The True Cost of Fashion x

October-1947--Women-at-wo-001Working at the rock face of fashion I have realised that very few people actually know how the modern clothing business truly works, particularly in terms of cost..and therefore profit.

Researching a visual to explain things quickly I came across the website of Everlane, who produced the following pictures..

Everlane_IG_1-1

Everlane_IG_2

The aim behind the pictures was to illustrate how consumers are ‘ripped off’ along the chain of events that leads to a designer purchase.  But is it entirely accurate?

From make to wholesaler = 224% margin

From Wholesaler to retailer = 333% margin.

Which are big margins – but the diagram doesn’t explain them – the margins do represent a percentage of the profit but it’s only a percentage not the full whack.  The margins are also required to cover other costs:

Further shipping,  more transport, import duties, administration, design time, development, currency exchange, banking fees, marketing, loss leaders, pattern cutters, equipment, fittings, pattern changes, warehousing and storage, rent, utilities, IT costs, even labels, zips, threads and buttons..and probably much more.

At the second tier, for the retailer there could be a brick and mortar shop to pay for, employees and all the associated costs, advertisng, their own loss leaders etc etc…

The pictures do prove that nothing in fashion is simple.

It is possible to cut these costs.  If you’re mass market and contract out to a third world country I’ve heard you can get a t-shirt made for 2p.  In fact clothes have never been cheaper and are now fully accessible to all. Which has to be a good thing..But at what cost? 1,100 people died in the Bangladeshi factory disaster…is it ethical? Is it exploitation? Where does the line get drawn?

There are other alternatives abroad – better factories, better conditions where many of the ‘luxury’ fashion labels get their product made.  And yes, with their financial clout and established infra-structure maybe they can make those sort of profits..but even then think how much money goes into marketing to support their brands?  And think about the problems that can go wrong – the delays, the accidents, the unexpected that all has to be factored in.  And all the time all that money being spent on manufacture is money draining out of the UK economy.

So where does this leave a British based start-up fashion label like us?

We can’t buy our materials in bulk so there is no reduction in cost for us there.

We can’t make our stock in bulk so there is no reduction here either.

Our ‘factory’ is an ‘atelier’ – a room of skilled – masterful – sewers based in London who make everything by hand.  Not at a cost not per garment, but per hour.  Look at a sewing machine, look at an expensive piece of silk and look at the finished product – the tiny stitches, the French seams.  It’s not a fast job.  Each hour is £25.00 plus VAT.  But that is the cost of a craftsperson at the top of their profession..

We have no choice, we have to start at the designer end, the hard end – so why bother?

We still believe that there is an element of magic in fashion.  We believe we can make a profit by cutting out the wholesaler and selling direct – only time will tell.  And we believe that at some point consumers acknowledge they are buying more than the tangible item itself..we believe that value can take on a new meaning, that design can be desirable, treasured and trusted…our atelier is so good they do work for Victoria Beckham.  We have drive, we have passion and we have a designer in Anna who has an acknowledged pedigree having worked with the greats such as Karl Lagerfeld and Valentino..she knows this industry and she was born to design.

The truth is that the Everlane illustration was too simplistic – the bottom-line is that in the retail world not all products are created equally.  And some are definitely created with more love and care than others.  Only sales will confirm whether that is worth the price.

Laters, Kate x

45 comments

  1. yomailondon

    Wonderful Post! Really lets people know about the fashion industry and it’s a good introduction as to how it works. 🙂 Here at Yomai London our products are handmade and we use expensive Italian materials (we are the manufacturers and the retailers)…but because we’re not well known we can’t have such a big profit margin. Which is a shame because the products are designed by a team of young designers and myself. A pair of shoes costs £30.00 to make (aprox. $50) and we sell them on our website for aprox. £70.00 ($100). We need all the support we can get so help young designers like me start and keep their career in fashion. Great post though, all things aside! 🙂

    • MasonBentley

      Not an easy post to write – so many variables..like trying to write a rubiks cube! But starting out is the hardest thing because nothing is for free, and success means lower costs. In this modern era I have to be thankful the internet has given us little people a voice – and the means to cut our the middle man..but that doesn’t mean it’s plain sailing. I love your shoes..and your studded tote is to die for..Can I do a blog post on you in the future?! xxx

      • yomailondon

        I completely know what you mean ^^ And yes that would be so great! Thank you very much 😀 xx

  2. elizaneedsaweddingdress (Eliza Wyke)

    Fantastic point well made. I couldn’t agree more. I work as a designer dressmaker (couture?!) in Yorkshire and spend the majority of my time explaining the economies of scale to customers who expect me to compete with the high street (I can’t and don’t want to) and their extraordinarily low prices. I do explain that i’m creating individuality, using finest quality fabrics (I primarily use fine wools and silks), and of course, a providing a great fit. Trading conditions are, at the moment, especially tough, but I am still hopeful for this magical industry in the UK, as consumers seek more than a cheap frock.

    • MasonBentley

      I found it very interesting that Nicolas Ghesquiere left Balenciaga because he felt the true soul of creating wasn’t appreciated by the number crunches..we have to have skilled, hands-on designers and makers to produce the ideas and inventiveness that then gets passed down the food-chain. Between that and the other kicker – economics of scale which cuts hard for the smallest, the world of fashion is a rocky road, thankfully surrounded by passion and passionate people xxxxx

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  4. purplepincushion

    It all comes down to education of the consumer. Just like consumers are completely disconnected with where their food comes from, they also have no understanding on any kind of practical level, of how their clothing is made. I saw an episode of “How Things Are Made” a few years ago that blew me away. It showed the modern factory construction of a pair of jeans. At whopping total of 6 minutes from cutting to finished product. No human hand involved other than starting the process and taking them off the circuit at the end. If I made a pair of jeans from scratch (and I have many times) I am guessing it would be a minimum of 5 hours per pair. That is with no stopping for fittings or adjustments, just straight through cutting and construction time. I have to constantly educate my customers on the value of a custom, hand made product. Some people are willing to pay, some just are not.

    • MasonBentley

      I agree – education is key. Hand-made is the hardest market because it is the smallest, most exclusive market. Organic food has made a break through. Live music hasn’t – musicians are still paid a pittance. It’ll be interesting to see if times will change regarding clothes..whether the horrors of Bangladesh will have an impact – I just don’t know – it’s very easy to pretend these things away. It’s part of the reason we decided we had to present ourselves as a brand – and it makes life alot easier that there are two of us. xxx

      • purplepincushion

        Well I, for one, will be cheering you on! I am working toward the same goal myself just on a slower track. My daughter has multiple disabilities and I need to be able to give her my complete attention when she has greater needs come up. I have set aside my store front alteration business for the time being and I am focusing on reproduction vintage pieces made the old fashioned way. This way I can work on pieces as I have time and not be under deadline pressure like I am constantly for bridal work.

      • MasonBentley

        I wish you every luck in your endeavours..we made the money for our sample range by ‘re-loving’ vintage clothes..we would buy them as cheaply as we could, although they had to have something special about them (silk dresses were particularly good) and then we would raise the hem, or pull in the shoulders or if necessary re-line. We also took patterns of pieces that we thought were particularly commercial..it worked for us on many levels – one of the major ones being time, which I am sure is a huge consideration for you! sending love x

  5. dominicgomez

    “I hit the party and they stop in that *&^#@!
    They be like, “Oh, that Gucci…that’s hella tight.”
    I’m like, “Yo! That’s fifty dollars for a T-shirt!”
    Limited edition, let’s do some simple addition. Fifty dollars for a T-shirt!
    That’s just some ignorant $#*&! I call that getting swindled and pimped.
    I call that getting tricked by a business. That shirt’s hella dough. And having the same one as six other people in this club is a hella don’t.”
    (Macklemore, “Thrift Shop”)

  6. Bumblebee

    I recently started working in retail for apparel and my eyes are opened. Its given me a whole new appreciation of what the true cost as well, as the true face of what the fashion industry is. thanks for sharing this..

  7. TNFashionLove

    My husband and I have debated on many occasions. Fantastic article with a lot of points I had never stopped to consider. Perfect for myself as a blogger beginner! Very well written love. XO

  8. bonniemcclellan

    Thanks for this insightful post! So often no one wants to think about ‘overhead’ – the cost of the shop, commuting to work, utilities, time spent bidding production costs, paying workers for sick days; it’s not free. Still, better to have one (beautifully and locally made) t-shirt (or bookshelf or frying pan) than 5 cheap ones that you’ll have to pitch next year because the materials and the construction don’t hold up.

    • MasonBentley

      I often think how many t-shirts does a person need? I wonder if it’s like children and their toys..the more you have, the less you play.. xxx

  9. Lia in Brussels

    I read your article and readers’ comments with interest. It’s very difficult to balance between production cost, profit margins and consumers’ behaviour. But a start-up designer label cannot and should not compete with multinational giants, producing cheap clothes for the masses. Everlane’s figures may be over simplified but the truth is that said giants would not keep multiplying (3- 4 multi-floor establishments of the same chain on the same street), all over Europe; or would not be able to fund their extravagant advertising campaigns leaded by top-class celebrities who are paid their weight in gold, had it not been for their extremely large profit margins made possible by outsourcing to countries like Bangladesh. You design – create – timeless, high quality, handmade pieces with attention to detail and lots of passion and love. Your target group is, obviously, those thinking, responsible consumers who appreciate (and look for) quality over quantity, clothes that feel comfortable to wear and look amazing because a lot of effort went into their design and production. I’m sure these customers do not expect multichain-like bargains. If they can actually afford your designs is, of course, a different question but, please rest assured they can distinguish between a good value for money+fair profit margin and a rip-off. Just a consumer’s point of view, in full support of young designers because you help make our lives beautiful.

    • MasonBentley

      Thank you Lia. It is very hard not to feel intimidated by the big brands with their power and kudos, particularly when we are asking people to part with similar amounts of their hard earned money..hence the need to write this post to shed light on our costs. I do believe the clothes we are creating are very special – and we intend to offer our customers a very personal service…there will be a choice of colour on each item, because they are made to order we can offer a bespoke fit on lengths etc and they way we design, the clothes will be timeless in the sense that future clothes will be designed around them..we are already looking into trousers/skirts/coats and capes that will all work together…fingers crossed we can pull it all off..it we do, it will be truly exciting! xxx

      • Lia in Brussels

        Indeed it will… I’m looking forward to share these exciting times with you, albeit from a distance, and Gosh! I sure hope I’ll be able to afford at least one of your fantastic dickies!

  10. LoveLyndaLovely

    Interesting and thought provoking read. On the education front, sadly it’s not just the “cheap” retailers that produce goods in Bangladesh. There are upscale brands manufacturing there and profiting from those practices. I think as you say, as with food, it is up to us consumers to do our research and understand why things are worth paying for.

    • MasonBentley

      It is sad that there are bully companies in every industry that are just out for what they can get. We genuinely believe it is possible to be a Company that is beautiful inside and out. xxx

  11. Laura Lynn

    The fashion manufacturing industry in the US has been decimated by cheap overseas labor and thats not right. We thought ‘free trade’ would help us over here and all it did was allow the Mexican workers to be horribly exploited. Large companies shut down their US based factories and moved them. I can’t say I’ve recently been able to afford high quality clothing, but fortunately I already have many of the basics and I can sew.

    • MasonBentley

      Sewing used to be a skill that was passed down from generation to generation out of necessity. But cheap clothes stopped that as well..it has become, in many cases cheaper to buy cheap than to make. But nothing can beat that satisfaction of turning that 2d piece of cloth into a functional, beautiful, wearable piece of art xxx

    • MasonBentley

      The hours and hours of work and craftsmanship that goes into couture..mindblowing. But we can’t lose these skills – they have to be appreciated – if only by the very few that can afford it, because once the ideas are created they then filter through the rest of the fashion world as the life-blood of innovation. Here’s to celebrating and loving passion, craft and brilliance, in whatever form it takes – it should never be forgotten. xxx

  12. fromtheloftabove

    a really awesome post, and i think that as consumers, it has to stop with us. i found it disgusting when i read walmart and h&m decided to not sign an agreement to provide safer work conditions (citing it was “not economically feasible) and stop using bangladesh to manufacture their clothes – that is NOT the answer!!! i will now boycott buying either of those brands. thanks also for visiting my blog!

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    • MasonBentley

      There’s a book published by Lid called ‘Business beautiful – The Hard Art of Standing Apart’ by Jean-Baptiste Danet, Nick Liddell, Lynne Dobney, Dorothy Mackenzie and Tony Allen..it’s about the stories of companies that have been inspired by beauty of all kinds – aesthetic, ethical, scientific and more. It illustrates that the search for excellence is possible, although it adds another layer of work in a highly competitive world..It’s a companies choice whether that works for them. xxx

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  17. Red Point Tailor

    Absolutly awasom post!
    I am thinking of starting my own sewing label and facing the same questions/issues as you are/have been. Based on my education I know how much time/efforts it costs. There is a lot to be change in human behaviour to make people aware about all aspects you wrote above, i.e. where the clothes are made, in what conditions, etc.
    Success with your undertaking!

    • MasonBentley

      Thank you. I don’t know if you are aware but even the big brands are looking into ‘making British’ again..and even they, with their volume are having to hike their prices..I for one will be watching with interest. The very best of luck with your ventures..all I can say is doing it is better than never knowing.. xxxx

  18. smartashy

    We often talk about this stuff in my uni course, really interesting read! Keep up the great work! X