Lingerie for the 1 Percent
By Katie Little
Designed with 24-karat-gold thread, an ultraluxe lingerie line has entered the vast intimate-apparel market to fill a void in the underwear drawers of the elite.
Sascha Hertli, chief executive of Rococo Dessous, discovered the missing sparkle while a consultant in oil-rich Qatar. Speaking to private banking clients there, he realized the wealthy's love of all things gold was going unfulfilled in the under-there department.
After moving to the U.S. and enrolling in Columbia Business School, he teamed up with former Victoria's Secret designer Breanna Lee to launch the first fashion line using gold thread sourced from Switzerland, according to the company.
“The materials are surprisingly soft and durable,” Lee wrote in an email. “Most gold fabrics to date [have] been plated, but ours is unique in that it is woven within the thread. This creates a soft fabric feel, not metallic, and comparable to sewing a taffeta or other embroidery.”
Such opulence doesn’t come cheap. Sets start at $1,500 and top out at about $6,000, depending on the level of embellishment.
Hertli chose gold over other precious metals because of its importance in his target markets of Russia and the Middle East, both of which have large concentrations of high-net-worth consumers.
"Gold has a very specific symbolism as opposed to other metals,” he said.
“Platinum might have a higher price, but it’s not as highly valued as gold,” Hertli said. “Historically, in their cultures, it would have been used as a place to store value.”
Each piece contains 10 to 20 grams of gold, worth about $419 to $837 as calculated using the spot gold price Monday.
Gold is trading at about $1,300 an ounce but has gone as high as $1,900 within the past two years.
What will happen if prices spike again?
“Adjustments of plus or minus 20 to 30 percent—we would leave the prices as they are,” Hertli said. “If gold were to go 50 percent higher, the items would probably become 10 to 15 percent more expensive.”
The line's launch follows a boom year for luxury merchandise. Last year, global sales of personal luxury goods rose 10 percent, to an estimated $281.3 billion, the third straight year of double-digit growth, according to a study by Bain & Co.
Separate data from the NPD Group show that intimate apparel is also growing. Sales in the category rose 2.3 percent in the year ended May, to $10.81 billion, compared with the year earlier.
The typical buyer depends on the region. In the conservative Middle East, for example, undergarments are a private matter, and the primary shoppers are women. But in Russia, the Rococo Dessous customer generally is a man.
The brand's collection is sold mainly at trunk shows and pop-up stores, including two boutiques in Monaco and one in the south of France. Its bridal collection was showcased this past weekend in a runway show during New York Lingerie Fashion Week.
Rococo Dessous is talking with several department stores about carrying the line, including Harrods and Selfridges in Europe, Bergdorf Goodman in the U.S., and Saks Fifth Avenue, Macy's Bloomingdale's, and Harvey Nichols in the Middle East, Hertli said.
Hertli also is considering creating lower-price items for those with shallower pockets but gilded aspirations.
"We know especially the department stores would like us to do that," he said. "But it's unclear how to do it in the best way. Is it just decreasing the amount of gold or coming up with an entirely new product, like an accessory?"
Despite a shaky global economy, Hertli said he has little concern that demand for luxury goods will fluctuate much or that his clients will have to choose between a gold bra and panties or other high-end goods, such as an exclusive bag or watch.
"These clients usually already own a lot of jewelry and handbags," he added. "It's not that they're making a trade-off between this and another piece of jewelry."
Not everyone willing to shell out more than a grand for these golden items is looking to parade her purchase. That's particularly true in the Middle East, Hertli said, while it's the other extreme in Russia.
"It's a key driver for luxury purchases," he said, referring to the desire to show off items. "What we've seen there is women wearing sheer tops and finding ways to show the bras off."
Pam Danziger, president and founder of Unity Marketing, a market research firm that focuses on elite consumers, said Rococo Dessous's line has the "wow" factor that could entice the wealthy to purchase.
"That's the real challenge now, because there are so many products for affluent people to buy," she said. "Because they're not limited by their checkbook or pocketbook, they can buy a whole swath of products."
Danziger added that the wealthy are typically shrewd shoppers who will buy a luxury item when it matters to them and it has enough value to justify the price.
"That's one of the biggest misconceptions about the affluent—that they're out there looking to spend as much money as possible," she said.