Affordable luxury?

FASHION: Opening a huge, new designer shop in New York during a recession may not seem like a good business strategy. But it works for Tommy Hilfiger . The American clothing designer’s company is thriving, as are other mid-range designer labels.

“We are positioned very well with accessible, affordable luxury,” Hilfiger told The New York Times, “and this is something we have been doing for 25 years.” Hilfiger’s new, 2,000-square-metre Fifth Avenue store opened in mid-October.

Another designer success story is the Tory Burch lineof clothing. Started in 2004 by New York socialite Tory Burch, the label sells dresses from about $365 to about $1,695. Celebrity customers include Cameron Diaz and Jennifer Lopez.

"I wanted beautifully made but accessibly priced clothing," says Tory Burch.

“When I was researching my business plan, I came up with the idea of what was missing from the market,” Burch says. “I wanted beautifully made but accessibly priced clothing. Since I had worked in the business, I knew what kind of margins and markups were being made.”

Tory Burch clothing is mainly produced in China. Sales for 2009 are expected to reach around $200 million, and the company has expanded throughout the US. A shop opened in Milan in 2008.

“There is this white space between major designer collections and contemporary lines,” says Robert Burke , head of Robert Burke Associates, a luxury consulting company. “Designers like Tory Burch, Phillip Lim and Alexander Wang are filling that gap. These collections provide their own great creativity at a great value.”  In Paris, Printemps , the largest department store in the world, plans to decrease its spending on high-price designer labels and increase its spending on middle-range, or “bridge”, collections for the spring season, according to Tancrède de Lalun, general merchandising manager for womenswear and menswear.