Dior Bad

How Much? The Dior Markup

The expression “a sucker is born every minute” applies to luxury fashion these days.  Paris label Dior knows the world wants to belong to the bourgeois club.  Buying an expensive handbag is an arm reach into another social circle.  Emotions of supreme consumption in boutiques satisfies those temporary upward mobility urges was not lost by the fashion’s profit driven machine.

The world’s largest opulent entity, LVMH, learned how to make the desirable more accessible by making it more scarce while producing cheaper products.  A business model earning billions every year. 

When the Italian authorities announced the seizure of a factory producing Dior bag in sweat shop conditions.  Many laborers were illegal.  Beds were in the factory enabling 24-hour production.   According to reports the production site was sourced to produce handbags for the French brand.  Certainly, raised eyebrows hit the ceiling after the announcement of the cost of producing one handbag, 57 euros. The more surprising news is the end price for the aspirational buyer, 2750 euros.  That is a markup of nearly fifty times the production cost. In comparison, an Apple iPhone’s markup cost is double the manufactured price.

Admittedly, this author was not shocked by the news.  During Pitti Uomo, a tannery colleague with a factory located in the same area of LVMH’s facilities told me there were many questionable production techniques involved in the company’s workings. This is not the first time Louis Vuitton has been hit by authorities concerning production. In 2010 UK Advertising Standards Authority banned two misleading ads concerning handmade bags when in reality they were machine made.

At the time of writing the seized factory is under control of the prosecutors.

The next time gazing in front of a Dior window with frivolous desires, remember the quote: “People don’t want the truth because they don’t want the illusions destroyed.”