November 12, 2012

Over-Dressed by Elisabeth L. Cline.
The shocking high cost of cheap fashion.

For the last fifteen years, Americans have enjoyed an almost unabated and unprecedented free fall in the average price of clothing. We pay less for for clothes, when measured as a share of our income, than ever in history. In 2009 American consumers dedicated less than 3 percent of their annual household budget to apparel. The price of just about everything in America has climbed in recent decades - housing, gas, education, healthcare, and movie tickets. Meanwhile, clothing is a better bargain than ever.

The retailers with the lowest prices are the ones that have earned American’s loyalty. According to S&P’s industry surveys, the three retailers with the highest brand value (meaning a store’s ability to generate excitement and demand) during the recession are H&M, Walmart and Zara. Forever 21 would probably be on the list if it weren’t a privately held company.

American style was for hundreds of years handmade or made by a dressmaker or tailor. The places we shop for clothes today are the survivors of three decades of ruthless competition based largely on price. The fashion industry has become so homogenous that most consumers now shop at retailers who give us the lowest price first and do so year-end. Even high-end designer clothes can now be had for cut-rate prices on web sites such as Bluefly, Gilt Groupe, and (, , ).,,, , & are the famous blog sites exclusively for bargain hunter. is a site devoted to handcrafted and locally made in new York.

According to recent estimates, raw materials account for 25 to 50 percent of the cost of producing an item of clothing, while labor ranges from 20 to 40 percent. Cheap fashion does rely on cheaper materials. The difference in fabric prices between two countries, for example Japan and China, might be fifty cents, not enough to really impact price tags. It’s labor cost that makes the all the difference.

In the world of designer stuff, people go to Miu Miu, Louis Vuitton, Saks Fifth Avenue and Bergdorf Goodman in Manhattan.  Bergdorf Goodman sells some of the finest clothing money can buy, including couture and very established ready-to-wear lines by Oscar de la Renta, Chanel, and Yves Saint Laurent. They also carry contemporary designers as Jason Wu, Norma Kamali and Michael Kors.

French tycoon Bernard Arnault acquired Christian Dior in 1987 and thus the luxury good conglomerate Moet Hennessy - Louis Vuitton (LVMH) was born. In the years since, as Dana Thomas explains in her book, ‘Deluxe: How Luxury Lost its Luster’, almost the entire luxury market has sold its small family owned flavor for global expansion funded by shareholder brands, including fashion labels Fendi, Givenchy and Marc Jacobs. A second major luxury conglomerate, PPR, owns Bottega Veneta, Gucci, Yves Saint Laurent, Balenciaga, Boucheron, Sergio Rossi, and half of Alexander McQueen and Stella Mccartney.

The tinted fortresses of the luxury brands Armani, Bottega Veneta, Escada, Fendi, Gucci, Louis Vuitton, Prada, Pucci, and Sergio Rossi are all lined up near center park on Manhattan’s fifth avenue. These companies put on a good show of being Old World and exclusive, yet there are clearly marketing to every Jane Doe from Idaho to Georgia who walks that stretch sidewalk. They all have similar layouts. the first floor is the most welcoming, well lit and staffed. This floor is dedicated to scarves, jewelry and other small accessories, but mostly handbags. Luxury handbags are one of the biggest scams in the retail world and they are marked up as much as ten to twelve times over the cost of the production. On highest floors, the environs get far more exclusive. This is where the clothes are. A representative from luxury branding from BETC Luxe mentioned that clothing is understood to be an actual loss for most luxury brands.

Most fashion labels historically produced two main collections: spring/summer and autumn/winter. A department store had four major selling seasons. A mass-market retailer such as Gaps updated their color scheme throughout the year, but focused on seasonal output.

Forever 21 is infamous for ripping off fashion designers. US Copyright law does not protect fashion design, only fabric prints and jewelry. the copyright office has always said very consistently that clothing is just functional and therefore can’t be copyrighted. One of the reason is that US is a manufacturing hub and Europe is designers hub. Both H&M (Swedish), Zara (Spain) are almost following the same style but with a spine on designer styles as opposed to doing direct copies like Forever 21 is doing. The reason is that they are from Europe and hence bound to copy-protected laws. For example, Zara sells very similar takes on designer’s signature pieces such as Prada’s striped sombrero from its 2011 collections. Zara’s version was black and white instead of neon colored.  The original silk tuxedo shirt would cost around  $990 and Zara sells it for 90 percent less. Both H&M and Zara has limited in-house designers, but Forever 21 does not have any designers. Mrs. Chang (owner of Forever 21) will go shopping all over the world, circle things in magazines, buy samples and take pictures and then handover her research to her buying team to find a vendor who can produce replica.

“We know they copy the runaway, but nobody talks about how they bluntly copy everything vintage”, Brooklyn based vintage dealer Sara Bereket says. One customer bought a ‘70s cashmere sweater by Calvin Klein from Bereket stall and then admitted she was shipping it to China the next day to be replicated. Vintage designs are in the public domain and can be freely copied. ‘90s floral dresses and tops as well as jumpsuits from the 1980s, all hot sellers in regular retailers at the moment. ‘What styles did we have from the 2000s era? Low Pants? Other than that, it was all copied from the past.”

In 1904 German sociologist Georg Simmel wrote a landmark article, ‘Fashion. In it, he laid out a very clear view on how price and the pace of fashion are tied. “The more an article becomes subject to rapid changes of fashion, the greater the demand for cheap products of its kind”. Today, it is very difficult to convince the average consumer to buy clothing at reasonable price, and fast fashion gets around this conundrum by selling a treadmill of fresh trends for cheap. But in their race to sell new products, they speed up the pace of fashion, which in turn makes the average consumer even cheaper.

Customers uses these fast fashion dress and drop them off at Salvation Army bins after using it for two or three times. These less used dresses resold as second hand stuff in many thrift shops around US. After keeping it for few weeks, it will be exported to sell it in other countries.

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