FROM OUR JANUARY ISSUE: HOW MUCH IS TOO MUCH?

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Ticket prices on luxury goods seem to have risen out of control these past few years. According to a recent article in The New York Times, average luxury prices are up 25 percent since 2019. In luxury menswear, it seems the increases are even more dramatic. When one luxury clothing brand was asked last season why they raised prices so dramatically, the response was, “Because we can.” More recently, a major luxury maker sent out letters to their specialty accounts, dictating the dollar increase in fall ’24 orders they expect from each store, as well as how these dollars should be allocated by category.

Here, MR asks menswear merchants if their customers are holding back or trading down due to sticker shock. And if so, how are store owners dealing with this situation?

STUART SEGEL, MR. SID, BOSTON AND NEWTON, MA
I’m hopeful that prices will hold where they are. We’ve seen substantial cost increases the last few seasons and I believe the market is reacting. We’ve heard from clients, and many have “had enough.” They don’t necessarily trade down but they buy fewer units.

Price increases are primarily a result of market pressures. The labor market, after the pandemic, has been a major factor in inflation and I believe has affected the luxury market in particular. Consolidation is another factor and will continue to be a concern. Positioning a brand as “luxury” without offering value-added ingredients is a dangerous proposition. Eventually, the consumer will catch on.

LARRY DAVIDSON, DAVIDSON’S, ROANOKE, VA
Instead of significant price increases, we’ve offered fewer and smaller markdowns on our promotions and incentives. We’ve also started later and shortened our end-of-season clearance events. We’ve introduced new luxury and fashion items to test the limits of how our clients will respond at the top end.

There’s no question that we’ve enjoyed a wonderful stretch of business over the last few years, however, I’m cautious about the near future. Wardrobes have been replaced and some of the excess cash has been spent (or will be spent) on experiences rather than clothing. Not to mention the headwinds produced by the next election cycle, the continuing level of immigration, and ethnic issues on multiple war fronts.

ANONYMOUS RETAILER:

The price increase issue has hit a sore spot with me as the biggest culprit is my largest vendor. They seem emboldened by the increase in business in their own stores, giving them the attitude that if we want their brand, we’ll have to pay the price. A sneaker that sold for $650 or cashmere overshirt for $1795 has gone up 40 percent in 2.5 years “because they can.” On top of that, we’ve been given budget expectations broken down by category. Fortunately, with prices accelerating, we can meet their requests with minimal unit increases, but without knowing if the collection will answer our needs for the season. I believe it’s even more important than ever to cover the abandoned price zones, as we’ve seen significant growth in those tiers.

DAVID RUBENSTEINS, RUBENSTEIN’S, NEW ORLEANS, LA
There are currently two economies in America and in the world. Retailers must look at their markets: does their city have high-income citizens and/or affluent tourists? If they have either or both, there’s no limit to the prices these customers will pay. If a guy has money and if he’s a clothes horse, he’ll show his success by the labels he wears. If he likes cars, watches, etc., that’s how he’ll spend his money. He’ll show his success and leadership by buying the most expensive offerings from the most expensive brands. Ralph Lauren taught me that when I first bought his collection: find the leader and he’ll lead his friends to your store.

As for the vendor letter that was sent to many menswear stores, this company has become so big that specialty stores are little more than an extra cost they no longer need. Without us, they don’t need a New York office or staff. It becomes easier for them to order fabric and the production process becomes simplified. From their vantage point, reducing the number of smaller specialty store accounts makes a lot of sense.

NICK HILTON, NICK HILTON, PRINCETON, NJ
In our little world, it appears folks are now getting over a period of post-pandemic economic exuberance, the kind of emotional wave that surges and recedes over time and affects all kinds of economic activity. We are grateful to have had help keeping our inventories in line from our advisors (Blacks Retail) to foresee and to navigate these business cycles and to plan for the gradual upturns and downturns that are natural in any business.

However, on the whole this year, I’d say inflation has helped business. Our sales, margins, transaction value and average unit sales are all up for the year, and price resistance has not really been a factor. However, since we don’t carry products with laughable price tags, we haven’t experienced our customers’ “sticker shock” to any great extent. It would not surprise me to learn that men and women would begin to realize that paying $4,000 for a sweater or $12,000 for a jacket was not justifiable or even smart, despite the “status” of the brand. The appeal of genuine quality in the price/value ratio will eventually dawn on people, and truly better things, which are our stock in trade, will always find a market.

RUSH WILSON III, RUSH WILSON LTD, GREENVILLE, SC

We’re very cognizant of prices when we buy, so we aren’t seeing a lot of push back. In clothing, we select fabrics, patterns and colors first, then we consider price. We do this for each vendor.

We carry five to eight price points to satisfy all budgets.

We carry Oxxford at the top, then Samuelsohn and Heritage Gold, Coppley, Empire, Jack Victor, Trands, and Adrian Jules for the rack and custom. We open with Maxman and Paul Betenly; we also carry Byron. On the rack suits are $695 to $4995; sport coats are $595 to $3995. Our staff shows customers the top brands first, going down a price point if necessary. It’s always a compliment to the customer to show the best first. So it seems we sell Heritage Gold and Samuelsohn first. But customers buy various brands, selecting what they like in pattern and color.

As for sportswear, we’ve gone into the stratosphere, selling cashmere sweaters at $795 and sport shirts (Emanuel Berg) at $395. I think we offer value as well as quality, so our customers have not reacted negatively.

BOB MITCHELL, MITCHELL STORES

We continue to be concerned about price increases yet at the same time, our growth this year is coming from the higher dollar amount per transaction. Yes, we see some price resistance and hear some customer complaints but in a multi-brand store like ours, customers can usually find what they’re looking for at several different price levels, even from top luxur y makers.

JOHN COFFMAN, COFFMAN’S, GREENVILLE, NC:

No question there’s been a dramatic increase in apparel prices along with prices on everything else in the country. Where it starts to concern me is when we cross certain price thresholds: shirts going from $275 to $325, clothing from $1799/$1895 to $2295/$2395. I don’t see prices coming down anytime soon, if ever.