the denim bubble has burst: NYT.com

[blm14]

Figured this deserved its own thread. I find this personally sad because I used to make grips of cash reselling jeans that retailed for $350 by getting then at $80 on sale and selling on ebay for $160, but o well. Some interesting bits in there about evisu, too....

http://www.nytimes.com/2009/10/29/fashion/29JEANS.html?_r=1

October 29, 2009

Preshrunk Prices

By ERIC WILSON

THE $300 pair of designer jeans is now, courtesy of the recession, the $200 pair of designer jeans.

“It was all just a fad,†said Jeff Rudes, a founder of the hot-denim-label-du-jour J Brand Jeans and an astute observer of the suspiciously inflated prices of fashion’s most eternally reinvented staple. Like any commodity that becomes overpriced, there eventually comes a market correction. And denim’s day of reckoning was long overdue.

“The floors at most of the major stores were so overassorted that they almost looked like Loehmann’s,†Mr. Rudes said. “They were just cramming jeans onto the racks.â€

The introduction of $300 jeans — perhaps even more than $1,000 coin purses and $500 plastic sunglasses — marked the moment when customers really began to question the prices they were seeing in department stores. Cotton dungarees for the price of an iPod was a stretch so extreme that retailers had to come up with a whole new term to suggest that the new jeans were different from the $100 jeans they used to sell in the 1990s.

So, early in the decade designer jeans became “premium†jeans — as in, you had to pay a premium to wear them: $340 for Acne jeans, $350 for Ksubi jeans, $359 for True Religion jeans, $395 for Notify jeans, $580 for Dior jeans and so on. Before the recession, premium denim was one of the fastest growing categories of the apparel business, and there seemed to be no limit to what customers would pay for the latest label, fit, finish, wash or whatever Paris Hilton wore.

But the denim bubble has burst, and only a handful of such extravagantly priced jeans remain at the jeans bar — labels like PRPS and 45rpm, which, in tacit acknowledgment of the decline of the premium business, are now more often referred to as “artisanal†jeans. Meanwhile, the sweet spot for designer jeans has relocated to a neighborhood just below $200, even though the styles do not look substantially different from the $300 jeans that were on the sales floors of Barneys New York and Bloomingdale’s only two years ago.

“The key price is under $200 now,†said Eric Jennings, the men’s fashion director at Saks Fifth Avenue. “The superexpensive stuff is not performing as well.â€

Despite all this tumult, designer denim is still one of the few bright spots of the apparel industry. Annual sales of all women’s jeans were actually up 5 percent over last year to $8.2 billion through August, though average prices were down 1 percent, according to the research firm NPD — the pricing shift is reflective of a broader reset taking place in luxury stores.

During the modern gilded age, the spiraling prices of designer clothes had more to do with driving profits than the actual design or construction of a garment. Designers found they could charge a lot for the perception of prestige. Dresses and suits and handbags were priced like cars, and consumers didn’t blink. But with jeans, it just felt more obvious that some kind of game was being played; the basic elements, after all, had not changed substantially in decades: five pockets, cotton, some rivets.

Now designers are facing pressure from stores and from their competitors to rethink prices, in many cases resulting in less expensive jeans or more styles at the lower end of each designer’s range. It has not gone unnoticed by executives behind the great denim rush of 2005 that even mainstream retailers like Gap and J. Crew have caught on to the appeal of Japanese denim, whisker treatments and fading details, and that they are now produce comparable premium-look jeans that cost around $60. Banana Republic has a new denim line coming in January.

“Charging $600 for jeans for no reason at all — those days are over,†said You Nguyen, the senior vice president of women’s merchandising and design for Levi Strauss & Company.

Diesel, the Italian jeans company that pioneered the three-figure category, used to produce only two styles at its lowest price of $150 for men, $160 for women. This season there are 10, said Renzo Rosso, the label’s founder, “because the market demanded more product at this level.â€

Rock & Republic, another popular label, introduced a Recession Collection this spring with styles under $140, about $40 less than before. Ksubi, the maker of $280 skintight jeans, is now producing less expensive styles for stores in the United Kingdom and Australia. And Citizens of Humanity found it could entice retailers with a new style for $148, about 10 percent lower than its previous entry point.

“Below that, it is no longer premium,†said Gary Freedman, the company’s chief operating officer.

But that distinction seemed arbitrary before, and the broad pricing retrenchment suggests that there was nothing so premium about last year’s jeans except the profits. The retail price of most designer jeans is calculated by multiplying the wholesale cost by 2.2. A pair of jeans that costs $158 at Saks, for example, was sold to the store for $72.

While that is a typical markup for designer fashion, the actual costs of producing jeans are much lower, and so for many years it was considered a lucrative field for start-ups. In the early part of the decade, there were more than 40 start-ups. But many of those labels, once the next big things, are but memories. Remember Blue Cult? Antique Denim? Paper Denim & Cloth?

“Five years ago, it was easy to start a jeans company,†said Scott Morrison, one of the original founders of Paper Denim & Cloth in 1999 and later a founder of Earnest Sewn, who joined Evisu in May as its chief executive. “You basically have a market that is the fastest growing segment in the apparel business, and stores are overbuying because of it.â€

Evisu is a good example. The brand, when it started in Japan in 1991, was so exclusive that only a few dozen pairs of jeans, priced at $600, were produced each week, each with a hand-painted seagull logo on the back pocket. But the label’s popularity soon led to a global licensing agreement to produce runway collections in Italy and increasingly baggy and flashy street-wear styles that, while generating $30 million in sales, devalued the brand to the point that no designer store would touch it.

Mr. Morrison said the label has been losing money for the last four years. His strategy is to revive Evisu by starting over, with a handful of clean, unadulterated styles that will be sold at Barneys beginning in November. Many of them under $200.

But prices are not the only thing that has changed since the recession. The jeans business is just not the same without the swagger.

“You have the underpinnings of a disaster if people can’t turn this around,†Mr. Morrison said.

Of course, people will turn denim around and around and around, lately as skinny jeans or boyfriend jeans and even more recently as jeans so skinny they are called “jeggings.â€

Mr. Rosso of Diesel also sensed it is time for a change. Last week, he met with his team of designers to give them a challenge, he said, to reinvent denim in a “younger way, a fresher way.â€

“It’s been too many years that we’ve just looked at wash, and the time is now to make an evolution,†Mr. Rosso said. “Denim is the only fabric you really can transform.â€

[FACE]

good

10char

[eddyz]

thats why N&F are doing so well compared to PRPS and 45rpm

[Hendodo]

i wonder if other jap brand jeans will start pricing lower too..

[suicide]

Thanks for posting this.

Seems like it would only apply to a handful of brands that SuFu has any interest in, though. I don't foresee Skull or Flat Head lowering prices and trying to reorient their brands, since (in the west, anyway) only a handful of enthusiasts have interest in them anyway.

I'd really like to hear Kiya's thoughts on this article.

[geneticdrifter]

great article, thanks.

so how long till levi's brings back selvedge? i say one year at the most.

[FACE]

Thanks for posting this.

Seems like it would only apply to a handful of brands that SuFu has any interest in, though. I don't foresee Skull or Flat Head lowering prices and trying to reorient their brands, since (in the west, anyway) only a handful of enthusiasts have interest in them anyway.

I'd really like to hear Kiya's thoughts on this article.

"these n***a's fuckin up my cash flow dawg"-Kiya

[Stacks]

no no no, that article is about their 300 dollar jeans, not our 300 dollar jeans.

it's totally different, you see.

[rnrswitch]

45RPM shouldn't even be mentioned under designer jeans. I think people who buy jeans for quality rather than style will just limit their amount of purchases rather than buy cheaper versions.

So instead of buying one pair of jeans @ $300 every 8 months I will buy 1 pair every year or so.

[dralfonzo]

yeah i think many of the brands that lower prices will be almost admitting that they were probably taking a pretty greedy profit margin maybe, and that the actual raw material + production cost was not enough to justfity what they were previously charging. On the same note, the brands like 45rpm who dont drop their prices are almost reinforcing the point now that their jeans are better made and of better quality than the other brands.

saying that I could be completely fucking wrong.

[dawei69]

no no no, that article is about their 300 dollar jeans, not our 300 dollar jeans.

it's totally different, you see.

SECONDED!!!

[salaami]

^ yeah, the shit they are talking about is stuff that if shit was real should sell for less than $100 a pair. i havent bought a jean from BiG or t5 yet that i felt was a ripoff.

[rnrswitch]

Nevertheless, Japanese selvedge denim is turning into the True Religions of two years ago and as long as it becomes more and more hype we will see an increase in prices that are not related to quality and craftsmanship, but more to demand.

[A Beard of Stars]

Are the Japanese repro brands becoming the new TRs, or are streetwear brands' Japanese-branded jeans becoming the new TRs?

[jdmcnary]

great article...thx

[artificialsky]

This article is about three years too late.

[setterman]

great article, thanks.

so how long till levi's brings back selvedge? i say one year at the most.

They already have in their "premium" 501s. There's two "501 Original Jeans" on their USA website. Both are dark, but have been washed. One is "Chipped Rigid" and the other is "Resin Rinse", though I don't really see any difference between the two. May pick up a pair for my girlfriend for Christmas.

[kaysmash]

no no no, that article is about their 300 dollar jeans, not our 300 dollar jeans.

it's totally different, you see.

Agree!

great post! ive started noticing that designer brand jeans were getting ridiculously overpriced while the quality stayed somewhat the same. People are overhyping brand names like True Religion and Rock & Republic in my area and its a shame.

[Pi-tol]

Maybe this will make all companies step their fucking game up if they want to charge a arm and a leg for some denim. And lets just hope that the next trend will not be Japanese brands!

[bestie]

pretty interesting read...

i really don't see the bubble "bursting" but perhaps slightly deflating as the article mentions some 10% price drops which is barely anything (~$30 off flatheads? basically pays for hemming)

we are definitely paying for quality/craftmanship/etc but only to a certain point; after said point its pure profit + retail's cut. its definitely possible to decrease the inflated profit from retailers but they wont be happy... cutting corners to save money and getting back to the correct profit margin seems very likely.

however i don't even see the niche brands here even being affected, honestly. money dont phase us, fuck em

[kiya]

This article is so beyond dated... and has nothing to do with the brands we consider to be "high end" from Japan. This thing is talking about Tsubi, Paper Denim (which i thought already went under), PRPS, Evisu, and 45RPM (which i think they only included because they have NYC shops and sell a few models that are $500+).

Media loves to print this exact article every year or two, i swear if you dig you'll find an almost identical write-up already published a year ago and another three years ago.

I know the LA Times had one late last year.

[LC_Miey]

Media loves to print this exact article every year or two

quoted for truth.

[blm14]

kiya you should write in an op-ed letter about it