#11 – Why is contemporary fashion so expensive

The brand “Nothing” released their 2a phone and when you look at it it looks better than an iPhone, it comes equipped with the best tech and can do all that you would expect from a modern top-of-the-line smartphone. It’s contemporary tech at its best.

One would expect a price tag of 1000€ or somewhere around that.

But no, the phone comes out at 329€! It’s full of tech, a custom user interface design and a great packaging experience for which Apple customers are ready to spend thousands.

Then when looking at fashion and in particular Past Tense you may ask:

Why would I need to shed 560€ to buy your Merino sweater?

So why is that? Let’s look under the hood and understand everything that has gone into making that jumper.

1. This item is from our very first collection. This is when the brand started, with no reputation, no previous production, only our good faith and some cash available to develop that item. This means that we were a bit shy with the quantity to produce which narrowed down our options for what factory to use. From that point, we knew that it would not be cheap.
2. We wanted to use a premium yarn. 100% Merino with a great hand feel. So we picked cashwool from Zegna Baruffa which essentially gives you a near cashmere feel but on a 100% Merino base. Luckily for us, this yarn comes with hundreds of stock colours so we saved the trouble of having to launch a production and pay for kilos we wouldn’t use because of minimums. The drawback though is that it is made in Italy, so you pay a premium in the price for that.
3. We wanted to have the knitwear piece made in Europe, preferably in Italy. This narrowed down further the prospect list of factories and increased the make price. Curiously enough, it also narrowed down the willingness of the supplier to listen to us and challenge their way of working. That limited the chance for us to impact the way the product would be made.
4. We didn’t want to compromise too much on the design. The block pattern is something quite labour-intensive to achieve when you need to knit and then link together all the individual patterns. We found a way around to avoid having to knit all panels separately which saved us some time in the final assembly process and kept the price high instead of super high!

So how much did it cost you may ask? Here is the rough idea for you to try to figure it out 😊

• Getting hustled by the factory on development charges. A few hundred euros of upfront costs.
• Sampling - we did one proto and one showroom sample which were both overpriced and full of mistakes
• 4 hours of knitting time per garment in production
• 1 kg of 100% fine merino made in Italy yarn per garment + some extra kilos the factory ordered but did not use..
• 45 minutes of linking, stitching and some time to steam the product to the correct size and final fit.
• Retailers asking for 2,6 to 3,0 markup. Some may even ask for an additional discount and horrible payment terms on top of that.
• Some additional nightmares came along the way with for example the wrong dimension on some panels, so some stuff had to be remade.
• A tiny margin for us to cover our troubles and mostly logistics. Not much left for sales, admin, marketing, new development and so on..

So, you live you learn, and with this product, we learned a few lessons that only a smaller emerging label would learn the hard way. In my years at more established brands, I would not go through all the pains above thanks to an existing reliable supply chain, skilled knitwear technical staff in the team, field teams to control all the steps of the process and so on..

Where it hurts the most is that most emerging brands are similarly spending heavily each season in fine-tuning their supply chain towards a level that will allow them better margins and reliability, and meanwhile, retailers ask the same profit guarantees and do have similar expectations as with established larger groups.

To me, this is where I am grateful to have gained enough experience, contacts and skills in the last 15 years so that we can minimise the trial and error phase.

We are however still extremely proud of the final result on that jumper! And we do have a lot more cool ideas we are working on.

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See you next week!

Where to meet me in April

🇸🇪 🇩🇰 I might be working between Copenhagen, Gothenburg and Stockholm.

HMU if you want to catch up.