Palome's Secret: How Off-Peak Production Delivers Lower Prices

“It looks way too good to be true,” wrote one Reddit user. “I was skeptical — the prices are so cheap, I thought it must be a weird dupe brand,” wrote another. “But I’ve bought a few items now, and they’re legit and very good quality. The brand is on point, and before long, they will be huge, I think.” The brand in question is a one-year-old womenswear label Palome, whose tagline is ‘Parisian luxury, honestly priced’. Founder and creative director Liz Morling grew up in Paris and studied fashion prints at Central Saint Martins, and spent the first 15 years of her career gaining design experience at brands including Balenciaga, Pringle of Scotland, Alexander McQueen, Paul Smith, Tom Ford, and Karl Lagerfeld. Over the past several years, luxury brands have raised prices without replacing the entry-level offering. ‘Greedflation’, as some experts call it, has put off customers across the spectrum, pricing many out of the market and alienating more entry-level consumers. Increasingly, customers are looking for brands that demonstrate value. Despite that, anyone shopping for high-quality clothing in natural materials would be forgiven for raising an eyebrow at Palome’s prices. A 100% white cotton T-shirt costs just £20; a mulberry silk camisole £50; a pair of Italian denim jeans £65; a Grade A Mongolian cashmere sweater goes for £70; trenches range from £135-£185. The most expensive item on the site (which is currently sold out) is a £495 wool and cashmere blend belted coat. Palome is able to keep prices low thanks to its innovative production strategy: the brand only manufactures during off-peak factory times, using deadstock fabrics sourced from around the world (denim from Japan, silk from China, cashmere from Mongolia). “I was working with luxury brands and building relationships with factories, and I realised that there is a downtime,” explains Morling. Factories tend to know some of the “downtime” periods in advance, but in other cases, Palome makes the most of quiet periods that arise due to last-minute changes in a factory’s schedule. “If you don’t mind being at the back of the queue and waiting, it brings the prices down quite a bit. Because we’re not ordering huge quantities, we could also get these [orders] at a better rate.” The production model is not without challenges. “We are at the mercy of most factories. We work in partnership: they tell us what’s available, and we create what we can around that — so we don’t dictate the materials,” explains Morling. Customers may end up disappointed about a lack of availability for certain items, which the brand has to manage. Production delays and unpredictable shipping windows can also be detrimental for seasonal items like jumpers. But for the most part, Palome’s designs are intentionally trendless. “Our calendar is slightly skewed,” says Morling. “The lead times can sometimes be very short, and that’s why we have a model where every two weeks, we drop a few pieces that we’ve ordered in small quantities. That’s why they sell out quite often. But a lot of people don’t mind waiting if they know they’re getting good products.” Palome’s margins also aren’t as high as they could be, Morling admits. “I want to keep the pricing really transparent and honest,” she says. Each item on the website has a breakdown of the pricing. For instance, the £70 cashmere sweater cost Palome £55 to make: £18 for materials; £15 for manufacturing; £11 for warehousing and shipping; £8 for duties, fees and taxes; and £2 for packaging. The brand declined to share its annual revenue so far. But Morling does have a strategy to improve margins without having to drive prices up. “We’re planning to add more factories worldwide. We just need to create more volume,” says Morling. Right now, the company works with around 20 factories. So far, they have responded well to the alternative model. “They’re interested because it’s a partnership — it’s not us telling them what we need and trying to cut their prices, it’s them telling us what’s available and when they have downtime that we can fill,” says Morling. As volumes expand, the brand will be able to take advantage of economies of scale and lower costs even more. “I don’t think the model needs to change much, except maybe slightly longer lead times so we can plan ahead more.” The brand has caught the attention of the family of a major European fashion brand (which Palome declines to name publicly), who has invested an undisclosed minority stake in the company. This investor is introducing Palome to new factories and contacts to help expand its network. Palome also has a group of other investors who hold small stakes. Its team is made up of around 40 people globally, split across South Africa, China, London, and Paris. Palome’s investors — and Morling herself — have high ambitions for the brand. “I think they’re really going for this to be a £1 billion business,” says Morling. The next step for Palome is to focus on consumer education. On Reddit, some users had questions about what it means to produce during downtime, and how exactly the prices could be low without sacrificing quality or ethics. Palome has been hosting client dinners to build an in-person relationship with its customer base. Morling brings some of Palome’s garments to the dinners, but the next step is to host a pop-up so people can see the quality, she says. Wholesale is mostly off limits, or restricted to partners who are open to buying off-season. The brand is also working on educating customers on how to look after natural fibers (particularly if it’s a customer’s first time buying cashmere, for instance). Morling is also hoping to expand into new categories (leather goods are in the works) and expand the size range. “I want people to be more aware of the brand and how we work,” Morling says. “I want people to be able to access good quality pieces that are accessible — and from a brand that feels like it has more of a face to it than the giants, a brand that’s warm and feels more human.”