Fashion
What’s Going On With Clothing Prices?
Our critic explains the difference between the cost to manufacture a piece of clothing and the price you end up paying for it, and how tariffs might affect these markups.
I’m curious how much clothing is marked up over cost. Does it really have to do with quality, or can a popular or fancy brand mark up more than average? And what does the threat of tariffs mean? — Jane, Boston
Back in 2012, a designer named Bruno Pieters, who had been the main guy at Hugo Boss, had an epiphany: It was time for fashion to try radical transparency. Not in clothing (naked dressing has long been a thing) but in what went into the manufacturing of clothing.
So he started a new line called Honest By, and on its website he included information about where each part of a garment was made, down to the buttons and zippers, as well as the factories that made them — and, even more radically, the cost of the garments. Including the markups between what they cost him to make and the price he sold them for.
I say “radically” because, as Millard Drexler, a founder of Alex Mill and the former chief executive of the Gap and J. Crew, told me, “No one wants to talk about it.”
Indeed, there’s so much obfuscation around price at this point, and some prices are so stratospheric, it is hard not to feel as if you are being duped every time you walk into a store. But it’s also true that the calculus has gotten more complicated over time.
The general rule is as follows: The cost of a garment to the manufacturer or brand includes materials, labor, overhead and shipping of the materials and samples. Sometimes the cost includes the taxes involved with “landing” a garment, or taking it into a foreign country.
That cost is then marked up about 30 percent for wholesale because you have to add in more shipping, profit and brand equity — that is, the reputation and worth of the brand name itself and the way it may hold its value over time.
