Could the shaky economy spell the end of $200 jeans?
With retail sales slowing, some makers of premium denim are worried that shopper appetite for jeans that cost $150 and up will disappear. Some are trimming retail prices while others are rolling out new styles that they feel are different enough to entice shoppers to buy. Kasil, a Los Angeles brand, for example, is introducing a pair of waterproof jeans for the holiday season that it says is so impervious to liquids that even spilled red wine will roll right off of it. The $189 jeans, named ???Portland??? after the notoriously rainy city, will hit stores next month.
Premium denim-makers have had a good year so far ??” retail sales of men??™s denim rose 5.3% to reach $5.4 billion in the year that ended in July, according to NPD Group, a Port Washington, N.Y. market researcher. In women??™s denim, sales jumped 8.9% to reach just under $8.1 billion in the year through July, NPD said. (The July numbers are the most recent figures NPD could provide.) On Wednesday, Joe??™s Jeans Inc., one of the few public premium-denim brands, reported a 16% increase in net sales to reach $18.2 million and a record net income of $2.2
million in the third quarter.
High-end denim may have been more protected in this slowdown as consumers have come to believe that they??™re a good investment, said Monica Tang, a retail strategist with Kurt Salmon Associates, who said expensive jeans have been one of the ???bright spots??? in retail this year. ???The consumer thinks, ???Hey, if I buy a pair of jeans that??™s $150, I can wear these three times a week but if I buy a dress, I can wear that maybe once every couple of weeks,??™??? she said. Still, she predicts that sales are likely to slow down this fall due to severe consumer cutbacks across the board.
Some denim companies are focused on their prices. Earnest Sewn, which sells U.S.-manufactured jeans for $178 to $300, this fall launched the Earnest AM I collection that is made in China and includes jeans that retail for just under $100. Gilded Age, which used to use only Japanese denim for its $300 to $600 jeans, is
experimenting with U.S. denim for spring 2009. The U.S. denim pieces will retail for much less ??” $228 to $288. Similarly, Kasil, which says it has seen its sales flatten in the last few months, managed to lower
the retail price of most of its denim to $170 to $185 this fall from the usual $185 to $202 by switching from Japanese denim to U.S. denim. Kasil designer David Lim says he is shooting to use U.S. denim for 85% of his collection by next year, up from 25% to 30% right now.
???We??™re concerned about the economy on many levels,??? said Scott Morrison, Earnest Sewn??™s chief designer. ???We??™re expecting our wholesale and retail business to be affected in the coming months.???