Nov 26, 2010

Lanvin for H&M…Cheaper, just not as much in Switzerland

So I decided to join the raging crowds last Tuesday, in the quest to get my hands onto a few pieces of the new Lanvin collection for H&M. I arrived at the store at 8am (which means I had to wake up a full 45' earlier than I usually do), naively thinking that I would be one of only a few fellow Genevans to have ventured out on a cold November morning on such a 'trivial' pursuit.

Alas, I found myself at the end of a long line of aspiring fashionistas (the most dedicated ones had arrived at 5:30am), all wearing colour-coded bracelets, which 'give you access to 15 minutes of exclusive shopping'. I got myself an orange bracelet for 10:25, went back to the office, sneaked back out in the middle of the morning and went back to the store.

Was it all worth it?? Absolutely…until I actually saw how much our fellow Londoners and Parisians paid for the exact same dresses: £99 = €149 = CHF249…

Why such a huge price difference? Did they calculate their price using the exchange rate of 4 years ago, when the GBPCHF was at 2.5? Could it be higher sales tax? Not really, since Swizerland has a lower sales tax than these two places (7.6% compared to 19.6% in France or 17.5% in the UK). Is it import tariffs on textiles? These are at 800 CHF per kg, this is just a few francs per dress. So it must be something else…

Maybe its simply H&M’s pricing strategy that takes into account the Swiss’ high salaries. To take into account Swiss’ higher salaries, we can calculate the price of the dress in Big Mac, using the famous indicator from the Economist. It turns out that the dress is actually cheaper in Geneva, costing only 38 Big Macs, while in France and the UK, you would need to sacrifice around 44 Big Macs to buy that dress! Still, it’s a good idea to do your shopping in London if you live in Geneva.

Any other interesting theories out there?? One thing is certain though…no matter how much people around the globe actually ended up paying for these lovely items, we can all comfort ourselves knowing that we can always re-sell them on ebay: current top fetching price? $700! Anyone want a lovely leopard mini-clutch???

Written by Maria, with the 'obvious' help of PL


Anonymous said...

Varying markups

BTW: Simonovska (2009) does a similar analysis using data from Zara-online stores

Caroline said...

Though it's more expensive in Geneva I'd always prefer queuing in civilised Geneva than being squeezed and bruised at a London H&M :-)