$99 IS MAGIC PRICE, ACCORDING TO VENDORS
Byline: Miles Socha
NEW YORK — Sure, the air gets pretty thin when the price of jeans creeps over $100.
More than 97 percent of women’s jeans purchased last year in America cost less than $50 at retail, according to the most recent figures from the NPD Group.
Yet there’s more than enough oxygen at the premium level today to sustain robust double-digit growth, say high-end jeanswear manufacturers, predicting more American consumers will trade up to more exclusive, high-quality alternatives to middle-of-the-road brands.
“Lots of consumers don’t want to wear ‘me-too’ jeans,” said Laura Chambers, vice president of sales and marketing for Replay USA, which logged a healthy 23 percent increase in sales in the past year. “There’s definitely an affluent, fashion-oriented consumer who wants to wear European jeans and not the top six brands found in department stores. It’s more about superior fit, finishes and quality.”
Chambers said premium vendors’ fortunes have increased in America as jeanswear specialty stores trade up to set themselves apart from department stores. Not so long ago, $48 to $75 was the domain of these denim specialists. “Now it’s more like $75 to $100,” she said.
Better fashion stores, which are earmarking less of their open-to-buy for collections and adding more casualwear, are also turning to premium jeanswear brands, she said.
This spring, Replay exhibited for the first time at Fashion Coterie, an upscale trade show here featuring designer and contemporary sportswear lines. Chambers said she signed up 35 new accounts. “The biggest growth opportunity is in better boutiques,” she said.
Don Henshall, chief executive officer at Diesel USA, has a simple theory about what’s behind the proliferation of high-end jeans: good old-fashioned conditioning.
“With more of us out there at $99, the customer recognizes that as an acceptable price point,” he said, noting Diesel posted an increase in denim sales of 35 percent in the last year. “I see the premium category expanding.”
In fact, Henshall pointed out that the entire denim market seems to be heading upscale. Although department store status brands like CK Calvin Klein Jeans and Polo Jeans Co. all offer a $48 opening price, these vendors also have styles that retail for more.
Jeanswear executives credit Lucky Brand Dungarees, based in Los Angeles, for carving out big volume with jeans at the $66-to-$68 level and Todd Oldham for pioneering the $69-to-$79 range.
Michael Press, president of Todd Oldham Jeans, noted the acceptable price for designer jeans has been creeping up ever since the mid to late Eighties, when Marithe & Francois Girbaud helped define the upscale jeans concept.
“Some day, middle-American parents won’t be startled by their kids’ jeans prices being $65 and above,” he said. “Right now, they’re digesting $50.”
Press said he sees the premium denim market splitting into two categories: true “boutique” jeans retailing from $90 to $175 and more “volume” premium jeans ranging from $60 to $80.
He predicted upper-end and moderate manufacturers will attempt the more “volume” premium price zone carved out so far by Todd Oldham and Lucky Brand. “For basic denim, once you get over a retail price of $100, the market shrinks incredibly and the retail stores that are capable of selling a basic denim jeans over $100 retail also shrinks,” noted Daniel De Costa, executive vice president at Joop Jeans USA.
“You have to be very selective and educate your retailers as well as your customers to understand this price point.”
But De Costa said prices for its “fashion jeans” made of fake leather or special stretch or velour fabrics have increased slightly, approaching $200, and “our business increases every season.”
Gila Reinitz, director of marketing for Sixty USA, which distributes Miss Sixty and Energie, agreed.
“If the consumer sees something new, something unavailable elsewhere, the price won’t matter, whether it’s $80 or $150,” said Reinitz. “There is the appeal of exclusivity, and of course there is always the desire to own status-symbol items.”
Several executives noted premium brands tend to seize on cutting-edge denim trends early and interpret them best. Press said the trend to dark denim has been a boon to premium manufacturers, who have been doing dark denim longer and use more indigo than lower-priced brands.
Most brands say they rely on word of mouth among retailers to increase their distribution at specialty stores.
For now, $99 seems to be the magic price for premium jeans in America.
Last year, Replay reduced prices by about 5 percent to get its opening price below the $100 threshold.
Chambers said the move immediately boosted its sell-throughs at major stores like Bloomingdale’s.
For Diesel, $99 also works wonders.
“We once had $89 jeans, and honestly, it didn’t make any difference,” Henshall said.
But vendors continue to test new price zones.
Six months ago, Big Star USA introduced a basic, straight-leg jeans style that retails for about $85.
“I’d say 80 percent of our client base across the country picked up the style,” said Bonnie Sussman, East Coast sales manager. And for holiday, Big Star plans to introduce a high-end junior line with jeans retailing from $65 to $80.
Still, $99 to $120 is where the bulk of Big Star’s U.S. business is done.
“It might be a price issue when the jeans are on the rack, but when they get the jeans on and they look good and feel good, they’re going home,” Sussman said. “Our customer doesn’t flinch.”