The popularity of $300 designer jeans has faded. Now, a pair costs $200 and maybe less, thanks to the recession. As a result, the fabric of the premium denim industry – so big in Los Angeles – is changing.

Some companies have gone out of business, and the survivors have cut prices and simplified styles. In a surprise development, several have opened or expanded their stores as big retailers cut their stock of high-price jeans.

“Over $200 has become a tougher sale,” said Michael Geller, chief executive of Culver City high-end jeans maker Paige Premium Denim. “We have discovered the sweet spot in pricing, and that’s from $150 to $180.”

During boom times, premium denim companies created a market for $300, $400 and even $500 jeans by distressing them, coloring them with different washes for an antique look and even adorning them with Swarovski crystals. Customers, wanting to wear the same ultracool jeans as 20-something starlets and celebutantes, shelled out big cash for brand names from such companies as True Religion Apparel Inc., AG by Adriano Goldschmied and Diesel.

But industry insiders said only a few big-dollar jeans are selling today.

“We are not selling a lot over $300,” said Michael Ball, founder and chief executive of Rock & Republic Enterprises Inc. “But those will probably always have a customer.”

And for the most part, the 20 or so premium denim makers headquartered in Los Angeles, including public companies True Religion, Joe’s Jeans Inc. and People’s Liberation Inc., have adjusted to the downturn by lowering prices and offering more styles at less expensive prices.

Some that were once well-known in L.A.’s premium denim industry are now memories. Blue Cult, Paper Denim & Cloth and Earl Jean – all once popular with such celebs as Sarah Jessica Parker, Cameron Diaz and Jessica Simpson – have gone out of business. The only remnants: out-of-fashion styles selling for as little as $19.99 on discount Web sites such as Overstock.com.

Although the entry price point for designer denim has shifted down, the denim market overall remains in overdrive. Annual sales of all women’s jeans through August of this year were up 5 percent from last year to $8.2 billion, according to Port Washington, N.Y., market research firm NPD Group Inc.

In fact, industry insiders said the denim market has been something of a bright spot in what’s otherwise been a dismal retail environment because jeans remain a must-have in any woman’s wardrobe.

And the hot look of the moment: simple styles and basic washes that denim companies say are less expensive to manufacture. For example, many jean makers are finding success with the so-called “jegging,” an extremely skinny jean that’s made of lightweight fabric and looks like leggings.

“Denim is a staple,” said Ilse Metchek, executive director of the California Fashion Association. “It’s like buying a new T-shirt.”

Recession success

One premium denim company that’s benefited from offering consumers lower prices is Rock & Republic. The Culver City company launched a limited-edition “recession collection” of jeans in March that retailed around $130 and sold out in two weeks.

As a result, Rock & Republic’s Ball launched another recession-inspired line in August called Plain Wrap. The collection includes jeans, T-shirts and stiletto pumps that range in price from $148 to just under $200. The company’s jeans sell for about $180 to $220.

“It’s a play off when the generic brand, the plain-wrap food brand, came onto the scene,” Ball said. “We said, ‘Let’s have fun and be cheeky in that sense.’”

Citizens of Humanity LLC of Huntington Park caught the interest of retailers and consumers after it began offering a new style for $148, about 10 percent lower than its previous entry point.

The price for William Rast premium denim, which is manufactured by People’s Liberation and touts celebrity Justin Timberlake as a partner, used to be $200. Now, customers can pick up a pair for $165, about 18 percent lower.

Even as the premium denim companies are going easier on shoppers’ pocketbooks, they are facing stepped-up competition from retailers such as the Gap, J. Crew and H&M. Those stores are now offering good fits and styles for less than $100.

The Gap revamped its denim line by designing six styles for women based on body type. The company then developed better sewing techniques to improve the fit and began marketing them as “America’s best fitting premium jeans.” The reinvented line, called “1969” for the year the Gap was founded, ranges in price from $59.50 to $79.50.

That’s been something of a shock to premium denim manufacturers. They’re used to competition, but it’s usually within their own niche and at higher prices.

What’s more, there is such a thing as chopping prices too severely. After all, how “premium” can a pair of jeans be if its price is not much of a premium?

“Status brands should not have an opening price point that is too cheap or goes into another marketplace,” said Jeff Rudes, founder of celebrity favorite denim label J Brand.

Still, high-dollar jeans just aren’t selling like they used to. Luxury retailers such as Saks Fifth Ave., Bloomingdale’s and Nordstrom believe consumers aren’t looking to spend more on a pair of jeans than they do on an iPod. So they have downsized inventories of premium jeans.

Metchek said some big retailers are carrying the brands that are “going to give them the best markdown, advertising kickback or whoever promises the best profit ratio. That’s what it’s all about right now.”

Company stores

As a result, several premium jean makers are launching more company-owned stores. Luckily for them, cheap leases and high vacancy rates created by the weak commercial real estate market have made it less expensive for the companies to do more direct retailing.

That hasn’t necessarily been a bad thing.

“Our own stores have performed better this year than the boutiques and the major department stores,” said Pete Collins, True Religion’s chief financial officer. “In our own stores, we can present the merchandise how we want to.”

When True Religion reported its third quarter results Nov. 3, sales for the company’s branded retail stores and Web site increased 52 percent to $32.6 million. That helped True Religion in an otherwise down quarter; its net income dropped 9 percent to $14.1 million.

True Religion, which has 51 stores and 17 outlets, is opening a 52nd retail store this week.

Rock & Republic’s Ball said he has plans to open at least 10 stores worldwide next year. The company currently operates two stores, one on trendy Robertson Boulevard in Los Angeles and the other at the Encore hotel in Las Vegas.

“Our own stores are one of the reasons why we are doing well,” he said.

Paige Premium’s Geller said the company is in negotiations for a fourth retail space that’s outside of California. The company currently runs three stores, one on Robertson in Los Angeles.

William Rast opened two retail stores this month, one at Westfield’s Century City mall and the other in San Jose, and an outlet store in Cabazon. The company plans to roll out 40 more retail stores nationwide over the next several years.

But in all those shops, will $300-plus price tags pop up again soon?

“They would have to redefine the merchandise,” Metchek said, “and make it platinum or gold, or give it a reason to go up again.”

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