The True Nature of a First-Class Price — Why Are Brands So Expensive?

Last time, we looked at the era when luxury joined hands with the street and came down to the sidewalk. The collaborations with sneaker and skate culture, the door that Virgil Abloh opened, the logo revived by social media. By lowering its threshold, the brands had instead gained a new frenzy.

This story, which began with an artisan of travel trunks, has at last reached its final chapter. The luxury that set out from a single trunk in 1854 has now grown into a vast industry. Yet at the feet of this swollen empire, several new questions have piled up. Where will the market spread, what conscience will brands be asked to show, and just what is the ‘first-class price’ we pay the price of? Without rushing to an answer, let us survey the landscape from the present to the future together.

A Market Grown Vast, and a Shifting Center of Gravity

The luxury of the twenty-first century has reached an unprecedented scale. A report by a certain research firm states that the world’s market for personal luxury goods has grown to a scale of hundreds of billions of euros, and what has long driven that growth is the presence of Asia, centered on China. It has been reported that the Japanese frenzy traced in Episode 8 was eventually passed on to China, giving rise to one of the world’s largest streams of consumption.

Even so, a vast market does not necessarily mean stability. The tides of the economy, exchange rates, and a high degree of dependence on a single country directly send a brand’s performance swaying greatly. The danger of leaning too heavily on one gold mine overlaps with the memory of Japan’s bubble. Even as the market spreads, its center of gravity keeps ceaselessly shifting.

Conscience as a New Cost

The swollen industry has come to be asked for new responsibilities too. Sustainability.

Symbolic of this was an event in 2018. It came to light that a certain storied brand had been incinerating large quantities of unsold goods to protect its value, and it drew strong criticism. In response to this backlash, the company was reported to have declared that going forward it would not burn unsold goods, nor use real fur. It was the moment that society turned its eyes to the practice of disposal in order to protect scarcity — a practice said to have been not uncommon in the industry until then.

Cost once meant fine materials and the labor of artisans. Now, a new item is being added there: consideration for the environment and human rights. Conscience, too, is beginning to become an element that makes up a first-class price.

Brands Living a Second Life

Another thing indispensable to speaking of the present is the market of resale and secondhand.

Luxury goods once were something that was completed in the hands of the buyer. Yet in recent years, systems for buying and selling secondhand goods in good condition online have spread rapidly, and the world’s secondhand luxury market is reported to have reached a scale of tens of billions of dollars. Among the young generation in particular, it is pointed out that while spending on new goods slows, secondhand serves as the fastest-growing point of entry. Affordable prices, the encounter with one-of-a-kind items, and consideration for the environment — several motives are said to be lifting up this market.

It does not end with buying; the brand goes on living even after it is let go. How to make that second market an ally seems likely to become one of the dividing points ahead.

What Was a First-Class Price, After All?

Having traced 150 years up to here, let us return to the first question. Why are brands so expensive?

The answer is not just one. Fine materials, and the handwork of artisans over long stretches of time. That is a certain price. But what a high price has pointed to was not only that. The story Louis Vuitton placed in a bag, the freedom Chanel entrusted to clothing, the scarcity Hermès protected to the end, the mechanism of the brand that LVMH polished to a shine. At the same time as materials and labor, we have been paying for the story behind them, and for the meaning we give to ourselves who hold them.

So where will luxury head from here? Will a new market emerge to follow China, will sustainability become the center of value, will secondhand and rental replace ownership, will paying for experience surpass things — all of these lie beyond the choices that countless makers and buyers will make from now on. We do not yet hold a certain answer.

The one thing that can be said is that brands are a mirror reflecting the times. What we feel to be beautiful, what we yearn for, what we pay our money for. That figure will shape the next hundred years of luxury.

To all the readers who have stayed with this long story that began with a single travel trunk to the very end, I give my heartfelt thanks. If gazing at light and shadow at the same time has quietly cast back a reflection of our own desires and values, there is no joy greater than this. I will not draw an easy conclusion about the true nature of a first-class price. To keep questioning it itself is, I think, what it means to stand before the mirror that is a brand.

【Empire of Brands: 150 Years of Luxury — End】