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Anatomy of $2000 Sweater

Knit Sticker Shock: Why Sweaters Can Cost $2,000

Designer fashion is exorbitantly expensive, with the spring 2014 collections seeing a leap in prices. Christina Binkley takes a look why prices are so extreme for one hot look of the moment: the chunky sweater. Photo: F. Martin Ramin for The Wall Street Journal.

The basic sweater has a new, fancy price tag.
Prices for designer fashion have been creeping up in recent seasons. The spring 2014 collections will feature even higher prices, retailers say. This winter, the price hikes have hit the comfy, cozy sweater.
Designers' prices for this simple staple have climbed well over $1,000. A decade ago, one could expect to pay between $600 and $800 for a great natural-fiber sweater.
The high price of designer goods isn't isolated to sweaters. It's not difficult to spend five figures on a cocktail dress. A new label called Baja East sells a pair of double-knit cashmere sweat pants for $1,700. Designers John Targon and Scott Studenberg say luxury stores aren't flinching. Christian Louboutin pumps, in crocodile skin, sell for $4,645 at Barneys' website. A strapless day dress from Givenchy is priced at $4,450. Bergdorf Goodman online offers 801 bags priced over $2,000, but only 38 handbags priced under $150.
Exotic skins and hand-worked details explain some of those prices. But the prices of designer basics such as sweaters and coats have risen by more than 50% since the 2007-08 financial crisis—and are likely to rise further.
During Paris Fashion Week in September, Karen Daskas, co-owner of Tender Birmingham boutique near Detroit, expressed dismay at the wholesale prices of the spring 2014 collections. Prices had already leapt for the fall collections that are in stores now. The retail price of a wool winter coat is now above $4,000, she said this week.
Ms. Daskas worries that high prices are hurting sales. "No one is buying them," she says of the coats in her store. "And they're beautiful." Still, she says unusual items that capture women's fancy are selling better, noting that she sold three $7,000 mink vests by Lanvin in one day.

F. Martin Ramin/The Wall Street Journal; styling by Anne Cardenas
Retail markups have been increasing as stores seek to make up for slower sales and faster discounting, among other pressures. Fall sales, which traditionally begin in January, this year started in the first week of November and dove to 40% off last week for some stores and brands. For apparel, markups these days range from 2.5 to 3.0 times the wholesale price—up from about 2.2 times a few years ago. So a designer garment that sells wholesale for $100 would sell in the store for $250 to $300.
The price of a designer sweater is determined by a menu of ingredients, some grounded in the materials, others intangible.
The chunky, roomy sweater is having a fashion moment. Subtle differences in cut, such as the shape of the sleeves in a Fendi sweater, signal that the sweater is an up-to-the-minute designer piece. A Burberry Prorsum sweater offers complex construction, including contoured sleeves, fully fashioned seams and a fitted waist panel.
Lightweight yarns are particularly important in this year's fashionably bulky sweaters, and yummy materials don't come cheap. The difference between the best cashmere—mostly from a few producers in Italy—and the cheapest is vast. Using the longest hairs and processing them carefully—for instance, boiling the fibers at the right temperature for the right amount of time—affect a sweater's feel and longevity. Fine Italian cashmeres can cost more than double the price of China-made cashmeres.
Designer sweaters should be of extraordinary quality—far better than mass-produced sweaters. "If you lay them next to each other, you should be able to see the difference," says Ms. Daskas. "If you can't, you should be in the $29 sweater."
Jil Sander ($2,140) Made in Italy with a 'long-yarn' cashmere chosen for its lightness. The famously minimalist label chose a wide vertical stitch that gives the sweater its hand-made feel. F. Martin Ramin/The Wall Street Journal, Styling by Anne Cardenas
Stella McCartney ($1,350) Made of South African wool in the Veneto region of Italy. Ms. McCartney vets wool suppliers for humane animal husbandry practices and sustainable farming methods. F. Martin Ramin/The Wall Street Journal, Styling by Anne Cardenas
Labor standards play a big role in price. Most designer sweaters are made in Italy or Scotland, where workers are protected by labor laws. Designer labels produce smaller quantities and can't qualify for discounts available to mass producers.
Prices of goods such as sweaters are used to signal a label's tier in the retail world. "It's one of the ways to make customers understand what kind of brand you are," says Mario Eimuth, chief executive of luxury retailer Stylebop.
Stores stratify fashion labels according to their perceived quality and price point. "Designer" refers to the most expensive labels, generally grouped together on department-store floors. The next tier down is "contemporary"—brands such as Nanette Lepore or 3.1 Philip Lim. The threshold price for a designer dress these days is about $1,200, says Mr. Eimuth. It's roughly $600 for designer shoes. Lower prices are seen as risking the designers' status.
Finally, prices are affected by the label's ability to work a sort of magic: Certain names' cachet, reputation for their quality, and other perceptions can make customers willing to pay a huge amount more for an item.
That simple Saint Laurent sweater promises to have a bit of designer Hedi Slimane's soul in it. A Stella McCartney sweater includes a suggestion that the sheep or goats were humanely raised, because the designer has consistently made that a priority.
Brands often price themselves with their competitive set. Malo, known for its fine Italian cashmere knitwear, looks at rivals like Loro Piana and Brunello Cucinelli BC.MI 0.00%when setting suggested retail prices. "So we go to the factory and say, we want that sweater at $595. How do we get there?" says John Wilson, Malo's U.S. chief executive.
Write to Christina Binkley at

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