Oh, Love That! You Paid What?
By RUTH LA FERLA
Liz Toney, a fashion stylist in New York, had hoped to buy a white lace Peter Som dress for herself this spring, but was stopped in her tracks by its price tag: $1,300. She was also scared off by the $400 price of another most-wanted item on her list, a hot-pink dress from Catherine Malandrino.
"Prices are definitely higher than they were a year ago," said Ms. Toney, who is in her 20's. "Even with our economy getting a little better, these are not prices that I can afford. So I'm shopping less in the bigger stores and going instead to sample sales and places where I can get better deals."
Ms. Toney is typical of a breed of shopper who continues to shop but is troubled by a perceptible jump in the prices of designer goods, which are up as much as 10 percent over last spring, merchants say. Her dawning sense that something is amiss is being reinforced at cash registers across the country, where prices have been forced up by the dollar's shrinking value against the euro and by a general disconnect between the makers of high fashion and the economic constraints facing average consumers.
At stores like Bergdorf Goodman in New York, which specializes in European and American designer clothing, customers are experiencing price jumps of 6 to 7 percent, said Robert Burke, the store's fashion director. Other merchants reported increases of 10 percent or more since spring 2003, not enough to rock fashion zealots but enough to register. The "moderate apparel" category, encompassing the secondary lines of many designers, remains unaffected, for the moment at least.
The 10 percent bump for designer goods — more than five times the increase in the consumer price index for the 12 months ended in February — is largely a result of the dollar's sharp fall against the euro. In mid-February, the euro reached $1.28, up from $1.05 in April 2003. Most high-end designer clothing comes from European factories or is made with fabrics from European mills.
"The bad value of the dollar to the euro is affecting everyone," said Kal Ruttenstein, fashion director of Bloomingdale's. "Designers are very aware of the issue. They want their clothes to sell. They don't want to take markdowns. But neither do they want their customers to get sticker shock."
Retailers say that people are still shopping. High-fashion customers, affluent to begin with, seldom stop cold turkey when prices rise. They cope by buying fewer pieces, but more distinctive ones.
Indeed, some stores, like Saks Fifth Avenue and Neiman Marcus, are citing preliminary increases of more than 10 percent in spring sales of designer clothes and accessories, compared with this time last year, according to Women's Wear Daily. To explain the demand even in the face of rising prices, retail experts cite the success of designers in creating covetable spring clothes in bold patterns and colors like pink and orange, as well as a confidence among customers who are more optimistic than the economy might warrant.
Come fall, however, those blithe shoppers may be stopped dead in their tracks. Fall designer clothing is expected to jump by 20 percent or more.
Rose Clark, the vice president for merchandising at Stanley Korshak in Dallas, which caters to an affluent crowd, cited increases of 25 percent for European designer goods that will begin arriving in stores in late summer. Mr. Ruttenstein, who like Ms. Clark recently returned from a European buying trip, likewise noticed price jumps of 20 to 25 percent. Shoppers accustomed to paying $4,000 for a Chanel jacket at Bloomingdale's will find themselves spending closer to $5,000.
Portents are already in the air. A stroll through Manhattan department stores last week turned up price tags that might cause even devout fashion followers to hesitate. At Bloomingdale's, a Celine cotton twill miniskirt bordered with brass grommets was priced at $1,050; Blumarine jeans in a white canvas much like the fabric used in jeans at the Gap were $630; and a Marc Jacobs cropped cotton seersucker jacket was $1,100.
At Saks Fifth Avenue, a Michael Kors poncho — little more than a square of patterned silk with a slot at the center to poke one's head through — was marked at $890. And at Barneys, a plain sleeveless silk gingham camp shirt by Behnaz Sarafpour, an American designer little known outside fashion's inside circles, was marked at $690. A minuscule pair of oatmeal-color cotton shorts from Proenza Schouler, also far from a household name, was expected to fetch a staggering $720.
"We notice that our clients are purchasing less units — about 10 percent less — in designer clothes, but purchasing more expensive pieces," said Judy Collinson, the general merchandising manager of Barneys.
Michael Silverstein, a fashion consultant and an author of "Trading Up: The New American Luxury" (Portfolio, 2003), said: "Women in particular are still buying fashion, especially items that confer prestige. They're willing to put their money on certain pieces that telegraph luxury at 100 feet away."
Other experts cautioned that such assessments tend to be shortsighted. "Perhaps designers are believing the press about the recovered economy and adjusting prices upward accordingly," said Candace Corlett, a principal at WSL Strategic Retail, a consulting firm in New York. "They are pushing up prices in a way that is out of line with the economic reality that people's investments and savings have not grown, and are not going to grow dramatically."
Ms. Corlett added that consumers are aware that "nobody has an inside track anymore on how to grow money fast."
"Consequently," she said, "many of them are pulling back on their purchasing."
To retain customers as clothing prices rise faster than inflation, stores find themselves forced to make concessions. "We don't take as high a margin in some cases," Ms. Clark of Stanley Korshak said. In transactions with designers, major stores have the upper hand. "Some companies we work with will take a lower markup," Ms. Clark said. "It all depends. The question is, How badly does the company want to be represented?"
American designers who manufacture domestically but buy their fabrics in Europe suffer because the cost of raw materials is up. Like stores, they are faced with the unpleasant choice of absorbing the increases or passing them on and running the risk of turning off consumers. Jamie Davidson, a partner in Normandy & Monroe, which sells cashmere jackets retailing for $1,200 at stores like Barneys and Neiman Marcus, said that European cashmere is up about 30 percent. "But we have not raised our prices at all," he said.
"It's scary, to be honest," he added. "Kind of like when there is a gas shortage and prices go up — when world companies realize they can get a higher amount for gas, they're reluctant to bring it back down again. I hope that will not be the the case with the fabric mills."
Last week, Natalie Leeds breezed across the sixth floor of Saks in Manhattan, toting her handbag on one arm and a cream and yellow houndstooth linen jacket by Dolce & Gabbana on the other. An intrepid shopper long inured to the cost of high fashion, Ms. Leeds did not balk at the jacket's $3,000 price tag, murmuring resignedly, "It is what it is." All the same, she confided that the price of spring fashions sometimes strains the limits of credulity.
"I saw a white cotton T-shirt with a sequined neckline that cost $1,800," she said. "Now I think's that's off."
By RUTH LA FERLA
Liz Toney, a fashion stylist in New York, had hoped to buy a white lace Peter Som dress for herself this spring, but was stopped in her tracks by its price tag: $1,300. She was also scared off by the $400 price of another most-wanted item on her list, a hot-pink dress from Catherine Malandrino.
"Prices are definitely higher than they were a year ago," said Ms. Toney, who is in her 20's. "Even with our economy getting a little better, these are not prices that I can afford. So I'm shopping less in the bigger stores and going instead to sample sales and places where I can get better deals."
Ms. Toney is typical of a breed of shopper who continues to shop but is troubled by a perceptible jump in the prices of designer goods, which are up as much as 10 percent over last spring, merchants say. Her dawning sense that something is amiss is being reinforced at cash registers across the country, where prices have been forced up by the dollar's shrinking value against the euro and by a general disconnect between the makers of high fashion and the economic constraints facing average consumers.
At stores like Bergdorf Goodman in New York, which specializes in European and American designer clothing, customers are experiencing price jumps of 6 to 7 percent, said Robert Burke, the store's fashion director. Other merchants reported increases of 10 percent or more since spring 2003, not enough to rock fashion zealots but enough to register. The "moderate apparel" category, encompassing the secondary lines of many designers, remains unaffected, for the moment at least.
The 10 percent bump for designer goods — more than five times the increase in the consumer price index for the 12 months ended in February — is largely a result of the dollar's sharp fall against the euro. In mid-February, the euro reached $1.28, up from $1.05 in April 2003. Most high-end designer clothing comes from European factories or is made with fabrics from European mills.
"The bad value of the dollar to the euro is affecting everyone," said Kal Ruttenstein, fashion director of Bloomingdale's. "Designers are very aware of the issue. They want their clothes to sell. They don't want to take markdowns. But neither do they want their customers to get sticker shock."
Retailers say that people are still shopping. High-fashion customers, affluent to begin with, seldom stop cold turkey when prices rise. They cope by buying fewer pieces, but more distinctive ones.
Indeed, some stores, like Saks Fifth Avenue and Neiman Marcus, are citing preliminary increases of more than 10 percent in spring sales of designer clothes and accessories, compared with this time last year, according to Women's Wear Daily. To explain the demand even in the face of rising prices, retail experts cite the success of designers in creating covetable spring clothes in bold patterns and colors like pink and orange, as well as a confidence among customers who are more optimistic than the economy might warrant.
Come fall, however, those blithe shoppers may be stopped dead in their tracks. Fall designer clothing is expected to jump by 20 percent or more.
Rose Clark, the vice president for merchandising at Stanley Korshak in Dallas, which caters to an affluent crowd, cited increases of 25 percent for European designer goods that will begin arriving in stores in late summer. Mr. Ruttenstein, who like Ms. Clark recently returned from a European buying trip, likewise noticed price jumps of 20 to 25 percent. Shoppers accustomed to paying $4,000 for a Chanel jacket at Bloomingdale's will find themselves spending closer to $5,000.
Portents are already in the air. A stroll through Manhattan department stores last week turned up price tags that might cause even devout fashion followers to hesitate. At Bloomingdale's, a Celine cotton twill miniskirt bordered with brass grommets was priced at $1,050; Blumarine jeans in a white canvas much like the fabric used in jeans at the Gap were $630; and a Marc Jacobs cropped cotton seersucker jacket was $1,100.
At Saks Fifth Avenue, a Michael Kors poncho — little more than a square of patterned silk with a slot at the center to poke one's head through — was marked at $890. And at Barneys, a plain sleeveless silk gingham camp shirt by Behnaz Sarafpour, an American designer little known outside fashion's inside circles, was marked at $690. A minuscule pair of oatmeal-color cotton shorts from Proenza Schouler, also far from a household name, was expected to fetch a staggering $720.
"We notice that our clients are purchasing less units — about 10 percent less — in designer clothes, but purchasing more expensive pieces," said Judy Collinson, the general merchandising manager of Barneys.
Michael Silverstein, a fashion consultant and an author of "Trading Up: The New American Luxury" (Portfolio, 2003), said: "Women in particular are still buying fashion, especially items that confer prestige. They're willing to put their money on certain pieces that telegraph luxury at 100 feet away."
Other experts cautioned that such assessments tend to be shortsighted. "Perhaps designers are believing the press about the recovered economy and adjusting prices upward accordingly," said Candace Corlett, a principal at WSL Strategic Retail, a consulting firm in New York. "They are pushing up prices in a way that is out of line with the economic reality that people's investments and savings have not grown, and are not going to grow dramatically."
Ms. Corlett added that consumers are aware that "nobody has an inside track anymore on how to grow money fast."
"Consequently," she said, "many of them are pulling back on their purchasing."
To retain customers as clothing prices rise faster than inflation, stores find themselves forced to make concessions. "We don't take as high a margin in some cases," Ms. Clark of Stanley Korshak said. In transactions with designers, major stores have the upper hand. "Some companies we work with will take a lower markup," Ms. Clark said. "It all depends. The question is, How badly does the company want to be represented?"
American designers who manufacture domestically but buy their fabrics in Europe suffer because the cost of raw materials is up. Like stores, they are faced with the unpleasant choice of absorbing the increases or passing them on and running the risk of turning off consumers. Jamie Davidson, a partner in Normandy & Monroe, which sells cashmere jackets retailing for $1,200 at stores like Barneys and Neiman Marcus, said that European cashmere is up about 30 percent. "But we have not raised our prices at all," he said.
"It's scary, to be honest," he added. "Kind of like when there is a gas shortage and prices go up — when world companies realize they can get a higher amount for gas, they're reluctant to bring it back down again. I hope that will not be the the case with the fabric mills."
Last week, Natalie Leeds breezed across the sixth floor of Saks in Manhattan, toting her handbag on one arm and a cream and yellow houndstooth linen jacket by Dolce & Gabbana on the other. An intrepid shopper long inured to the cost of high fashion, Ms. Leeds did not balk at the jacket's $3,000 price tag, murmuring resignedly, "It is what it is." All the same, she confided that the price of spring fashions sometimes strains the limits of credulity.
"I saw a white cotton T-shirt with a sequined neckline that cost $1,800," she said. "Now I think's that's off."
