Thursday, July 14, 2011

Jeans Cost How Much {you don't say?}

"Thanks!" to J.Crew Guy In Canada who shared a really interesting article from the Wall Street Journal (click here to read in its entirety) about the true costs of jeans:
How Can Jeans Cost $300?
Shoppers Shell Out More for Designer Denim, Lured by Signature Details, 'Made in America'

By Christina Binkley
July 7, 2011

It is an enduring mystery to anyone reared on $50 Levi's: How can a pair of jeans cost as much as the Phantom, the new look from True Religion that will be priced as high as $375? ...

This is a rarefied segment of the denim business. Americans bought $13.8 billion of men's and women's jeans in the year ended April 30, according to market-research firm NPD Group. But only about 1% of jeans sold in the U.S. over that year cost more than $50.

The prices of "premium" jeans—industry jargon for luxury-priced denim—appear to be edging slightly upward after a downturn following the financial crisis. Right now, J Brand's Maria women's jeans can sell for $226. Men's Aidan jeans from Seven For All Mankind cost $225. Prices for Gucci jeans range from $495 to $665. Premium jeans are made in the U.S., which is a big part of their allure.

...It costs about $50 to make a pair of Super T jeans, True Religion's best-selling style with oversized white stitching, estimates founder, chairman and chief executive, Jeff Lubell. The wholesale price is $152, he says, and the average retail price is $335. Of course, plenty of these jeans sell at substantially less than full price.

...As with all fashion, a big part of the price of luxury denim is in the multiple profit margins taken at each level of production. Most any piece of clothing contains parts and services from potentially dozens of providers: from fabric and button makers, to designers and seamstresses, and wholesalers and sales agents. After all this, designers and retailers say the typical retail markup on all fashion items, including jeans, ranges from 2.2 to 2.6 times cost.

In the luxury business, those mark-ups cover huge marketing budgets (someone has to pay for giant billboards and ads in fashion magazines) as well as the costs of running stores, headquarters, shipping, and other overhead.

The profit margins on premium jeans can be substantial. Mr. Geliebter says his gross profit margin for private-label jeans, which he makes for Wal-Mart Stores Inc., Sears Holdings Corp. and other retailers, are less than 20%, whereas the margins for his own premium lines are 40%-to-50%.

It seemed a few years ago that the high end of the denim business was doomed, with the financial crisis killing many consumers' appetites for expensive jeans. Premium-denim makers cut back on styling and details, and cut prices in many cases to under $200. Manufacturers hit a price floor at around $150, mainly because premium denim is manufactured primarily in the U.S., which can't compete China and other nations with low labor costs.

Beyond the rise, or waistband height, and leg silhouette—bootleg, skinny, or cigarette—the details that make jeans brands stand out are often on the pockets. J Brand's pockets are unadorned, while True Religion is known for its highly stylized pockets with swirly embroidery.

Jeans brands also try to stand out from season to season by using patented materials, such as rivets and stitching, and by using special washes and distressing methods. These might involve dying, pressing, and even using sandpaper and drills on the raw jeans. These methods can be particularly expensive when done in the U.S., where factories must meet more stringent environmental and labor standards than in many low-cost nations.

Most premium jeans' cotton denim fabric comes from the primary maker of high-end denim fabric used in the U.S. and Europe: Greensboro, N.C.-based Cone Denim, a unit of the International Textile Group. There, in a plant known as White Oak, shuttle looms dating from the 1950s weave the denim fabric that winds up in many premium denim brands, including J Brand. The looms are older, narrower, and slower than highly efficient modern looms, but they weave fabric with slight irregularities known as slubs, which impart a texture and character that modern looms lack.

...The Cone fabrics are shipped by truck or train to Los Angeles, where denim brands cut and sew them to their designs. Each part and bit of labor may ultimately be marked up five times or more before the pants reach retail stores. So the $23.30 spent for a Los Angeles-based seamstress to sew a pair of Super Ts will cost the consumer more than $100 at full price. Other notable costs include roughly $10 worth of fabric (1.8 yards a pair, on average), 44 cents for pocket linings, 37 cents for a zipper, and $2 for the embroidery on a back pocket. Washes for coloring and fading may be done in Los Angeles or, sometimes, at mills in Mexico.

To be produced domestically, jeans have to be priced at "$200-plus," says Shelda Hartwell-Hale, a vice president at Directives West, an L.A.-based division of fashion consulting firm Doneger Group.

Jeans makers say that manufacturing in the U.S., in addition to appealing to consumers, allows them to move quickly. ...Mr. Rudes says it typically takes his company six to eight weeks to make a pair of jeans in the U.S., compared with three to six months in China.

True Religion is one of the industry's giants, making 4 million units of clothing a year. He estimates that his $300 jeans could sell for $40 if he manufactured in China.

Still, Mr. Lubell has caved when it comes to jackets, the cutting and styling of which is more complex than pants. He makes them in Mexico, where costs are higher than in Asia, but less than in the U.S. The jackets retail for about $375. "If I made them here," he says, "they would be about $600."
Pretty interesting read! Especially the image used to illustrate the production costs for one company's jeans.

What are your thoughts on the article? Do you notice the difference between premium jeans and other kinds of jeans? If so, please share! :)

14 comments:

  1. I have a lot of thoughts on designer denim, vanity, and pricing, but mainly ...

    I LOVE made in AMERICA!!!!!!! Support AMERICAN industry :>

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  2. Very interesting article. To play devil's advocate, think if all clothes were made in America and you were paying $200 for something that would be $40 made in China, how much smaller of a wardrobe you would be able to afford. I know we all balk when we see the high prices stores (incl. JC) are asking for certain items...

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  3. Very interesting. I do love to buy things made in America!!! The best part is... you can often find premium denim at discount stores like TJ Maxx, Nordstrom Rack, etc. I have never paid more than $50 for Seven/Joes/J Brand/TR jeans. Best of both worlds!

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  4. @Cass:

    BUT, if the things Made in America were of high quality and in lasting styles (a pair of straight leg blue jeans can be versatile for years, I think), I would be willing to pay more, and buy less clothing, knowing I could wear what I had bought for a good long while.

    Most of us have wardrobes much larger than we actually need, I think.

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  5. I do pay the extra for "premium" denim because the quality of the denim and the design/fit is discernibly better than cheaper brands. Plus, as Pathos said, it's good to support American industry!

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  6. I like my premium denim and think it is worth the money. I happily do pay more for garments made locally if the quality is there. I prefer fewer items of higher quality than a closet full of cheap, disposable clothing.

    BTW, my husband has a couple pair of J.Crew jeans that were made in Canada. There is quite a busy garment industry here and stores like Tristan have complete lines of Canadian-made clothing and occasionally offer promotions on those items. I think that is pretty cool. Would love to see other retailers do the same to promote local goods.

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  7. Never bought a pair of premium denim and have no plans to ever. I have jeans in my closet that have been there for years and are well made, fit great and I have never spent big bucks. There are so many brands and styles and jeans out there that good quality can be found without breaking the bank; higher prices does not equal better quality IMO:)

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  8. I have been purchasing premium denim for years and have had mixed feelings about it. Joes jeans are the way to go for me, but I always end up ripping them one way or another. The denim gets really thin in the crotch area after a couple of years...and then they just give. If I could find a pair good jeans that were high waisted and had extra room for a curvy figure I would switch. Until that time I continue with Joes. At least there is a Joes Jeans outlet in Camarillo, CA so I get them for no more than $120.

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  9. I have always gotten all my JCrew jeans on super sale for $12-29. Never paid more:)for a pair of jeans.

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  10. Stene,

    Try Levi's demi curve jeans. I never thought I'd find a pair of jeans that would fit over my bottom and hug my waist (because I'm quite slim in the waist) but Levi's are amazing. Even if the demi curve doesn't work for you, the bold or supreme might. I was sick of searching high and low for jeans that fit me well and didn't cost a mint and had so much stretch they would wear out quickly so I went to a Levi's store and tried on jeans until I found the perfect pair. They stretch so don't be afraid to buy them tight and wear them until they give. For 59.50, it's money well spent.

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  11. What I find interesting is that they actually make more profits over time because their production model is also faster than if they moved it overseas. I guess you learn new things everyday!

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  12. I'm absolutely not criticizing those of you who are purchasing these jeans, but I will say that I'm so glad I'm not into them. I rarely wear jeans and when I do Levis suffice.

    How do you take care of your expensive denim? I'd have a hard time tossing a pair of $300 jeans into the washing machine!

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  13. Nice post you have shared. Denim jeans are today's fashion trend every man wears these denim jeans and wants to buy these from the best brands. Many popular fashion brands are selling these jeans. I recommend The Regulars Inc online store, which provides a wide and exciting range of hoodies, types of denim, and tees at a great price.

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