Justifying the $550 Pant

Discussion
May 12, 2010

By Tom
Ryan

Despite
the downtown
and luxury
meltdown,
many
pants
can easily
be found
at retail
north
of $500.

An article in The New York Times explored the rationality of
such high-priced items, mentioning $480 khakis from Michael Bastian, $595 slacks
from Giorgio Armani, $780 pants with elasticized cuffs from Bottega Veneta,
and $350 Thom Browne chinos.

Some fashion observers tossed off the lofty prices
purely to image.

"The cost of creating those things has nothing to do with the price," said
David Aaker, the vice chairman of Prophet, a brand consulting firm. "It
is all about who else is wearing them, who designed them and who is selling
them."

But Scott Sternberg, whose Band of Outsiders label sells a $550
khaki at stores like Bergdorf Goodman, asserted the quality of the materials
and craftsmanship merits the price.

"It sounds crazy to say this, I know, but our pants are a steal," said
Mr. Sternberg.

To make his case, he gave the Times a tour of its factory,
Martin Greenfield, in Bushwick, Brooklyn, "where little has changed in
the production of tailored clothing in a century."

The author, Eric Wilson,
described the scene, "A man was hovering over
an 80-year-old contraption called a jump iron, hot enough to mold fabrics into
shapes they will be unlikely to forget. Another man basted panels of suit fabric
to springy canvas, which makes the garment more flexible. In a machine-made
jacket, the canvas would be fused or glued into a suit."

In sum, Mr. Sternberg’s
pants cost about $110 each to make, about a fifth of their retail price.

The
costs for fabric were tallied at $54 for each pair. The fabric, a resilient
cotton gabardine, costs $24 a yard, plus $3 a yard to import. With details
largely sewn by hand, the union shop pays employee $13 an hour with the average
pair of pants taking four hours to make.

With the designer’s markup, the wholesale
price comes to $220. The retailer adds another markup (typically about 2.5
times) to yield a $550 price tag.

The author concludes, "A machine might make
pants more cheaply, Mr. Sternberg said, but for a designer who wants to be
known for quality, what would be the value in that?"

Discussion Questions: Is demand for pricey pants driven more by image or the
quality of materials and craftsmanship? Does it take a different type of marketing
and sales approach to sell these items today than in the past?

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13 Comments on "Justifying the $550 Pant"


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Paul R. Schottmiller
Guest
Paul R. Schottmiller
11 years 6 days ago

Why do some people pay $500 for pants? …because they can.

Dick Seesel
Guest
11 years 6 days ago

$550 pants aren’t “about” being rational, any more than a $2000 handbag or a $90,000 sports car. It’s really about the luxury market returning to the mindset where customers feel they have “permission” for these kinds of indulgences.

The same trend is showing up in the luxury hotel trade, which took the biggest hit during the depth of the recession and is now the fastest-growing segment. I’d guess that “status marketing” is the best angle for selling products like these, instead of adapting to the “new normal,” where it would be tougher to justify the “permission” mindset in the first place.

Kevin Graff
Guest
11 years 6 days ago

$100 jeans used to seem like a crazy idea. So, did $100 dress shirts. But now? As with everything, prices go up … but so does the appetite for conspicuous consumption. There will always be a sizable group of consumers who seek out the ‘label’ and the image that comes with it. Value, in the eyes of these consumers, is always achieved, regardless of the price. You might be able to rationalize the price with the ‘quality’ argument, but most need not bother. I often say that if Prada purses were priced at only $200, they would sell a lot less of them!

Bernice Hurst
Guest
11 years 6 days ago

As Paul says, if people can afford to pay what others may consider a lot to be seen in something they want to be seen in, then there is a niche to be filled and not one which we mere mortals have the right to deny either designer, retailer or customer. What’s the old saying? If you’ve got it, flaunt it.

Joan Treistman
Guest
11 years 6 days ago

Back in the ’70s I was astounded that someone could buy $90 pants. Were those the $500 pants we talk of today? I have no idea.

Although I believe image trumps quality when it comes to purchases like these, I must admit there’s an aspect of luxury buying that leaves me in the dark. I have a friend who truly understands quality of material, i.e. English woolens vs. the other kind and how many stitches in a lapel make the jacket worthy of consideration.

The funniest story about the other side of the equation has to do with my husband bragging how he had just discovered that he could buy pants and have them shortened to size via the Eddie Bauer catalog. My friend who is worldly wise and buys according based on material and lapel stitches just sat there with a neutral stare.

What is the old saying? Different strokes for different folks.

W. Frank Dell II, CMC
Guest
11 years 6 days ago
To spend $500 on a pair of paints depends on where you are coming from. In non-foods retailing, merchandise is graded as good, better and best. Clearly, $500 paints falls into the best grade. Different people buy them for different reasons. For the truly rich, it is a smaller purchase than shopping at Kohl’s for middle income consumers is. They shop at exclusive stores for the service and style, not the price. For some customers, clothes are important as they don’t have the summer home in the Hamptons, a yacht or a hobby. Some make believe rich will pay the price to create or keep up a social image. Even though it does not seem rational to the majority of people, there is a market and retailers must service their target market. In the book the Millionaire Next Door, the common vehicle driven is a Food pickup truck. This does not mean there is not a market, but that it’s just not driven completely by wealth alone.
Paula Rosenblum
Guest
11 years 6 days ago

Let me flip this argument on its head for a second.

I used to think the MacBook Air was all about image. Then I bought a netbook. I paid less, but the thing is barely functional – tiny keyboard, horrible screen resolution…it’s not really a working computer. Then I tried my friend’s Air. EXACT same weight as my netbook, but with a full sized screen and keyboard.

I’d PAY for a PC that could make the same claim. So is it about image, or premium functionality? I ask myself – given that everyone is now using the same CPU, why can’t a PC maker create a high end, lightweight, but full sized laptop?

Same is true with clothes. Some folks are willing to pay for the fit, trim and quality. The rest of us aren’t. But that doesn’t mean the market should be ignored.

Cathy Hotka
Guest
11 years 6 days ago

OK, people, we’re all in the wrong business.

There’s a keen lesson here — great marketing can sell any product. And I don’t say that just because I’m rocking a terrific Banana Republic top that I scored in a Goodwill over the weekend. Advanced analytics techniques will help retailers determine how to upsell this way and make even more money.

Ed Rosenbaum
Guest
11 years 6 days ago

I read this and immediately thought this is a joke, right? Wrong … this is serious when someone is willing to spend $500 and more for a pair of pants. How much are they going to pay to have them cleaned when they spill an expensive cup of coffee on them while talking on their state of the art cell phone while driving their $100,000 sports convertible down South Beach?

I understand there are those who can afford it and advertise they can by buying and wearing clothing and other spoils of their success or riches. I have visited shopping malls that cater solely to those who can afford to purchase there. Even the sales staff looks down their nose at you if you look like you can’t afford to purchase at those finer shops. But there comes a time when reality must set in and a choice made to either waste money on purchases like this or wisely invest in your children’s future.

Mel Kleiman
Guest
11 years 6 days ago

Lots of different opinions on spending $500 on a pair of pants. But let’s hope that lots of people: 1. Can afford to spend $500 on a pair of pants, and; 2. Will continue to spend $500 on a pair of pants.

Good for the economy, good jobs, good for all of the taxes that are collected.

As long as people are spending, the economy will be growing.

Roger Saunders
Guest
11 years 6 days ago
One of the finest interior designers on the planet is John Saladino. He’s stated, “Every night I go to bed, and hope that people with money get taste, and people with taste get money.” The designers of $500+ pants have to have the same dreams racing through their heads. While the consumer niche in this space is small, there are blocks of them who are in it for the IMAGE, the QUALITY, and for the QUALITY/IMAGE combined — the latter fulfilling designers’ dreams of TASTE and MONEY coming together. Reviewing the April, 2010 Consumer Intentions & Actions (CIA) Survey regarding consumers who spend $300+ per month on their clothing. When asked, “Why they buy clothing at a particular retailer,” individuals who are looking for the latest style say:Selection – 72%Quality – 70%Fashion Ideas – 66%Service – 64%New Styles – 64% The majority of consumers in this $300+ bracket point out that they prefer to buy items on sale — their top reasons are: Selection – 85%, and Price – 79%. For $500+ pants to move… Read more »
David Livingston
Guest
11 years 5 days ago

It has to be image. Quality has little to do with it. You can buy quality pants for 90% less, but not the image. Someone mentioned earlier about the $90,000 sports car. Well, I can tell right away it’s not a $20,000 car. But when it comes to pants, I wouldn’t know the difference between a $500 pair and one for $10 pants from Wal-Mart. What is priceless is how well they fit.

Ted Hurlbut
Guest
Ted Hurlbut
11 years 5 days ago

There is a market for just about anything, at any price. it may not be a very big market, but it’s a market nonetheless.

Why do people make and sell $550 pants? Because there’s a market. For people in the market for $550 pants – for people who have that kind of discretionary money – value is obviously denominated in things other than price.

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