What Price Luxury? Brands Go High, Low To Spur Tough Market

Many of today’s biggest fashion houses have been fiddling with price tags, but it’s stirring a sharp debate in the luxury market.

View Slideshow
But complicating the picture for American retailers buying fall collections is the weak dollar versus the euro, which threatens to make European goods much more expensive. "Next season is not the time to see increases of 20 percent," said Anne Stordahl, senior vice president and general merchandise manager at Neiman Marcus, referring to roughly how much value the dollar has lost over the past six months. "We’ve been pushing [suppliers] strongly [so] that we don’t see increases. If a customer doesn’t see the apparent reason why [the price] went up, there’s no motivation to buy. People are not in the mood for exorbitant and superfluous prices."

Stordahl stressed that she doesn’t advocate cuts across the board, but added with a grin, "I’ve never seen a customer complain if we give them true value."

But how low can luxury go in terms of price, before it starts to cheapen the brand image?

To be sure, many luxury boutiques have some surprisingly affordable items woven into the mix. Yes, Hermès has a crocodile handbag that retails for more than $100,000 at its Paris flagship, but there are also $37 coin dishes and fruit-shaped key rings for $75. Likewise, Christian Dior has $175 versions of its famous "Saddle" handbag and $55 silver earrings. Several luxury analysts noted the recent proliferation of affordable logo items at such stores as Fendi, Gucci and Prada.

Some luxury executives are defensive about the charge that they have gone downmarket with democratic prices. "Prada has never used the approach of offering lower-priced products to reach more customers," a company spokesman said. "Even the high tech nylon items have been introduced and treated as luxury items."

Christian Dior is probably the most democratic purveyor of luxury, given its recent emphasis on "J’Adore Dior" T-shirts, which retail for about $145, and low-cost accessories like denim pocket squares and wrist cuffs. But Dior president Sidney Toledano noted that the average price of a Dior handbag actually went up in 2002, to $600, and that the "average basket," or the average amount spent by consumers in a single visit, also rose last year. He noted that customers even have the option of ordering handbags from its couture atelier.
View Slideshow
Page:  « Previous Next »
load comments


Sign in using your Facebook or Twitter account, or simply type your comment below as a guest by entering your email and name. Your email address will not be shared. Please note that WWD reserves the right to remove profane, distasteful or otherwise inappropriate language.
News from WWD

Sign upSign up for WWD and FN newsletters to receive daily headlines, breaking news alerts and weekly industry wrap-ups.

getIsArchiveOnly= hasAccess=false hasArchiveAccess=false