"Investing" In High End Denim

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  1. #1 Jul 1, 2008
    Last edited: Jul 1, 2008
    $1,000 for a pair of jeans?

    With the US economy slowing, many consumers are locking up their wallets. But others are spending freely -- some call it 'investing' -- in premium denim.

    Since when did $200 become cheap for a pair of jeans? Since high-end denim became the belle of the retail ball.

    The high-end-jeans industry is on fire. Sales of premium jeans jumped 20% on a unit basis in the first quarter of 2008, according to NPD Fashionworld's AccuPanel data, while sales of less expensive jeans rose only 4% in the same period.

    "The denim business is still one of the few shining stars in a tough economy," NPD Group retail analyst Marshal Cohen said.

    The high price of looking good
    Long gone are the days when $1.25 could buy you a pair of Levi's, the price back in 1873, when Levi Strauss first sold his jeans. These days, a pair of designer jeans can cost up to $1,000. In case you don't have your calculator, that's a 79,900% surge from the good old days of Mr. Strauss.
    Encrusted, embellished and bejeweled can cost you even more.

    Take for instance, Roberto Cavalli's bejeweled jeans, a celeb favorite: They'll dent your wallet by $1,445.

    And that's nothing compared with a pair from Dolce & Gabbana. Those could run you $3,950. And if you really want to shoot the moon, a pair of Escada Couture jeans encrusted with Swarovski crystals cost $10,000. By the way, Swarovski more or less equates to Baccarat; both are Madison Avenue names.

    The most expensive jeans on record are a pair of vintage Levi's that sold for $60,000 on eBay on June 15, 2005, according to Guinness World Records.

    Designers such as Rock & Republic and 7 For All Mankind typically sell jeans in the $200 to $300 price range, but the companies have überhigh-end styles that cost $700 and $1,000, respectively. Even Levi Strauss' high-end Capital E jeans can go for as much as $501.

    And for those who want something unique, Earnest Sewn offers custom-made jeans for $660 to $1,100.

    Even Earnest Sewn's noncustomized jeans are made one at a time -- no mass production -- with one person hand-stitching a pair from beginning to end. That kind of detail will cost you about $200 a pair.

    "I've seen jeans at $790 a pair, and there is no question: People will buy them. After seeing prices that high, the $200 or $300 pair seems cheap," NPD Group's Cohen said.

    What consumer slowdown?
    Denim has been helping hold up the fashion business, Cohen noted.
    "Even in tough economic times, the consumer is not running away," he said. "Consumers call it an investment. The quest for the perfect pair is always what justifies going out and buying another pair."

    Jeans experts like to talk about denim as an investment.
    "Jeans are the only thing people wear these days, so they're still something that people can invest in," said Sharon Graubard of trend research and consulting firm ESP Trendlab. "They make you feel great, and they last forever."

    There has been a shift in consumers' thinking about high-end jeans, Cohen said. High-end denim has become a necessity for some, he said.
    And Graubard said price "doesn't seem to matter" when a consumer finds a good pair of jeans.

    Growing strong
    This is big business.
    "The denim business represents 10% of the total apparel business," Cohen said. "Ten years ago, it was only about 7% of the business. Keep in mind: It's a $200 billion business."

    Though the high-end-jeans market made up only 3% of all the jeans sold in the first quarter of 2008, the market is growing at a double-digit pace, much faster than the market for less expensive jeans. Purchases of jeans costing $75 or more jumped 24% on a dollar basis from the same period last year, according to NPD Fashionworld's AccuPanel data. Purchases of jeans that cost less than $75 were up only 2%.

    Why do we care?

    Well, the average woman owns eight pairs of jeans, according to Cotton Inc.'s Lifestyle Monitor research. Even if only half of those pairs are higher-end styles, that's about $800 worth of denim in the closet. And a lot of revenue for jeans retailers.
  2. Benefiting from the boom
    The jeans boom is building companies. Earnest Sewn is loving it. The company's retail store in New York City's Meatpacking District had its highest sales ever in April and May. Sales in the first quarter surged 220% from last year. The company has added a store on Long Island and plans to open two in Los Angeles in the fall.

    Rock & Republic is another brand that's thriving. The company is opening three stores in the U.S. and one in Dubai in the fall.

    "We are all systems go," company President Andrea Bernholtz said. "Our factories here in Los Angeles are working constantly to keep up with the demand." Bernholtz said her customers "will pay for a quality product" and that the company's "exponential growth" shows that "people are still shopping."
    The 6-year-old company makes all of its jeans in the U.S., Bernholtz said, even though it would be cheaper to move production overseas.

    For Levi's, quality is the key, said company spokesman Jeff Beckman. It can take up to 30 people to craft a single pair of Levi's premium Capital E jeans. The high-end brand "gives us credibility across our entire jeans range that we can deliver an appealing, respected and desirable premium product. That halo is important to the true denim aficionados, which can translate into equity for the brand."

    Diesel has been around for 30 years, and the company is still growing strong.
    "All of our metrics are up," said Chief Executive Officer Steve Birkhold. "We're converting more people who come into our stores, and people are spending more money. What's propelling our growth is that we're giving our consumer a lot of categories." Diesel has 40 retail stores across the U.S. and plans to open 20 more in the next three years.

    Me and my Calvins
    Remember, we're talking iconic, here. Neil Diamond sang about them. James Dean became a star in them. Nothing came between Brooke Shields and her Calvins. Now there are hundreds of brands and thousands of styles on the market.

    Finding a great pair of high-end jeans isn't necessarily a girl thing. Companies make designer jeans for kids. Less fabric, same price as the adult jeans.
    Guys will spend the money, too. Zac Paul, a stock trader in New York City, has several pairs of designer jeans. "I wear jeans all the time, for work and play," Paul said. "I've tried to do it the cheap way, but those just ended up sitting in my closet. Now I spend the money and do it right. I have no regrets."

    Here's the ultimate: Pregnant women are a key market for denim designers. Of 20 mothers and mothers-to-be I surveyed, 65% said they had bought designer maternity jeans -- to be worn for just a few months.

    Only seven women didn't.

    "They were too expensive for too short of a usage period. My maternal practicality set in," said Katharine Eaton, a human resources specialist from Glen Mills, Pa. "In retrospect, I wish I had and would do so if I was going through it again."
  3. i don't know if they are a real investment, but they do make me feel good about myself. and just like purses, they have a better resale value than non designer items.
  4. $200 for jeans is and always will be a lot of money for me to spend on jeans. There is noooooo way I would drop more than 1,000 - let alone 10,000 - dollars on jeans when I could get them for at least $800 less and they would still be very well-made.
  5. WHAO, those are some expensive jeans...
    The most expensive ones i have are $100 Levis.... and i feel so guilty about them...
  6. i agree with this 100%.
  7. They are not true investments in that you cannot expect to see the value of the good appreciate. Clothing, with a few exceptions (like haute couture), always depreciates. The cost of a good must be weighed against the consumer's values (quality, source, craftmanship, design, brand history/identity, etc). And the differences between people regarding their willingness to spend is what makes the luxury market so interesting. But, no matter how much you plan on wearing something, or how long it will last you, buying clothing and accessories is not a way to utilize capital in the hopes that your wealth will grow (which is also called investing). I wish it weren't so, because we'd all be billionaires if it we're true!
  8. Thank you! People misuse the word "invest" so regularly.

    However, I think spending a little extra money on a pair of jeans is worth it. I'd never drop more than $200 on a pair (I probably wouldn't even spend that much, but $200 is my maximum). I just feel better in my nicer, more expensive jeans than I do in my less expensive pairs.

    I'm surprised by that article. I thought the designer denim phase had died down.
  9. I have jeans that cost $15.00 up to $200 I love them all equally, but there is a significant quality difference. My cheaper jeans fray and fade much faster than my premium denims. I have had a pair of 7FAM jeans for 2 years and the still look brand new!

    Im totally not surprised that their sales have gone up in the past year.
  10. to be honest, denim is denim to me. i don't see the difference in "designer" jeans...
  11. I don't think those $1000-$10 000 jeans are "investments". How often can you were jewel studded pants? Imagine the dry cleaning bill you would rack up.

    I'm perfectly fine with buying $200-$400 jeans because I wear them so often the cost per use over time would be only pennies, but I agree with the previous posters, still not an investment.
  12. I used to pay $200 for a pair of jeans, but now I will only pay about $80 max for a pair of jeans. Many designer jeans go on sale and that's when I would buy them.
  13. I don't think they mean to use the word "investing" in that sense. I believe they are investing in the sense that no matter how long they live the jeans will never wear out or go out of style, so a $200 pair of jeans that lasts 20 years is a better investment than a $50 pair of cotton pants that only lasts a year or 2. Of course you also have to assume that you will never go up or down in size.
  14. kpassa, when you post 3rd party content, please link back to the original source. i don't see where you've done that here, if you have.
  15. Call me "out of it" or whatever, but I only buy jeans from the Gap as they fit me best by far -- and the price is right! Interesting article -- TFS!
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