Paper Denim Price Change Revisited

A while back, fashion blogs Millionaire Socialite and Fashiontribes featured posts about Paper Denim & Cloth's decision to lower the prices of their jeans.

Millionaire Socialite noted that PD&C's lowering its prices may push down the prices of its competitors in the "premium" denim market. Fashiontribes built on this and discusses two possible scenarios that may result from the change.

I figured I'd add my thoughts to the mix:

Pricy, premium denim is not on its way out just yet. Rather, consumer preferences are shifting away from the tricked out premium jeans. Specifically, a trend of moving away from embellished, distressed denim (which PD&C and their competitors specialize in) toward plain-pocket denim (à la Acne, Sass and Bide, Superfine, and J. Brand) is emerging. This means that, sooner or later, we should see a remarkable decrease in market demand for the kind of jeans produced by PD&C et. al.

On a graph, this change in consumer preferences leads to a leftward shift of the demand curve for jeans of the type produced by companies such as PD&C, Chip and Pepper, Seven for All Mankind, and Citizens of Humanity to name a few. This is essentially Fashiontribes' second graph.

This process will take some time. Consumers will take time to adopt the new clean denim trend, to find a pair of the new brandless jeans that suit them, et cetera.

Eventually this should force some of the smaller of PD&C's competitors to exit the market or simply scale down. Citizens and Sevens will probably stay strong in coming years as they are very well established and have a loyal following. However, a key component of the value of Seven, Citizens, and PD&C type jeans is the pocket design--which is quickly becoming passé. Thus it's possible that these brands may not last too too long into the future.

What's the lesson? For fashion companies, longevity requires broader foundations than a single trend (such as embellished "premium" denim). Acne's business model seems a lot shrewder than that of Seven for All Mankind or CIH, in that Acne engages in a range of activities, from fashion to advertising to design to film production, and can fall back on these when their jeans go out of style.