High-end denim holds up to recession
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Kai Ryssdal: One of the many through lines of the retail story this recession is at the high end. Luxury products that people could conceivably live without. Go figure this one out but that logic doesn’t seem to apply to top-shelf jeans. Marketplace’s Jeff Tyler explains that premium denim is selling well.
JEFF TYLER: Recession? What recession? In the third quarter, premium denim maker Joe’s Jeans increased sales by 16 percent compared to last year.
TIM Malloy: Throughout the recession, they’ve done pretty well.
That’s Tim Malloy, a mutual fund manager with John Hancock. His fund owns about 8 percent of Joe’s Jeans. Malloy estimates that the market for premium denim is worth about $2 billion. And other companies, like True Religion and Citizens for Humanity, are also competing to sell expensive blue jeans.
But while demand for other luxury goods has waned, Malloy says the market for denim is steady.
Malloy: At the end of the day, women want to look good, so they’ll find a way to pay that amount of money in a recession. Apparently, they are cutting back on other things.
The jeans cost around $150 each. In a recent conference call, Joe’s Jeans CEO Marc Crossman said women may be more sensitive to the price tag than men.
MARC Crossman: The men’s side had a lot more traction.
Crossman says the company has enough traction to expand and will spend money to increase the brand’s profile.
Crossman: We’re actually going to start advertising a little bit more heavily in the fourth quarter, and certainly in 2010.
This year, Joe’s Jeans plans to open eight shops in France. In the U.S., the company will add five mall locations next year. So, as long as the fashion lasts, high-end denim stores will be among the few retailers that are hiring more employees.
In Los Angeles, I’m Jeff Tyler for Marketplace.
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