I read an interesting article (two years old, but still relevant), a few weeks ago, about the real cost of what high end products. The example taken was pants. $350 for a Thom Brown pair, $595 from Giorgio Armani, $495 from The Row. Something might be wrong.
Eric Wilson, the author of the article, assumes that since the luxury bubble burst (when did that happen?), brands have no clue what to charge customers (pigeons?).
David Aaker, who works at Prophet, a brand consulting firms, argues that what is being charged has nothing to do with cost, but who is wearing them, who designed them and who sells them.
I’m going to side with Mr. Aaker.
Designers argue that their products are in fact a steal.
How surprising of them, BTW.
Indeed, that’s what Scott Sternberg from Band of Outsiders says.
His $550 pants sold at Bergdoff Goodman, are made in Brooklyn and cost around $110 dollars to manufacture (materials+labor). Add the usual mark ups from the brand to the retailer, and then from the retailer to the final consumer and you might get a $550 figures.
Anyway, as long as people are ready to pay that much for that…Business is business.