Dolce & Gabbana To Cut Prices

[papa_levante]

WWD
June 16, 2009

MILAN —

Stefano Gabbana and Domenico Dolce are continuing their push for revolution in the fashion industry — this time taking on prices.

After criticizing what they deemed untimely and unrealistic shipment schedules (think beefy wools in stores in July and wispy silks in November), the designers’ latest quest is to shave prices by between 10 and 20 percent while maintaining creativity and quality.

The initiative will begin with the upcoming spring season, but is a long-term one, said Gabbana. The price reductions will occur across the board for both the main and D&G lines and margins will be squeezed to help achieve them.

“This crisis has two key aspects: it’s international and social. The first thing people say these days when they walk into a store is, ‘Nice, but how much?’” noted Gabbana, wearing a white shirt, frayed khaki Bermuda shorts and Crocs sandals. ( ) “In this moment of uncertainty, people spend more willingly on travel or spas rather than on a new dress. We want to work for the final consumer.”

Evidence of the lower prices is seen in the following items: A pair of five-pocket jeans for spring will sell for $450 (for spring 2009 they cost $695); a dress will cost $1,469, down from $2,295; a leather bomber jacket will be priced at $1,499, compared with $2,296, and an iconic stretch silk tulle corset dress will go to $3,589 from last year’s $5,200.

To obtain the price cuts, the designers talked their suppliers and manufacturers into a collective, cost-efficient approach across the entire supply chain. And everyone, from button suppliers to mills to manufacturers, is doing their part, stressed the designers. In addition, the designers’ usual selection of hundreds of fabrics was dropped to dozens that will be served up in a more far-ranging palette, while constructions will be simpler. For example, Dolce and Gabbana worked hard to develop alternative stitching techniques that are innovative, but reduce manufacturing costs.

Dolce compared the process to the resetting of a computer or a cleanup act without wiping the slate entirely clean. “The idea is to peel off the superfluous because there are too many clothes, too many seasons, too much advertising — too much of everything that is tacked onto the final price. We want to go back to how things were 20 years ago. It’s about drawing the line,” he said.

Gabbana doesn’t believe customers will feel betrayed or taken for a ride by having paid more in the past. “Our goal is the consumer and to keep the thousands of people that work for us,” he said.

Added Dolce, “This is the only way to save the market and our companies. It’s time to turn the page.”

 

[mikeijames]

funny, since most of these houses artifically raised prices to pad their pockets and keep up with the joneses in the first place. also, this is easy for a company like dolce and gabbana to take on seeing as they have a fresh revenue stream from cosmetics.

 

[Trista]

You make a good point there, that they have the money coming in from their other ventures (beauty, accessories, eyewear), but at the same time, you can't help but wonder when and if other brands will follow suit.

 

[fashionista-ta]

I've been noticing this already with other lines ... and it's a welcome change. One approach I've noticed is the fiber--like a wool/ramie blend. I have no issue with that as long as it looks and feels good (this is for pre-fall ... I haven't actually seen it yet).

 

[Fabulyss]

This price cut is so minimal and ineffective. IMO, the person that can afford a $1,000 is the exact same person who can afford the $2,000 dress.

 

[Spike413]

I remember reading the buyers reports that were posted after the collections for F/W and there were mentions of various designers working to keep costs down and make the clothes more reasonably priced while not sacrificing quality.

I happened to be looking through an old Harpers Bazaar from 2001 and the difference in prices for designer clothes back then and now really is amazing. Seeing the prices gradually rise over the years didn't really hit home until I saw just how high they've gotten, so hopefully this will be an industry wide shift.

 

[fashionista-ta]

^ I've been clearing out paper stuff from the past 3 decades of late In a Saks catalog from 1992 that I threw out yesterday, YSL flats were $175.

But you're absolutely right, even just a few years ago, prices were much much better.

I really see it differently on the $1000 vs $2000 dress. It's not even can you spend it, it's do you want to. You're asking, Is it worth it. In my mind, $2000 is really at the outer edge of what I want to spend for any one piece. $1000, I'll consider, and feel much more comfortable with.

One way I adjust is to shop different lines ... they want to change their price point so you stay with them.

 

[mikeijames]

I happened to be looking through an old Harpers Bazaar from 2001 and the difference in prices for designer clothes back then and now really is amazing....

it really is true. i mean, "it" bags and shoes used to hover in the $500s and standard designer shoes and bags used to be in the $300s. now, it's almost impossible to find something that price -- unless it's on sale.

but it makes sense, like real estate, who is going to sell something at one price when they know their neighbors across the street are getting twice that for the same thing.

 

[gossiping]

This price cut is so minimal and ineffective. IMO, the person that can afford a $1,000 is the exact same person who can afford the $2,000 dress.

so true $100, $200 it makes no difference

 

[designerleather]

This price cut is so minimal and ineffective. IMO, the person that can afford a $1,000 is the exact same person who can afford the $2,000 dress.

It depends on the item and the market. I think the example you give is a little too extreme, since it is a 50% difference and not say 10 - 25% which seems to be reflective in the article.

People tend to have a general barometer about what something is worth.

Now while true, on the top end of a scale, someone who spends money with no consequence, generally thinks little about such things, but there are whole segments on the market that will spend $1000 on one type of item and not $2000 on a similar but more expensive item.

In fashion especially these markets are seen in the "middle markets" You have your low end cheapies... You then have the middle which are priced decent, but much higher and offer probably one of the best price-points in terms of quality/value to price, and then you have the high end. There is always a justification that the people on the upper end of the bottom two levels make as to whether they spurge on items that are across their threshold, or whether they stay in their comfort zone.

Will be interesting to see how all of this is received, but what they lose in markup they are probably counting on making up in volume

 

[clocked]

i just....can't believe he was wearing crocs!

 

[fashionista-ta]

^ 'Nice, but how much?'

Perhaps he was rocking them ...

 

[homeboy]

This price cut is so minimal and ineffective. IMO, the person that can afford a $1,000 is the exact same person who can afford the $2,000 dress.

Not necessarily. You're forgetting that not all Dolce&Gabbana customers are heiresses with near unlimited trust funds. Quite a considerable number percentage of people who shop in high-end boutiques are upper middle class people - some of which buy their goods using credit cards. While I'm not rich I could consider stretching my econmy to prices near $1,000 to buy a truly exceptional suit that I will cherish for quite a few years, but would never even look into buying clothing for $2,400.

The purpose of these cuts is to tip over the "thinking" shoppers who have a budget and might only afford to indugle in such expensice items a few times a year.

 

[Blanche DuBois]

Are you kidding me¿¿
of course there is a difference between spending $1000 than $2000, it's the double!!!
I love the idea that their clothes are more approachable, I believe all brands should follow this, I think they might not have a choice either way...

 

[b9409]

funny, since most of these houses artifically raised prices to pad their pockets and keep up with the joneses in the first place. also, this is easy for a company like dolce and gabbana to take on seeing as they have a fresh revenue stream from cosmetics.

Couldn't agree more. And I love that you use the word 'artificially' because that was what it was: the imposed value. I would be very happy if D&G is indeed doing this not to lose any of the workforce and employees who have been loyal to them through thick and thin. Plus, even though they are very well-made clothes and accessories, some of D&G's prices were incredibly outrageous for what they items were. Maybe this is only me, but selling very one season-trendy clothes for that much money is a little outdated concept anyways, especially in these times.

btw, a 50% price cut is HUGE. Think about what that item will be when there is an additional sale at the end of the season! It will be like buying a diffusion line item with -hopefully- the same quality and this time a cleaner and shaven Dolce aura. These things do matter. On the other hand, they need a lot more paycut to convince anyone to buy anything from that very last Dolce collection anyways; it was beyond hideous.

 

[fashionista-ta]

Not necessarily. You're forgetting that not all Dolce&Gabbana customers are heiresses with near unlimited trust funds. Quite a considerable number percentage of people who shop in high-end boutiques are upper middle class people - some of which buy their goods using credit cards. While I'm not rich I could consider stretching my econmy to prices near $1,000 to buy a truly exceptional suit that I will cherish for quite a few years, but would never even look into buying clothing for $2,400.

The purpose of these cuts is to tip over the "thinking" shoppers who have a budget and might only afford to indugle in such expensice items a few times a year.

I like your term 'thinking shopper'

I've seen some stores laying in lavish supplies of gauche and OTT accessories that would appeal only to someone who doesn't give a d@mn about what's going on & is the absolute opposite of the thinking shopper ... not to mention someone who is severely lacking in taste ... so I appreciate this approach.

 

[tctra]

I reckon the cuts are a fair bit considering the average person with an office job are willing to spend money once in a while on something nice and the difference between 100 and 200 is, let me tell u, huuuge.

Plus, its these same average people that they rely on for their income, not the wealthy socialites as many of you think. Chances are these socialites get the clothes at massive discounts (the ones that are seen in tabloids anyway)