Premium Denim: Strong Today, Here to Stay?

The staying power of high-end denim has been one of the greatest fashion trends in recent history. Some close to the action say they feel good about the category, despite its saturation.

In the '80s, it was video stores. In the '90s, dot-com start-ups. Today launching a premium denim line to cash in on the consumer's insatiable appetite for jeans is a temptation for anyone remotely connected to the apparel industry. As one designer puts it, launching a jeans line is as simple as making eggs and toast: Anybody can do it, but what makes one chef's version a hit is how perfectly every small detail of the recipe is executed.

With hundreds of brands competing for consumers with already denim-heavy closets, could a market meltdown be inevitable? Apparel asked three experts to share their view of life in the denim trenches.

The Designer
"It's a bubble, and everybody's jumped in," says Jeff Shafer, founder of the L.A.-based Jake Agave denim line. "There's way too much supply."
Even so, Shafer is optimistic. He posted a modest $250,000 in sales in Jake Agave's first year. Now four years later, he expects to reach about $4.5 million. "The demand for premium denim shows no signs of slowing," he says.

His success, where so many are doomed to failure, is the result of targeting a very narrow niche. In his case, it's a 35-year-old male who's not a trend follower, but wants to dress in a way consistent with fashion's zeitgeist -- and is willing to pay $170 for a pair of jeans to do so.
Shafer, former owner of the BC Ethic young men's line, gives his target customer high quality and great fit while eschewing gimmicks such as rips and embroidery. "Before you even look at a fabric or decide on a trim, you have to know the market so well that you can see places in the market where products are void."

There isn't much of a void in the lucrative women's contemporary market, which Shafer says "probably has 100 players for every one winner."
But that isn't stopping Shafer from taking a stab at it. He is introducing a Jake Agave contemporary women's line to sell to retailers that already stock his men's line.

There's a symbiotic relationship between denim supply and demand, says Shafer, and if the market is oversaturated, it's because the women's contemporary customer wants to discover new brands on a regular basis.

While that makes for many overnight sensations, it also makes for many one-hit wonders. Shafer says the buzz over brands such as Yanuk and Earl Jean just a couple of seasons ago has been snatched up by new players such as Antik Denim and Paige Premium. The sustained success of Seven For All Mankind, one of premium denim's earliest smash hits, is both rare and impressive, he says.

The difference between the denim craze of today and the "Nothing comes between me and my Calvins" era of the early '80s is the distinction between marketing and advertising. The Sergio Valente/Calvin Klein years were driven by a signature look and bulbous ad campaigns, while today's brands are driven by differentiated product, word of mouth and other forms of promotion. For the consumer, this has helped foster an attitude of connoisseurship.

But even connoisseurs love a bargain. Retail chains such as Express and Banana Republic are making it tougher for independent designers to keep their slice of the pie. Indian and Chinese denim finishing houses are replicating the fashion-forward styles born in downtown Los Angeles, and at a fraction of the cost.

"But as long as designers continue to evolve denim and make it new and fresh and different, and as long as other designers don't invent something to steal the thunder, [the premium denim trend] will continue," says Shafer.

The Retailer
In 2004, loyal customers of the boutique Indigo in L.A.'s affluent Brentwood neighborhood had an almost "insatiable appetite" for premium denim, says owner Rob Keirstead. Some customers came in for it almost weekly.

But when the leading brands he carried raised their prices from $135 to $190 for what Keirstead calls essentially the same jean, customers began to show resistance, and their purchasing frequency dropped off.

Still, after this initial sticker shock, consumers have come to believe that $175 is what a "good" pair of jeans costs, Keirstead says.
Fit and fabric make for brand loyalty, and Indigo has found consistency with lines such as Adriano Goldschmied, People's Revolution, Fornarina, Chip & Pepper and Paper Denim & Cloth.

Indigo's premium denim sales have stalled since late spring of 2005. Customers have told Keirstead that they already have 20 pairs of jeans in their closets, 12 of which they haven't even worn yet. In response, Keirstead has cut back on his buying, and orders only specialty washes, skipping the basic washes.

The Analyst
There is an impending upheaval for the denim industry, says Thomas Ahmann, consultant to Bossa Denim, a Turkish textile mill, and featured speaker at last year's Sportswear International "Premium Jeans Forever?" summit. That upheaval will occur when fashion, the great dictator, commands that women's pants-rises go up, rendering low-rise jeans, such a large part of the denim market, as obsolete as square-toed shoes of the '90s. "It will happen," says Ahmann. "It's just a matter of time."

Until then, however, "the market is still very, very strong. But certainly there are too many players," he says. For premium brands to survive, they must carefully target their market, and ensure that the consumer continues to perceive their brand as a status label. "Because that's what we're selling: Status," he stresses.

Many mid-tier brands, such as Tommy Hilfiger, watered down their status by offloading product to retailers such as Costco, says Ahmann.
The push for denim variety will intensify, and there are strong indicators that black denim will make a comeback in the fall 2006 season, he says.
In almost every corner of the world, denim has become acceptable attire for almost any occasion. As to whether this trend shows any signs of going the way of seventies' polyester, Ahmann says: "Absolutely not."

"We're into a very casual lifestyle," he adds. "It's been getting more and more casual for the past 50 years. I haven't seen anything that tells me it's going to get more dressy."

 Christian Chensvold is a Los Angeles-based free-lance writer specializing in business, fashion and the luxury lifestyle.