Because the price is actually extremely high, and the alternatives are far cheaper
“$280 for an equivalent amount of fiber” is just a lot of money to spend on raw materials for a sweater. Include the overhead of selling luxury goods and you need to be charging ~1,000+$ per sweater to break even. Add in there’s only 200,000 animals worldwide and that’s just not a lot of room for multiple companies to be interested in participating in such an inherently limited market.
The sweaters being discussed cost $9000, which is “$1000+” (I see it a bit under $8k on their website in my country but prices might vary by import duties). I don’t know how fair the comparison to the $280 cost of raw materials is – maybe the sweater weighs 500g, and the article found somewhere near the other end of the chain the price is $560/kg, but it could be that Loro Piana are only taking higher grades of wool and so more than 500g of raw wool would be needed to get 500g after grading, spinning, milling, etc. I suspect the cost of getting enough wool for the sweater to Italy ready to be spun is higher than $560 per kg of finished product, but that doesn’t mean the price the workers get before then is fair.
I spent a bit of time thinking about other ways to estimate costs but didn’t try too hard. Loro Piana sell (woven) fabrics but don’t publish prices on their website.
They might sell a similar product in cashmere for around $3000, of which I would guess $250-$500 goes on the cashmere (maybe a bit less as they spin in house), perhaps another $200-300 on labor and manufacturing, and the rest would be the typical luxury goods mix of profit and a bunch of low volume stores in expensive locations.
I don’t doubt they could pay more or sell at a lower price point, but by fair I am simply talking in terms of market forces. They aren’t using underhanded tactics, just buying an item for what it’s worth.
Yea it's a bunch of different products, "textile division produces high quality textiles from cashmere, vicuña wool, linen, and merino wool;"
I don't know the exact numbers for this sweater. But it takes a alpaca 4 years to produce enough cashmere for one sweater. 200,000 / 4 = 50k sweaters at 20% profit margin on 9k a pop that's 90 million in profit a year assuming they sell everyone at full price. More realistic could be 2/3 to 1/4 of that, though I'm just guessing here. Now split it across X companies and it’s going to be a small market.
