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Best Business Commentary
November 23, 2007
Chinese labor, European craftsman prices
Many old-world European “luxury fashion” brands are merely “hawking low-cost, high-profit items wrapped in logo,” says Dana Thomas in The New York Times. We are told that the luxury prices on these Italian, French, and British products are “worth it” because they “are handmade in Europe by artisans,” but in fact many of them are made “on assembly lines in developing nations” like China. How do Prada, Gucci, and their peers get away with this “bait-and-switch”? Some hide the “Made in China” label in impossible places, others assemble the final 10 percent of a good in Europe, and some just import the Chinese workers. “They know better, and so should we.”
Luxury sellers excepted, “that ‘bah humbug’ you hear is coming from retailers,” says Laura Kennedy in Kiplinger.com. November-December sales will probably grow only 2.5 percent this year, compared with 3.5 percent last year, and “any hopes for a strong holiday sales season are fading fast.” Rising fuel prices don’t help, but the big problem is “the tottering economy.” With stocks see-sawing and housing in the tank, “all types of retailers” will be hit. One-stop markets like Target, Wal-Mart, and malls, as well as online stores, will benefit from high gas prices. But with no “superhot” toys or gadgets this year, shoppers have ignored the ample “preseason markdowns” and stayed home.
of The Week magazine.