Inflation and increased costs of doing business have pushed many brands across the apparel industry to increase their prices. They’ve ranged from DTC brands issuing public apologies to customers before raising their prices a few percentage points to luxury brands bumping their prices up by thousands of dollars.
But with both brands consumers being squeezed by the economic environment — 92% of Americans are reportedly spending less this year — some brands are taking the opposite approach: lowering their prices, in an effort to regain customers who have dropped off to save their wallets.
Wray Serna, the designer and founder of her 8-year-old eponymous brand, Wray, said she’s lowered the prices of all her brand’s goods by 15-20% in the last month. Serna hadn’t raised the prices of Wray’s dresses and womenswear since the brand launched in 2015. The change wasn’t done under the table: On August 22, Wray posted about it on Instagram, explaining the reasoning and responding to commenters. Many questioned whether the quality would change or if the company would be laying off workers or lowering employees’ salaries.
But none of that is happening, Serna said. The only change is that Wray will take a smaller margin on each product.
Serna acknowledged that it’s a drastic and risky move.
“This could be the stupidest thing I’ve ever done, or it could save the company,” she said.
Sales at Wray are down 40% this year. And, after talking to customers through DMs and email surveys, it was clear that price pressure and inflation are the No. 1 reason, Serna said.
“People are just tired,” she said. “A coffee costs, like, $15. Groceries are expensive — everything is more expensive. And yet wages are stagnant. … I just had a deep thinking session about this problem, and I decided that this is what I need to do if I want to stay true to my values.”
Serna called out the companies who are laying off their lowest-paid employees in the interest of cost-cutting, as their leaders continue to make salaries that are multiple times that of those laid off. That, she said, is against the spirit of what she wants Wray to be about. There have been no layoffs at Wray. In fact, Serna said she raised her employees’ salaries across the board earlier this year. Selling DTC only, Wray opened its first brick-and-mortar store in January after growing its annual revenue from $200,000 to more than $3 million in the last three years.
The dresses that Wray previously sold for over $200 will now retail for a little more than $150. It’s a tighter margin, but will still translate to a profit, Serna said. The hope is that customers who have refrained from purchasing in the last year will come back in enough numbers to make up for the lowered margin in the long run and keep the business sustained.
Other brands that have lowered prices recently have cited a more stable supply chain as a factor in their ability to charge less. That includes Keen, a footwear brand based in Portland, Oregon. In June, the company announced a permanent reduction in prices. Keen owns 40% of its supply chain, including its factories and distribution centers.
And sustainable, L.A.-based fashion brand Losano lowered its prices by nearly 30% in July. Losano, like Wray, did so by cutting into its own margins, rather than implementing layoffs or changing materials.
“As a new brand, we are trading in a very competitive marketplace. We made the strategic decision to lower our MSRP so we could reach a broader audience,” said Malinda Behrens, COO of Losano, in an email to Glossy. “Even though the cost of sustainable raw materials is significantly higher than non-sustainable materials, we would rather take a shorter margin than continue to place our brand in the top tier of the active apparel market.”
For Serna, the risk of lowering prices is worth the potential benefit to both the brand and its customers.
“Sometimes when people comment that our clothes are too expensive, my team gets frustrated,” Serna said. “They’re like, ‘Don’t they understand that we already price it so low?’ But people are just tired and they’re mad, and they’re right to be mad. We just have to listen to them.”