Way to bury the lede. Banana Republic - Gap - Old Navy. Anthropologie - Free People - Urban Outfitters. Ruehl - Abercrombie - Hollister. You find your vendors in China, you pay them pennies, then you distribute their wares based on how much it sucks. That 30 cent t-shirt? If it sucks, it's an Old Navy shirt, sold for $5. If it kind of sucks, it's a $14 shirt at Gap. If it only sort of sucks, it's a $30 shirt at Banana Republic. And then you act surprised when H&M buys the same shirt from the same vendor and charges $4 for it. I buy mine at the outlet mall for $18. If you're going to sell me $60 jeans for $18, I'm going to buy them. I'm also going to stop paying $60. Forever. I have thrown about $400 at Stitch Fix for my wife. The items there are better than anything we can find. We also pay nearly full retail. They always fit. The more exclusive malls and stores in Los Angeles offer free personal shopping (a bored housewife follows you around and tells you how fabulous you look). The growth, as always, is at the high end because that's where the value add is. I mixed a conversation last night of people saying that if you can buy it at Macy's, it's not worth buying. Then they started talking about how much it costs to take a helicopter to the Hamptons. It doesn't cost Hermes $15k to make a Birkin. They probably make $14k profit on each bag. How many t-shirts does it take the Gap to match that?There’s been general deflation in the clothing industry. Apparel has become cheaper to make in recent years, especially as more production shifts to less expensive labor markets.
Take a pair of men’s Levi’s 501 original-fit jeans. The price of this wardrobe staple used to steadily climb, but no longer. They cost $58 in 2009, then rose to $64 three years later, only to fall back down to $59.50 last year.
Stitch Fix Inc., an e-commerce clothing seller that was founded in 2011, has been an exception. The retailer pairs algorithms and data to select customized outfits for its subscribers, giving shoppers a feeling of personalization and an easy, at-home experience. The company had its debut on the Nasdaq Stock Market in November, and the shares have gained 34 percent.