Ever wonder why designer items, which can often cost as much (if not more than) one month’s rent are only getting more and more expensive? Yeah, me too. Thankfully, Lauren Sherman, reporter at The Business of Fashion, investigated the issue at hand, finding over five different explanations. Here are three that I found particularly interesting.
Expensive = exclusive (and to some that’s a good thing): Sherman writes, “perception and desirability play a huge role in the pricing game.” When a brand raises its prices it attracts a fresh, wealthier customer base, that’s willing to (and actually can) drop the big bucks for the newest pieces on the market. And what brand wouldn’t love that?
Raw materials are more expensive: “Cattle prices (which are relevant to leather goods) will rise in the US by 7.3 percent in 2013, according to market research firm Allendale,” writes Sherman. But it doesn’t stop there. Cotton prices are also higher than ever before, up 13 percent from last year. Additionally, brands are also choosing to invest money in crocodile farms to harvest materials for the shoes and bags which in turn influences just how much your item costs.
It’s going to get marked down anyway: Looks like the “70 percent-off sale season” could be coming back to bite you in the butt. Matthew Walker, Creatures of the Wind chief executive, who served as president of The Row from 2008 to 2011, tells Sherman, “designer brands repeatedly going on sale may eventually be forced to artificially inflate prices to counter the margin pressure.”