What does home-grown, made-in-the-USA, all-American luxury mean? It’s perhaps easier, when thinking of luxury, to think of Europe - a Swiss-made watch carries a certain cachet, for example. As does perfume and lingerie produced in France, or British wool, German cars, or Scottish whiskies.

 

Instead, the U.S. has for a long time been synonymous with over-consumption, from Black Friday to stack ‘em high, sell ‘em low mass production. Its luxury brands do enjoy well-deserved recognition – for example, Tiffany & Co. and Ralph Lauren – but these companies rely on other countries to source staff and materials, and to manufacture and distribute their goods. Their processes are not 100% American.

But President Trump made ‘buy American’ a campaign issue, and suggests choosing American brands is signifier of patriotism and loyalty. Under his ‘America First’ policy, the new President has urged shoppers and businesses to “buy American and hire American.”

This is easier said than done. Choosing where to purchase your materials and establish your supply chain is always a challenge for any luxury business. The impact on the bottom line of choosing to manufacture in Los Angeles, say, over China is often simply too high for most firms to ignore.

The cost is also likely to get higher, after the number of U.S. garment factories fell 58.2% between 2000 and 2014, according to the U.S. Census Bureau. The American Apparel & Footwear Association says that just 3% of clothing items sold in the US are made domestically in 2017, compared with around 46% in 1997.

And while U.S. citizens may have liked Trump’s rhetoric at the ballot boxes, it doesn’t necessarily mean that it will influence their spending decisions. A 2016 AP-GFK poll found that while three in four say they would like to buy goods manufactured inside the United States, those items are often too costly or difficult to find.  Just 9% said that they only buy American.

Asked to choose between a theoretical $50 pair of trousers made abroad, or an $85 identical pair made in the United States, 67% said they would purchase the cheaper pair. Tellingly for the luxury market, people in higher earning households earning more than $100,000 a year were no less likely than lower-income Americans to say they’d pick the cheaper option. Everyone loves a bargain, it seems.

To counteract this, luxury U.S. companies will have to work hard to show why it’s worth investing in US-made product. Luxury customers generally like to know how their product was made, where it came from and the materials that were used. If businesses can get the storytelling around that right, they may do well in the current climate: luxury customers are used to and often happy to pay a premium for provenance.

 

"The messages sent out on the AW17 catwalks at New York Fashion Week were largely anti-Trump, pro-inclusiveness and pro-women."

 

But Trump’s made-in-the-USA policy may fail before it’s even started when it comes to the luxury market. Many luxury firms, particularly those in the fashion industry, are working hard to disassociate themselves from Trump and his pro-US stance altogether. Fashion by its very nature is forward looking and constantly evolving, and the messages sent out on the AW17 catwalks at New York Fashion Week were largely anti-Trump, pro-inclusiveness and pro-women. They had a global, progressive feel: the opposite of Trump’s domestic, conservative values.

Beyond fashion week, major firms are making statements that suggest the U.S. luxury retail industry isn’t wholly behind Trump, either. Luxury department store chain Nordstrom dropped Trump’s daughter Ivanka Trump’s fashion line in February. In a statement, the $14.4 billion business cited poor sales for the decision.

In his inaugural address, Trump promised U.S. industry would "bring back our jobs. We will bring back our borders. We will bring back our wealth, and we will bring back our dreams." It’s a big promise, and one that will need the backing of the U.S. luxury industry, among many other major industries, if it is to succeed in the long-term. U.S. luxury businesses that choose to adhere to Trump’s made-in-the-USA principle will have a lot of number-crunching, and presumably price hikes, to do. They will also have to clearly demonstrate what an American-made item has to offer above and beyond one made abroad - and carve out a very specific story of what American luxury truly is - if they are to win customers over to this vision, too.   


About the author

Diana Verde Nieto

Founder & CEO , Postitive Luxury

Diana Verde Nieto is the co-founder and CEO of Positive Luxury, the company behind the Butterfly Mark; a unique interactive trust mark awarded to luxury lifestyle brands in recognition of their commitment to having a positive impact on people and the planet, providing wordless reassurance that a brand can be trusted.


Andy Andresen 5 months ago

I think we should not mix politics and business here. I am a manufacturer of a luxury furniture line "Made in Italy". My parts and the respective materials come from all over the world, there is no more a "pure Italian furniture" these days, it is virtually impossible. On top, I could not sell a single piece of my furniture to the average U.S. citizen, American customers would not buy high end priced bespoke furniture from an unknown brand, however exclusive we are. Trumps rhetoric is based on a business model of the 60's and 70's, this is past and over. His own businesses could not survive on "Made in America" and his personal taste is based on the French royal style of Louis XIV. Which is quite funny. This discussion does not lead anywhere I am afraid.


Karen Roth 5 months ago

am a designer of an eco-lux line of resort and loungewear in Sarasota, Florida. 3 years ago as I embarked on this venture, I naively assumed that my brand would catch on with like-minded women who wanted beautifully designed clothing in luxury fabrics - all made by female artisans in the US. I opened my small boutique/atelier in Sarasota in October 2016. In the few short months that I've been open, I have listened to feedback and tried to make sense of how this new admin will affect consumer spending. As an eternal optimist, I know that a market exists for what I am selling - but make no mistake, it is a hard-sale to convince the average American to shell out between $360. and $1350. for silk and cashmere garments. The boutique next to me sells super cute dresses, designed in LA, made in China of cheap fabrics. I watch women come and go all day long with bags of purchases. I'm averaging about 2 items per month so far. It's hard to not become discouraged. However, because most of my garments are pure and undyed (aka "white") many assumed that I was a bridal designer. In response, I am now transitioning my brand to "trousseau and bespoke bridal" with good results. It's ironic that a $1350. silk dress made in the US is considered "inexpensive" for a prospective bride, while the same dress marketed as loungewear is perceived as "too expensive". So, in response to the question at hand - luxury items with a "made in America" label won't fly off the shelves without a back story and some creative marketing. Americans are way too accustomed to getting "designer clothing" at bargain prices through mass-produced retailers who eschew ethics in many cases in the conquest of profit. The focus for luxury brands in the US will have to become extremely targeted on reaching specific, niche markets in order to stay afloat - regardless of the administration. We will also have to be patient, tell our brand stories with passion, and stay true to our DNA - for me this involves collaborative partnerships with local non-profits who serve marginalized populations and not giving way to the temptation to cut costs at the expense of human dignity.


Carol Galiano 5 months ago

I guess Ivanka Trump did not get the memo? She still makes her "luxury" clothing and jewellery in China...


Only LS members can comment