Fashion lost the plot
Astonishing prices for the simplest products, shifting consumer priorities and a clear disregard for the aspirational market have left many questioning whether it is still worth buying luxury goods. The fashion industry finds itself at a crossroads of maintaining the illusion of exclusivity while justifying implausible prices that can surpass the production value by more than double the amount. Do brands think customers are stupid?
The production cost of a simple white T-shirt from a brand like Gucci or Balenciaga is relatively modest: less than 1 meter of great quality Italian cotton jersey costs £12, made in Italy cut, make and trims costs £14 and packaging costs £4 for a total of £28. Yet, these brands mark up these products at shocking prices. A white cotton T-shirt – a basic staple in everyday wardrobes
– from a luxury brand can easily surpass £400. This is an example of an item that is relatively easy to make and utilises minimal materials, yet the prices passed to the consumer signal that brands are no longer interested in attracting aspirational consumers, but outright looking to appeal to a clientele that is indifferent to price points. In doing so, they also misunderstand what aspirational luxury customers actually want to purchase – and no, it’s not logo-heavy status indicators, but rather subtle craftsmanship, quality and timeless appeal.
The numbers paint a stark picture. A study conducted by Mckinsey reveals that luxury brands nearly tripled their economic profit from 2019 to 2024, mostly due to price increases rather than increased sales volume. Chanel’s classic flap bag that was once considered an aspirational purchase and an investment piece now costs £9,540 first-hand – almost double in comparison to five years ago. Chanel has even begun opening private boutiques for the ultra-wealthy clients, reinforcing the industry’s shift away from the broader consumer base.
The dream of buying into a luxury brand has faded for many. Consumers once saved up to own a piece of high fashion, be it a handbag, a coat or a pair of designer shoes. With apparel purchases becoming more and more out of reach, shoppers opt for small accessories, beauty products or fragrances to get a taste of luxury, but these don’t foster long-term brand loyalty.
Having customers settle for a lipstick or belt is disrespectful and a far cry from the deeper engagement brands were once expected to cultivate.
At the same time, mid-range luxury brands have stepped in to fill the gap for consumers who can no longer afford heritage fashion houses. Labels offering “attainable luxury” position themselves as alternatives to high-end designers, but they are also increasing the prices and becoming less accessible than before. All the while, the quiet luxury trend only complicates things, with many consumers drawn to the understated elegance of brands such as The Row or Loro Piana, but those unable to afford such pieces often resort to replicating the aesthetic with
cheaper and lower quality garments from fast fashion brands – think of the Pretty Little Thing rebrand. These budget-friendly alternatives mimic the look of luxury without the craftsmanship, comfort or durability and create a market flooded with garments that lack the longevity associated with true luxury.
For those still interested in fashion, the options are limited. If full-price luxury is unaffordable many turn to the resale market or fast fashion. The study also found that pre-loved luxury is here to stay, with 63% of aspirational luxury consumers purchasing a second-hand piece in the past six months. The demand for luxury remains, but the path to ownership has drifted away from brands themselves. The irony of the fast-fashion alternative is that many consumers would prefer to buy ethically-produced, quality pieces, but when the alternative is paying the equivalent of a luxury holiday for a single coat, ethical considerations take a backseat. With younger consumers (under 35) caring about sustainability more than ever before, luxury brands could be champions of ethical production and connect with a new generation of customers. Yet, they are pricing themselves out of relevance.
The shift in pricing strategy coincides with a broader change in spending habits. Younger consumers, especially Millennials and Gen Z, are prioritising experiences over material possessions. The choice between a designer item and a week-long holiday is an easy one: why buy a jacket when you can spend that money on lifelong memories instead? The luxury market is now not only competing with mid-tier fashion brands, but also with travel, fine-dining and wellness experiences.
Despite the warning signs, the notion of luxury as exclusivity remains central. The middle-class aspirants who once drove a brand’s success are being priced out of the fashion market in favour of those on the wealthiest end of the spectrum. Brands must find a way to balance exclusivity with pricing ethics. If they don’t, it would soon be discovered that they lost the loyalty of everyone else in the pursuit of the elites.
