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Why Does Streetwear Cost So Much?

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Michael Saintil/ONE37pm

Streetwear brand Noah understands the importance of empowering consumers to make informed purchasing decisions. While one may argue that fashion primarily exists to inspire, to create a loyal tribe and to foster a sense of community, brands like Noah are pushing this creativity-fueled conversation a step further.

To cultivate a deeper sense of connection, Noah is taking its customers through the brand’s sustainability journey. Through educating the public and opening a dialogue as the company continues to implement more mindful practices, Noah takes an active role in shaping its brand identity. 

According to The State of Fashion 2019 report created by management consulting firm McKinsey & Company in partnership with Business of Fashion, radical transparency is set to be one of the dominating forces shaping the fashion industry this year. 

Instead of letting consumers and longtime brand loyalists speculate about Noah’s increasing price hikes, the hot streetwear label took a more direct and educational approach. In May 2019, Noah shared an in-depth blog post on the true costs of implementing more environmentally conscious practices throughout its supply chains. 

We’re breaking down the cost of streetwear in 2019 from the supply chain to the tariffs by following some of Noah's most popular items. 

Radical transparency is set to be one of the dominating forces shaping the fashion industry this year.

- The State of Fashion 2019 Report

noah duck hoodie cost

1. Keeping the supply chain sustainable

In the first piece of the informational series, the brand emphasizes the importance it places on working with ethical factories, which provide laborers with humane working conditions and benefits. For Noah, the quality of the company’s value chain is as important as that of the end product. While the brand’s ethics are its first priority, Noah is highly vocal about the company’s refusal to sacrifice creative freedom to make financial ends meet. Put simply, working with higher-quality factories leads to more expensive costs of goods sold. Therefore, the brand goes on to explain that, logically, it only can absorb these “goodwill” costs to a point. After all, to run a sustainable business, a company must be profitable. 

Giving practical examples to better educate consumers, the Noah team breaks down the production costs of one of its favored items: its sweatshirts. 

The company goes on to explain its mind-set toward pricing and ethical sourcing. When it comes to partnering with a manufacturer, Noah addresses how the brand’s purpose comes before pleasing a majority of consumers. By staying true to their values, the team knows that ultimately they will attract an audience who shares these core beliefs and enables the brand to develop a loyal following.

noah mimimum wage increase graphic

2. Minimum wages for employees

Accountability and ethics are core tenets of the brand. Accordingly, Noah informs us that Canada’s recently increased minimum wage has resulted in higher prices for end consumers. The label enthusiastically supports this initiative and explains how this commitment has affected the retail price of its sweatshirts. With the 22.4% minimum wage increase in mind, the brand discloses that the same sweatshirt sold for $128 in fall/winter 2017 now retails for $148 in the spring/summer 2019 season. 

Noah had two options for keeping prices stable. The first option would be to sacrifice quality and its organizational integrity, partnering with a cheaper factory that is more lenient on garment artisanship and, likely, working conditions. The second strategy would be to ask its customers to support price increases.

noah streetwear cost materials

3. Sourcing high-quality materials

The brand published a blog post on how its fabric-sourcing practices and respective labor costs affect the pricing of its products. Noah is using this series to educate its customers on the financial and business development impacts of creating a more sustainable streetwear label. The brand educates us on its strong (and unwavering) partnership with its Canadian fleece manufacturer. Noah explains that its supplier is one of the only production houses left that uses traditional fleece-milling practices. To illustrate this point further, the brand teaches us that its fleece sweatshirts are engineered with stretch panels for maximum flexibility and comfort. 

Noah discloses that, typically, depending on the fabric used, high-quality and ethical labor conditions account of the highest percentage of a garment’s overall manufacturing costs. 

It’s no secret that the label prides itself on using beautiful and durable fabrics. Essentially, as the brand states in a subsequent blog post on the subject, “the more expensive the fabric, the more expensive the piece—right?”

Noah explains, “If we kept our prices the same, it cuts into the money we take in." Regarding its commitment to breaking down the barrier between style and sustainability, the company continues: “Since we reinvest that money into future seasons, it would limit our ability to keep expanding what we do and taking risks—whether experimenting with new fabrics, making more of things so they’ll stay in stock longer, or doing smaller collections that we’re passionate about.”

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4. Accounting for tariffs

For anyone who has used the internet lately, it’s nearly impossible to ignore the discourse and disrupt on recent international tariff negotiations. In the most recent blog post of its informational series, Noah discloses how this hot-button issue directly affects the company, its bottom line and the resulting costs of its final products. In this article, the company reminds us of its ongoing ties in Canada and how this relationship potentially would be strained if President Trump decided to dissolve the NAFTA agreement, a free trade agreement among United States, Canada and Mexico. 

In addition to other brand-aligning attributes, this trade agreement gave the company a financial incentive to work with its current rugby manufacturer. In this uncertain political environment, the brand expresses its concern with potential tariffs that will affect its manufacturing and distribution costs, in Canada and Europe, respectively.

From these successful and sustainable streetwear brands, we learn that to build a tribe and a long-standing, loyal community, it is essential for fashion companies to stick to their values, embrace their evolutionary trajectories and, most important, to humanize their corporate facades. 

With transparency, comes consumer trust, and with trust, companies can bring integrity to the forefront of this growing industry.

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