Grace with her Hermes bag via
There has never been a time when we've seen so many signs that we are witnessing the slow death of what is perceived to be the luxury good. Luxury goods were, once upon a time, the provence of the truly Rich and the well travelled. The average person had no idea who Balenciaga, Worth, Chanel, and Dior were, except perhaps if they glimpsed them in the pages of Vogue, and gradually (some many years down the track) saw the designs trickle through to the mass market. If you wanted actual Dior, you had to travel to Paris, make an appointment at the atelier (and you were not guaranteed being granted an appointment as they vetted who was allowed to wear their designs), you'd have your outfit made to measure and then hand over very large amounts of money to pay for your one of a kind threads. Similarly, if you wanted a Gucci handbag, you would visit Florence, Tiffany jewellery - you'd visit New York. These things had an aura attached to them due to sheer inaccessibility, their quality and craftsmanship, and the requirement that you were in the know to actually recognise these things in the first place.
Not anymore. With today's mass consumption of the luxury good, and the celebritisation of the brands behind many iconic fashion items, inaccessibility is no longer a problem - click and you can buy it. Or just walk into a shopping mall in Melbourne or Texas or any other large-ish city in the world and get your Prada handbag (Adelaide is getting a Tiffany's for crying out loud - who needs to go to 5th Avenue now?). We are now in an era where the average person on the street will recognise the Chanel logo, thanks to the relentless advertising and heavily logo'd goods Karl has pumped out for the past 30 years.
Karl's laughing all the way to the bank with this creation via
A couple of weeks ago I read an interesting article buried deep in the Business section of The Australian newspaper (syndicated from the WSJ - article here). The cost of a Chanel handbag has risen 70% since 2009. This is, they claim, to offset the rising cost of producing the handbag. The article cites that Chinese wages have increased 67% in the corresponding period. The only problem with this, is that these handbags are supposedly manufactured in France, by French workers. The French have not seen big pay increases since 2009, as France is fairly depressed economically. Additionally, the Euro has fallen against most other currencies during this period. So, in fact, the price of Chanel handbags should have fallen, rather than risen. Unless they are indeed made, or largely made, in China (in which case the workers are probably being paid say $2.70 an hour now, instead of $1.50 in 2009, which would hardly justify a $2,700 price increase on the bag).
Largely, the large luxury good companies are trying to make their bags scarce, and attempting to make their bag exclusive by pricing out the middle classes, and this has been the real driver behind the big increases in the cost of the bags. The price we pay in no way actually reflects the quality or craftsmanship or the cost of producing the item, nor in fact reflects its exclusivity.
This point was further hammered home when I was reading an article about the venerable English tailor Gieves & Hawkes, of Savile Row fame. They hold warrants to make suits for Prince Charles, amongst others, and have a 200 plus year history of outfitting English gentlemen with their military uniforms and city suits. Unfortunately, despite holding the royal warrants, and despite manufacturing their bespoke made to measure suits in exactly the same way as they had for past few centuries, they were losing money. In 2002, the Gieves family finally sold the business to a Chinese entrepreneur. It's been turned around, and in spectacular fashion.
Their first order of business was to run things essentially on dual levels. You can still get a bespoke, made to measure suit in the Savile Row store from the tailors that still work on the premises (they can make a maximum of 800 suits a year), but now there is an enormous Ready to Wear division, which has put the business back in the black. The suits are not, however, made in London... or even the UK (although they still have the Made in Britain sign on the website, confusingly). They are now made in China, and are being marketed at the Chinese and the Asian market - Gieves and Hawkes opened 113 stores across China alone, capturing a large swathe of the fast growing aspirational Chinese upper-middle classes. Slick marketing, such as their Como web video hone in on this - watch it and see if you don't want this life too.
There's just one problem with this. It's just not Gieves & Hawkes as it was any more. Theses are suits made in China, for the Chinese, and have no relation to Savile Row (they note in the article that they have even had to change the fit of the suits slightly, as the Chinese prefer a boxy suit cut). It's now just a brand name with luxury cachet given by the Royal Warrants (but for how long, given that this is not a British company any longer) and the 200 year history, and a very slick website. By running a two tiered system of sales, they may be making a commercial success of the business, but they've removed the actual genesis of what gives the brand the cachet that it once had - location and exclusivity. They run the risk of the actual bespoke suit part of the business losing customers due to the new mass production rendering the brand common, and in turn the Asian customers at some point realising they have been conned into paying through the nose for brands that are not actually luxury goods.
For surely this is what will one day happen. The irony that the West is producing luxury goods that are gobbled up by the eager East, who in turn produce the cheap mass produced goods for the West surely will become evident?
And what exactly is a luxury good these days? Surely a bag, or shoes or ready to wear clothes that are (in actual fact) manufactured in large quantities, and sold in boutiques located all over the world is not that luxurious? It's just expensive, and not exceptionally good value for money. The mood in the West over the past 10 years has started to shift to brand authenticity, heritage, and quality. Those things cannot be mass produced - for that reason they are, in fact, luxurious. Hype, excitement, the new and the latest - all things associated with the large luxury goods brands (most of which are now owned by large conglomerates, rather than the privately run family businesses they started out as) is used to shift large volumes of perfumes/ bags/ shoes/ trinkets. Mostly this is gobbled up by those who can't really afford it (I once read a blog where the girl writing it - a college student in the USA - was saving $100/ month toward a Chanel handbag. She had to work to put herself through college, and was accruing large amounts of student loans during her period of study, but wanted to buy herself the bag as an end of college gift to herself after saving for four years).
So is this the beginning of the end of the luxury good industry we are witnessing.... and what does luxury mean to you?
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