How luxe is that luxury item?

We talked to Dana on her perspective of luxury today and found out what designer brands are really worth.

 

In Deluxe Dana claims that many brands including Louis Vuitton, Prada, Gucci and Yves Saint Laurent are actually made by low-paid workers in production line factories in China, North Africa or Eastern Europe. Products can then be shipped back to Europe for a small final touch and therefore, a ‘Made in Italy’ label can be attached.

“I was stunned when I walked out on the factory floor at the number of brands that were there,” she says of a factory in Xian, China. “Brands who insist they make everything locally. There was one brand that was churning out 30,000 handbags a month. You would expect two or three a week for luxury items.”

The workers themselves are no less skilled than Italian workers at making items, she says, they simply are enforced to cut costs by using lots of glue and leaving out lining.

Enforced by who? The business executives in these companies. “I was talking to the president of Louis Vuitton and he told me 40% of people in Japan have an LV monogrammed item. I asked him don’t you ever worry about saturating the market? And he said ‘ah but that just leaves us another 60% to sell to’.”

Bernard Arnault, in particular, now owns 50 luxury brands after purchasing them off the original artisans. He is a business man who has invested money to make profits for shareholders and can only have increasing profits every year, by cutting costs.

“These are such huge companies and they have nothing to do with the families that originally founded them,” says Dana. The sudden increase in turnover of luxury brands made Dana sit up and take notice while she was writing fashion articles for Newsweek. “In 1977 Louis Vuitton had two stores – Paris and Niece, and it did $12 million a year in sales. Today it has more than 370 stores, and it does $3 billion a year in sales.”

 

The book was inspired by her realisation that something must have changed in the luxury market. “It’s just such a huge increase and I thought most consumers don’t realise.”

What you are actually buying, she says, is what the business men and women term the 'dream'. As luxury is seen as a status symbol, the dream is based on the desire to have items that represent this status. Perfumes and scarves, for example, are seen as entry-level luxury items in order to have “a piece of the dream”.

As Dana says, it’s all symbolism from branding and marketing – which is where the money from your purchase goes. And purchases can be marked up 40 times the cost to make it, if not more. There’s no limit, she says, because people will pay.

 

So where did this ‘luxury’ ideal come from? “I think we’ve strived for luxury since the dawn of man. There were cavemen who’d sew bits of feather and bone to their fur to set them apart from everybody else.” She says in Deluxe that the luxury we know today comes from the old French royal courts, where 17^th to 19^th century figures such as Marie Antoinette and Napoleon’s wife Josephine had gowns encrusted with sapphires, diamonds, silver, gold and pearls - spending millions on clothes. Louis Vuitton’s own family business began by crafting trunks that became high demand from the end of the 19^th century.

“It was really a niche business for a niche clientele,” she says. After World War II the business continued but, according to Dana, this was the end of a “glamorous time” which was followed by post-industrial capitalist society, turning luxury into a mass-produced product for consumers. These brands are no longer luxury, Dana says, because the items are not rare or unique. “If they have 25 of them on display then why pay so much money for it? It means it’s a very common object and if it’s common then to me it’s not luxury.”

 

So what’s a girl to do? Dana suggests we demand exclusivity and shop at local places.

“If you have the occasion to, why not indulge in that luxury of having something made just for you. It fits you, it’s the colour that you want, it’ll be lined (which it should be), the buttons won’t fall off because it was sewn by hand, and it will probably cost you half of what something off the rack in a department store would cost! Or you can go to your local boutique and develop a relationship with them. This way you’re also contributing to your local economy.”

 

Luxury, then, is not gone - it’s just in other places. Dana believes we can find luxury fashion in the local Sunday market or NZ designer’s stores. But overall she says luxury shouldn’t necessarily be a tangible item. “I think it’s just something special and unique. For me, a luxury is just taking the afternoon and playing with my daughter.” Can material goods compete with that?