Today’s Truth Plus: Sky-High Shoes
March 26, 2012 § 2 Comments
Malkemus thinks much of the rising-price trend is owed to the basic capitalist idea of pushing the market to what it will bear — which is not necessarily a wise move, in his opinion. “When a young lady says to me, “I went shopping for shoes and the average pirce point was $900 — $900 used to be a coat, ” says Malkemus. “I think that people may have taken advantage of the notion that ‘It’s all about accessories right now.” When [designer] ready-to-wear priced itself out of the realm of most consumers, shoes and bags were still affordable. Now, what’s happened is the shoe people and the bag people sort of lost control of that, and they are scaring off a certain consumer.” (Iredale, WWD Accessories, 3/26/12)
In the middle of today’s WWD Accessories special issue, which is chock-full of images of luxury handbags and shoes, there’s an unexpected and delightfully Truth Plus-esque piece that questions the new $600-plus price norm for designer shoes. I remember when spending $150 to $200 for a pair of contemporary shoes felt like a real splurge, and that Manolo Blahniks used to cost a shocking $395. Now, you’d be more apt to see a pair of Chinese-made shoes at Macy’s for $150 and a pair of contemporary sandals for $395. As people’s salaries have remained static, reduced or have disappeared altogether, luxury shoe brands have rather brazenly continued to hike up the prices of their products. When I read that $1900 booties are being snapped up in a flash or an ‘It Bag’ sells out by pre-order in record time, I can only think that it’s the true 1% who is able to afford these items. Yes, an aspirational customer can save his or her pennies and buy one good thing as an investment. But there’s no way, I don’t think, that they can make multiple purchases of $700 shoes in one season.
So why have prices gone up? Designer shoes, as Malkemus explains, are most often produced in Italy. In past years, the dollar had lost quite a bit of value against the Euro, and US customers ended up with higher retail prices as a result. Raw material prices, Malkemus says, have increased 30-40% in the past year and half alone. As the prices of the most high-end shoes have gone up, the market has created new norms for prices at all quality levels to accord to the top tier’s price setting. But as the Euro-Dollar currency conversion has recently evened out, shouldn’t shoe prices in the US decrease some across the board?
Malkemus’ above quote says a lot about why prices haven’t and perhaps won’t drop. The average aspirational customer, who began her luxury education/fascination with Carrie Bradshaw’s Fendi Baguette, has become an accessories-focused consumer who might buy fast-fashion clothing and pair it with with $700 shoes. Malkemus is right that high-end and contemporary clothing pushed away many average customers, and H and M and Zara have capitalized on that shift. Bags, shoes and sunglasses have been marketed as more enduring, versatile purchases. Plus, there’s no way, unless a person is wearing a recognizable Prada print, to know that he or she is for certain wearing a $1200 skirt. A luxury shoe or handbag has become a more easily attainable status symbol than say, a luxury car or a home in a wealthy town. Still, I’m not sure how Hermes is rushing to keep up with production of $25,000 Birkin bags, but I digress.
I’ll be curious to see what limit luxury accessories brands will push consumers to before their current pricing strategy ceases to work. As I work on my own line, I see how expensive it is to work with European fabrics and manufacturers, but I’m trying not to hand those costs on to my customer when we launch, or worse yet to exploit my customer by charging far more than the cost of producing the good.