DeepSummary
In this podcast episode, Lauren Sherman interviews Elizabeth von der Goltz, a fashion industry insider who has worked for various luxury brands and retailers. They discuss the reasons behind the high prices of luxury fashion items and how pricing strategies work in the industry. Elizabeth explains factors like the cost of raw materials, production runs, marketing expenses, and the desire for exclusivity that contribute to luxury brands' pricing.
Elizabeth shares her experience working at companies like Barneys, Bergdorf Goodman, and Net-a-Porter, where she was involved in the pricing process. She provides insights into the markup and profit margins at different levels of the supply chain, from wholesale to retail. They also touch on the recent price increases in the luxury market, driven by factors such as supply chain disruptions and the need for brands to maintain an exclusive image.
The conversation delves into the divide between high-end and low-end fashion, with Elizabeth expressing concern over the unsustainably low prices of fast fashion brands. They discuss the potential for more localized production and automation to address this issue. Overall, the episode offers a behind-the-scenes look at the pricing strategies of luxury fashion brands and how they navigate the balance between profitability and maintaining exclusivity.
Key Episodes Takeaways
- Luxury fashion brands are raising prices due to increased production costs, supply chain disruptions, and a desire for exclusivity.
- Markups and profit margins vary at different levels of the supply chain, from wholesale to retail, and are generally higher for luxury brands.
- Smaller production runs for high-end designers can contribute to higher pricing due to higher per-unit costs.
- Raw material costs, such as cashmere and leather, can fluctuate based on supply and demand, impacting pricing.
- Luxury brands may need to introduce more accessible entry-level products to attract new customers in the face of rising prices.
- The divide between high-end and low-end fashion pricing is widening, with concerns about the sustainability of fast fashion's low prices.
- Localized production and automation could potentially address the unsustainably low prices of fast fashion.
- Brands employ pricing strategies based on their desired positioning and perception in the market.
Top Episodes Quotes
- “When you look at all these businesses, any business that remains flat or has any increase, it's purely off the increased prices. It's not increased units that they're selling.“ by Elizabeth von der Goltz
- “I think you always need something to bring you in at a lower price point. And so that's the challenge that's gonna happen now.“ by Elizabeth von der Goltz
- “There's a point sometimes where it's literally a supply and demand, right? So I don't know if you ever did this, but, like, there was a point where cashmere pricing just. Or cotton, like, just the pure goods materials shot up because. Because the middle class in China became so big, because the economy there boomed, you know, as you know, over, like, the past ten years, and there just wasn't enough cashmere.“ by Elizabeth von der Goltz
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Episode Information
Fashion People
Audacy | Puck
4/26/24