Tuesday, August 2, 2011

The WSJ: "How Can Jeans Cost $300?"

Did you know Americans bought $13.8 billion in Men's and Women's premium denim at the end of April 30, 2011?

So why do True Religions and J Brand sell for so much? Well, The WSJ wrote a great article a few weeks back, breaking down the anatomy of the denim using True Religion's Phantom as an example.  

In a nutshell, the mark up in luxury denim has many levels.  Most pieces of clothing have many parts that all come from dozens of providers.  For example: fabrics, button makers, designers and seamstresses, and of course wholesalers and the sales agents.  Usually, the retail mark up of these designer denim are about 2.2 to 2.6 times the cost of making them.  The mark ups doesn't just cover the cost of making these denim but for the most part  it cover the huge cost of marketing them.  Those giant billboards on Time Square doesn't come cheap you know! And then there is the cost or running their trendy stores, headquarters, shipping and the overall costs of running a business.

That's just the business side of things.  Then there are the craftsmanship involved in making the stylized premium jeans.  True Religion, for example, is known for their uber cool swirly embroidery pockets.  Often, from season to season, the jeans use materials that are patented (i.e. rivets, stitching, special washes and distressing).  The process of doing all of these techniques don't come cheap because it may involve special dying, pressing and sometimes sandpapering on the raw denim material.  When it comes down to it, it can be downright expensive especially when it is done in the U.S.  Why? Well, the U.S. have very stringent environmental and labor laws, duh!  If these denim were produced, oh in places like China well it may as well cost around $50.  

So the next time when your co-worker sneers at you for buying expensive jeans over the ones they buy at Sears or Target, telling you they are all the same.  Politely smile back and then hit them up with these facts.

Check out the full article at The WSJ Online.

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