on sale,” says Alber-Glanstaetten. “You don’t want a culture of people waiting for sales. Sales destroy brand value.”
When she first saw last year’s mark-downs, Betty Sargent says: “I found myself asking, ‘Was it ever worth it in the first place?’ Now I look at these dresses and think I was mad. Those prices were ludicrous. I used to be happy to spend that much on tailored items but fashion has changed – it’s all designer T-shirts and jerseys. Young people look like they just came off the Subway. Why would you spend $3,000 to look like that?”
