The Real Reason Luxury Fashion Is So Expensive

Last week brought two notable takes on designer garments and their bank balance-clearing price tags. “The one thing that most people don’t understand is the cost of making things,” Virgil Abloh told Highsnobiety, in response to a query over why his supposedly youth-oriented streetwear brand, Off-White, costs as much as a month in a London Zone 2 flatshare.

He then changed tack, positing that his logo tees were more “an art project that happens to make clothes and objects and things.” Literally, in the case of the repurposed Caravaggio T-shirt he’s selling for £180.

Equally keen to stress the exorbitant price of fabric that makes his products so eye-watering was Gurum Gvasaila, brother of Vetements (and now also Balenciaga) designer, Demna. When quizzed by critic Sarah Mower on why the brand’s hoodies set its customers back almost half a grand, Gurum explained that they’re made from 480g cotton, which is twice the weight of an ordinary hoodie. Mo’ fabric, mo’ money.

Off-White Founder Virgil AblohOff-White founder Virgil Abloh

There’s a pervasive mentality in high fashion – or, at least, high fashion marketing – that the more 0s on your receipt, the better the product. And loosely, sure, you can expect an Off-White sweatshirt to hold out longer than one from Primark. Some are made in Italy, some in Portugal, where if quality is usually higher than in Bangladesh, costs most definitely are.

But somehow Sunspel, the dons of well-made, well-fitted tees, craft theirs in England from home-spun cotton and still make a profit selling them for a third of the price. So perhaps Demna and Virgil’s maths are off. Or perhaps it’s not about materials at all.

There are innumerable steps in a product going from designer’s pen to your back, all of which get reflected in the price you pay. Take the year’s most sought-after item – a yellow Vetements tee with the DHL logo emblazoned across the front (yes, really) – yours for just £185.

First, there’s the designer’s time, the hours spent deciding which courier’s logo would work best. Then, the cost of licensing it – DHL needs its cut, after all. From there, materials; in this case, that high-end cotton (although it’s more like 160g for something so clingy), and elastane, for a little stretch.

Vetements DHL T-ShirtThat Vetements DHL T-Shirt

Then you need to factor in manufacturing, in Portugal, by a company called SICI93, who also craft clothes for AMI, Burberry and Margaret Howell. They’ll also provide country-specific labels and packaging, which means you can quickly export your tees globally. But once you’ve got your product made, you need somewhere to sell it.

Neither Vetements nor Off-White has its own bricks-and-mortar shop. The latter has a web-store, which either carries all manner of warehousing and distribution costs to ensure the tees get to Abloh’s customer, or means he’s outsourced it to a third-party, who take a cut of each product sold. But both brands mostly sell to retailers, and to cover their production costs and still make a profit, they’ll sell it on for at least double what they paid the factory to make it.

However, the stores need to cover their own costs too. As a back-of-a-fag-packet calculation, expect the price to at least double again. So, essentially, you’re paying four times what the product cost to make.

Therefore, it’s easy to see how a small increase in manufacturing can quickly balloon into a three-figure retail price, as each step up in thread quality, or cotton prices, or the time it takes to sew something, means a fourfold rise in what you pay in-store. But for luxury fashion, you’re only actually paying quadruple at the tail-end of sale season.

Harrods MenswearHarrods menswear department

According to Business of Fashion, rather than settle for double, shareholders actually expect a margin of around 65 percent.

And production costs make up a fraction of the expense of taking a product from sketch to on sale. There’s staffing, rent, shipping and – most bottom-line impacting of all – marketing. A runway show can cost more than £10,000 a minute to stage; social media celebs charge six-figures to wear product on Instagram; ads cost hundreds of thousands to shoot, then millions to place in the right magazines so that you, the customer, can be convinced you want – no, need – to spend as much on a hoodie as you would a holiday.

Which means you mostly end up paying for the cost of convincing you to pay for something, an Inception-level swindle that messes with your brain as much as your wallet. But this exclusive pricing is what makes luxury brands appealing – we want what we can’t have. Take Burberry, which in the 2000s went from luxury label to the de facto uniform of what was then labeled ‘chav’ culture. Its brand became tarnished by ubiquity. Its solution? Raise prices to lock out the poor and make the wealthy want it again.

And, frankly, there’s nothing wrong with that. The real reason why luxury fashion is so expensive is because people are willing to pay to have it. Our culture equates cost to quality – a 2008 study from CalTech found people who drank the same wine ranked it as more enjoyable when they were told it cost more, even though what was actually in each glass was identical. So it is with fashion – a £185 tee must, somehow, be better made than a £40 tee, we think. Even though all the evidence says it’s not.

Burberry Prorsum Men's SS16 Runway ShowBurberry SS16

But what is disingenuous is for designers to claim that you’re only paying for production. There are thousands of brands who produce tees at least as well-made – the likes of Sunspel and Tom Cridland, whose £35 tees come with a 30-year guarantee – but who don’t tap up Mario Testino to shoot their campaigns, or need to fund Bond Street rents. And yes, that’s also why people won’t queue overnight to get hold of them.

But if you’re the kind to buy into the hype – and I’m not judging, as I’m sat typing this in a Supreme cap and a Palace sweatshirt I bought 20 seconds after it hit the website – at least be aware of what it is that you’re paying for. You’re buying exclusivity, you’re paying for the apparent prestige that goes with spending more than other people, or being able to own something that other people can’t.

But spending too much on something well-made is at least better than paying too little for disposable trash. As Gurum Gvasaila put it in the same interview: “It is nicer when people save up. They can buy this one piece that they cherish for a longer time, rather than spending money on clothes every week that they throw away afterwards. The whole idea is to limit the production, having less pieces and making sure that people who buy these pieces can cherish it for a longer time.

“It’s moving away from this idea of fast fashion, to this idea of slow fashion.” Just make sure that you know precisely what you’re paying for.

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