Trying to adjust to the new environment, designer Giorgio Armani, one of the biggest names of the 1990s, now sells $150 customized ties for men, with a choice of fabrics, lapel widths and lengths.

The mighty Louis Vuitton brand, which racks up annual sales of $3.5 billion, became a luxury powerhouse thanks to the prestige attached to its LV logo, which can be found on luggage, handbags and wallets. As the brand became ubiquitous, Louis Vuitton-owned by Paris-based LVMH Moet Hennessey Louis Vuitton SA-has to retain its exclusive cachet by introducing limited editions. To goose the image of its cartoon-print Murakami bag, which racked up sales of more than $300 million last year, LVMH produced runs as small as 100, 200 and 1,500, costing up to twice as much as the company’s standard offering.


At the boutique end of the fashion scale, some are benefiting from the confusion. Struggling, upstart designers, who had a hard time getting floor space in stores, are now sought after for the exclusive imprimatur they carry. Designer Benhaz Sarapfour received high marks from fashion cirtics for her vintage-inspired styles for women but for years was ignored by store buyers. "You're charging Yves Saint Laurent prices and nobody knows who you are," Ms. Sarapfour recalls being told.

Over the past year, Ms. Sarapfour has signed 12 retail accounts. Neiman Marcus Group Inc. began carrying her designs two years ago and pushed her clothes in its catalog, a rare honor for a small label. "Competition is such today that by having new designers, we’re giving shoppers more options. It’s the only way for us to distinguish ourselves," says Joan Kaner, Neiman Marcus’s fashion director.

Neiman Marcus, which is based in Dallas, has also added upstarts such as Zac Posen, Derek Lam and Alice Temperly, showcasing them in its direct mailings to high-end customers. Shoppers previously looked at only the top 10 or so designer names carried across the marketplace. Now "they’ve broadened their scope of what’s acceptable," Ms. Kaner says.

Some retailers appear better suited to the new landscape. Anthropologie, the fast-growing boutique-style chain of 60 stores operated by Urban Outfitters Inc., Philadelphia, doesn’t carry department-store labels. Alongside its own lines, it features about 100 outside designers, many of them relatively unknown. Each store is different; most carry a look of dilapidated grandeur. Anthropologie’s current catalog features a $188 brown corduroy A-line skirt decorated with a patchwork of cabbage rose appliqués.

But even here, reacting to the customer is always a hit or miss proposition, says Anthropologie President Glen Senk. ‘We don’t get it right all of the time."


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