WSJ: How Can Jeans Cost $300?

Discussion in 'Streetwear and Denim' started by randomkoreandude, Jul 7, 2011.

  1. pickpackpockpuck

    pickpackpockpuck Senior member

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    ^^The numbers make sense. It costs $56.06 to manufacture the garment (without overhead), and they sell it to the retailer for $160. The retailer needs to make money, which includes covering their overhead costs, so they buy the garment for $160, then sell it for $325 or whatever [insert your own Blackbird markup joke here]. So it only cost $56 to make but it's sold to the consumer for $325.

    But like AR_Six pointed out, without the cost of overhead figured in these numbers are essentially meaningless. From this scenario it sounds like the manufacturer is making just over $100 on each pair of jeans, but if their overhead (cost of rent on their offices and stores, utilities, etc.) is high then some, possibly even most, of that dollar amount could be going to cover those costs. There's no way to know how much they actually walk away with. Same goes for the retailer.
     


  2. brad-t

    brad-t Bae Blade

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    best response:

    They sell $300 jeans at Banana Republic?
     


  3. Cool The Kid

    Cool The Kid Senior member

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    What's the typical mark-up in fashion? In the food industry, typical is 500% over raw cost. To the outside observer, that may seem like a "rip-off", but frankly, it's just barely enough to make it worth my time. I gotta eat, too, fuckers.
    Food doesn't cook itself doe

    I [​IMG]'d at this

    I will be upset if Ferrari DOESN'T sue for libel
     


  4. mickey711

    mickey711 Senior member

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    Wow. People who read WSJ online and take the time to comment are some angry mofos. I could feel my blood pressure rising just reading their anger.
    It's no worse than some other publications' comment sections, such as the Economist's and Foreign Policy's. One of the things I like about the FT is that most articles don't have such sections and the ones that do usually have intelligent, knowledgeable participants. And there was also a pretty long thread on this topic: http://www.styleforum.net/showthread.php?t=178401
     


  5. brad-t

    brad-t Bae Blade

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  6. habitant

    habitant Senior member

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    Generally, producers don't make the money. It's the middle man (store) that gets the most for the least amount of work.
     


  7. DLester

    DLester Senior member

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    I think the takeaway here is that there is an obscene amount of money to be made if you have a successful brand.

    I believe the only way to make an obscene amount of money in fashion is to sell expensive bags to wealthy Asians. I don't know how any other fashion business model survives. Seems like a brutal business.

    Wow. People who read WSJ online and take the time to comment are some angry mofos.

    I could feel my blood pressure rising just reading their anger.


    Most of the commenters on online articles are sour, beaten losers. The Seattle Times had an article about the opening of a new city park, and all the comments were extremely negative. What kind of person hates parks?

    I love trolling the hell out of those comments.
     


  8. entrero

    entrero Senior member

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    What about +$1000 jeans like Balmain? I think fashion math would fail to explain that.
     


  9. AR_Six

    AR_Six "Sookie!"

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    their overhead (cost of rent on their offices and stores, utilities, etc.)
    Fuck all that standard "overhead" stuff, how about staff? Transport costs? How about the vast sums of money it takes to market a luxury product? How about the fact that the company has established some goodwill (deserved or not) and is entitled to factor that added value into the price of their product? Once you factor all that crap in it becomes pretty surprising that there's any margin left at all.
     


  10. pickpackpockpuck

    pickpackpockpuck Senior member

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    ^Yeah, exactly. And when you're talking about brands like Balmain you're paying for design, too (which is part of that "good will"). It has to be worth something to have clothing designed by a house like that vs. Lucky Brand Jeans or whatever.

    In general this makes me think of how a while back my wife made home-made croissants. It took her all day and was incredibly labor intensive. The next time I walked into a bakery and saw a croissant for $2.50, I was baffled at how they could charge just $2.50 for a croissant and make any money. Before that I wondered why a croissant cost so much.
     


  11. Biggskip

    Biggskip Senior member

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    ^Correct, though if I'm not mistaken, their math is off by $1 ($56.06 should be the cost based on their numbers.) Their graphic should have been clearer.
    Oddly enough, the correct number is used in the print edition.

    What I found totally ridiculous was that the guy from J Brands said that if he moved production to China that the retail cost would fall from $300 to $40.
     


  12. iTylerStewart

    iTylerStewart Active Member

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    LOL @ true religion jumping ship to 'classy' selvage denim

    This hahahahahaha
     


  13. LA Guy

    LA Guy Opposite Santa Staff Member Admin Moderator

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    What's the typical mark-up in fashion? In the food industry, typical is 500% over raw cost. To the outside observer, that may seem like a "rip-off", but frankly, it's just barely enough to make it worth my time. I gotta eat, too, fuckers.

    500-1000% over materials and make, depending on the piece and the designer, is range I hear most.

    I believe the only way to make an obscene amount of money in fashion is to sell expensive bags to wealthy Asians. I don't know how any other fashion business model survives. Seems like a brutal business.

    Pretty brutal.

    With the huge marketing spends, maintenance for a high end boutique, rents in desirable locations, etc...

    What about +$1000 jeans like Balmain? I think fashion math would fail to explain that.

    Overhead, overhead, overhead. PR, PR, PR. Doesn't pay for itself.
     


  14. Mauro

    Mauro Senior member Affiliate Vendor

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    Just think if the jean was made in the U.S.
    CMT is 25-to 45 per jean.


    Uncontrol is right. Pretty funny thread.
     


  15. mr.orange

    mr.orange Senior member

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    yeah that JBrand comment really turns me off because I was planning on buying a pair next week. Now I feel like I'm getting ripped off...[​IMG]
     


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