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Luxury fashion insiders look?

Fashion Fan

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Can someone with some indiser knowledge or industry knowledge give me an inside scoop on the industry. I'm very curious to see what the mark up is for example on a pair of Gucci shoes or a suit. I've heard many rumors that some luxury products are mostly made in China and tags are put on in Italy. Is this false, true? Any insight woudl be great.
 

FLW

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I wouldn't qualify as an insider, but it is fairly widely held that some products are largely made abroad and then assembled in Italy (final stitches, buttons added, etc.) so that a Made in Italy tag can be attached. Even Allen Edmonds does this with its Made in the USA products to a certain extent. The more "fashion-y" the label the more likely this becomes. Luxe names like Kiton and Brioni don't do this, but Prada and the like are usually more suspect. See the book "Gomorrah" for more insight into the shady side of Italian clothing production.

As for mark-up, retail is at least double the cost of wholesale and at least 5-7x the cost of raw materials. Again, the more flash the label, the higher the markup.
 
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Fashion Fan

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951socal

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Thanks for the article, it was a good read. It's pretty crazy how they say one bag could cost $20 dolalrs to make and be sitting next to another one that costs $400 to make and they both bear $1500+ price tags. I guess even in luxury fashion it all comes down to greed and profits.


its not really greed its just industry. fashion isn't that bad, apart from destroying clothes but thats vital to brand integrity/marketing.

whats really bad is the markup on grocery food items
 

Fashion Fan

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I wouldn't qualify as an insider, but it is fairly widely held that some products are largely made abroad and then assembled in Italy (final stitches, buttons added, etc.) so that a Made in Italy tag can be attached. Even Allen Edmonds does this with its Made in the USA products to a certain extent. The more "fashion-y" the label the more likely this becomes. Luxe names like Kiton and Brioni don't do this, but Prada and the like are usually more suspect. See the book "Gomorrah" for more insight into the shady side of Italian clothing production.
As for mark-up, retail is at least double the cost of wholesale and at least 5-7x the cost of raw materials. Again, the more flash the label, the higher the markup.

Interesting. Is there a way of determining whether a product has parts of it made overseas and other finishing parts in Italy? I guess you mention it in your post but I was thinking more of a list online of retails that make 100% italian vs those that onyl make 20-30% Italian made clothes.
 

Fashion Fan

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its not really greed its just industry. fashion isn't that bad, apart from destroying clothes but thats vital to brand integrity/marketing.
whats really bad is the markup on grocery food items

Sarcasm?

I read in a article the owner of LVMH said the luxury market is the only place where you can make luxury profit margins.
 
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MikeDT

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its not really greed its just industry. fashion isn't that bad, apart from destroying clothes but thats vital to brand integrity/marketing.


Doesn't do much for their brand integrity/marketing if they're found out though.
http://www.wpix.com/news/wpix-hm-shredding-clothes,0,5633985.story
http://consumerist.com/2010/03/eddie-bauer-outlet-cuts-up-unsold-clothing-throws-it-away.html
http://inhabitat.com/priscilla-of-boston-destroys-unsold-wedding-dressing-instead-of-donating-them/
http://www.bbc.co.uk/news/business-11284968

Fortunately some companies are more ethical now, given the bad publicity that destroying good clothes can attract.
 

MikeDT

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Can someone with some indiser knowledge or industry knowledge give me an inside scoop on the industry. I'm very curious to see what the mark up is for example on  a pair of Gucci shoes or a suit. I've heard many rumors that some luxury products are mostly made in China and tags are put on in Italy.  Is this false, true? Any insight woudl be great.


I bet many of them are sent back to China to be sold at a very handsome profit. Many of the lux brands really are charging top-dollar for their "Made in China" products in places like Beijing and Shanghai. It's just corporate greed.
 
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951socal

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Sarcasm?

I read in a article the owner of LVMH said the luxury market is the only place where you can make luxury profit margins.


nope not sarcasm, food prices are HIGH. the markup is sometimes up to 600%. most entry level managers are pulling in 70-100k
these guys aren't college educated, they just moved up after 10 or so years
 

Blackhood

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I would consider 500% mark up to be about right. I've worked for low-tier fashion chains where a suit that retailed at £500 had an actual costs of more like £60, including all overheads(staff, rent etc). Luxury stuff? Assume it costs about 10-20% of retail.
 

mjjo

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Corporate greed indeed. C'mon I think everyone's aware that when it comes to manufacturing clothes top brands rely on China and other Asian countries for manpower then sell their luxe products for more than they ever paid those countries.
 

connor09

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Everything seems to be made in China these days!
 

MikeDT

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Everything seems to be made in China these days!


Hell even my house and everything and everyone around me seems to be made in China.
 

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