Who Pays $15,000 for a Dress?

How couturiers turn a profit.

Strutting like Tut

On the fashion runways in Paris last week, the house of Dior presented outlandish Egypt-inspired clothes that few women can afford on gangly, exquisite models that few buyers resemble. With prices for a dress running from $15,000 to over $100,000, how do designers make money selling haute couture?

Actually, they don’t. Couture is not a volume business and, on its own, would not even be a financially viable one. To begin with, most of what is shown on runways during fashion weeks around the world is not haute couture but prêt-à-porter; couture is only shown in Paris and even there only by a few fashion houses. Prêt-à-porter (ready-to-wear) is an industrial product, manufactured in bulk to sell to the masses, or at any rate to the upscale boutique shopper. By contrast, haute couture is an artisanal product that is cut, sewn, embroidered, and beaded by hand in a regulated atelier. Each piece of couture is unique and, depending on the amount of embroidery or beading to be done, can require up to 150 hours of labor to produce.

The couture tradition was founded in Paris in 1858, and it remains, in its reliance on craftsmanship and indifference to economies of scale, a characteristically French endeavor. The Chambre Syndicale de la Haute Couture, the governing body that oversees the couture business in France, enforces archaic and unyielding regulations—defending tradition and, in the process, driving most practitioners out of business. To receive official designation as haute couture from the Chambre Syndicale, a fashion house must employ 20 or more full-time skilled technicians in France and produce a minimum of 50 new designs for day and evening wear in each of the two fashion seasons, although the conditions are somewhat looser for new houses that wish to start producing couture.

The result is an almost perfect mismatch between an extraordinarily high and inflexible cost structure, on one side, and a perilously uncertain revenue stream that is dependent on how a tiny community of buyers responds to that season’s designs. The biggest markets for couture lie in the United States and the Middle East, and there is particular demand for wedding dresses and other custom pieces never shown on runways. Couturiers also have a few traditional European clients, including the French president’s wife. If a house’s couture show flops one season, it costs them a fortune; even when it’s a hit, the $15,000 price tag on a dress may be too low to recoup costs. No surprise, then, that there were over 100 couture houses in 1946 while today just over a dozen survive.

But couture does survive, even at a loss, because it serves two other purposes for the houses that produce it. One is that couture represents what the designer John Galliano called the “laboratory of ideas,” where the act of creation is given free rein. Many who watch the coverage of the couture shows marvel that anyone could be possibly expected to wear the extravagant and seemingly uncomfortable designs on display, but couture is not really designed to be worn; rather, it affords an opportunity to try out cuts and styles that can then be incorporated, in more modest form, into wearable prêt-à-porter.

Couture also serves to create a brand identity that rubs off on the perfume, cosmetics, and leather goods—few of them high-design products in themselves—where the profit margins are fat and the real money is to be made. Ironically, many people will buy a $150 bottle of perfume to participate in the lifestyle suggested by the $15,000 couture dress they cannot afford, while in reality the dress was produced in large part to seduce them into paying too much for the perfume.

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