How luxury brands have raised prices by 60% in a decade to

'INCREASE their appeal'

By DAILY MAIL REPORTER
PUBLISHED: 19:03 GMT, 5 August 2013 | UPDATED: 21:23 GMT, 5 August 2013

In 13 years, the price of an Herms Kelly bag has jumped from $4,800 to $7,600. And in ten
years, Carrie Bradshaws famous Manolo Blahniks have risen in price from $485 to $755.
The cost of luxury goods has risen 60per cent in a decade, according to the U.S. Bureau of
Labor Statistics. And while many people in the industry blame the growing costs of raw
materials, like crocodile skin, others say designers are raising prices purely 'to increase their
appeal'.
According to Business of Fashion, Burberry is one fashion house that admitted in March it
would increase prices to attract new, wealthier customers after more 'exclusive' products.

Designer prices too heavy? Many people in the fashion industry blame growing costs of raw materials, like
crocodile skin, for increased prices; but others say designers raise prices purely 'to increase their appeal'

For some brands, having to factor in seasonal markdowns is another factor in raising retail
costs.
'Designer brands repeatedly going on sale may eventually be forced to artificially inflate
prices to counter the margin pressure,' explained Matthew Walker, Creatures of the Wind
chief executive, and former president of The Row.
While some luxury brands, like Hermes and Louis Vuitton, do not discount, many do. Prada,
Alexander Wang, Isabel Marant and even Celine will mark down 'last season's' product in
order to clear inventory.

New York retail consultant Robert Burke noted: 'A brand's biggest fear is having to mark
things down.'
Savvy shoppers know that three months from a first drop of new product, retailers will offer
up to 70per cent off, making purposefully exclusive and often inaccessible $1,400 stilettos
much more 'reasonable' at $300.
'People who are on the really cutting edge of fashion might buy pre-season [at full price] but
many folks wait for the discounts,' said journalist Ellen Ruppel Shell, author of Cheap: The
High Cost of Discount Culture.

'If demand is there, brands will continue to move up'

But the fast-rising prices of designer products can also be attributed to the fact that there are
more people able to afford to the high costs.
The number of high-net-worth individuals in the world increased by 9.2per cent in 2012 to
12million people, according to a report by Capgemini, a management consultancy.
More high-net-worth individuals live in North America than anywhere else in the world
(3.73million people, up 11.5 percent year-over-year), but the number of wealthy individuals
in the Asia-Pacific region increased during the same period, to 3.68million.
'These are people who have their jets outfitted in Herms leather and Loro Piana vicuna. If
demand is there, brands will continue to move up,' said Mr Burke.

Indeed,the e-commerce site Net-a-Porter currently has more than 100 pairs of shoes priced
over $1,000, and two pairs of Christian Louboutins that exceed $6,000.
And while U.S. inflation has increased the Consumer Price Index by 27per cent in a
decade, according to the U.S. Bureau of Labor Statistics, the price of luxury goods has risen
by 60per cent.
'The question is, how high is high?' asked Mr Burke.
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