The $4,800 Handbag Under the Tree - Another Jolly Season because Luxury Goods - NYTimes.com

Luxury goods are not, of course, necessarily expensive in perfect terms, but they nearly at meaning cost more than the same products by other producers. It is, case in point, equitable as possible to buy a $20 silk knot as a $75 version.

Of way, the shopper ambitioning to purchase 1.7 ounces of Sisley Paris's anti-aging cream ($300 at Neiman Marcus) or the book-size dark nylon Prada knapsack ($570 at Prada stores) -- the required carry-on for East Hampton socialites final summer -- does not worry many approximately how many it costs to make the product. And anyway, your average design-house administrative would run a marathon in her Manolo Blahniks before coughing up that classified information. ''We are uncomfortable even with the question,'' said Christina Kim, a spokeswoman for Hermes of Paris, whose Kelly handbags (middle size) sell for $4,800 at the Madison Avenue boutique.

Nicole Miller ties can retail for $75 apiece. The cost, said a spokeswoman, Meredith Wollins, is partial for of native work by the company's graphics crew that is then hand screened onto the silk in Asia. The By Terry line of lipsticks uses especially expensive dyes and manufactures merely small batches, which, indeed, raises the price.

Public companies have to report gross margins -- the money they take in afterward the costs of production their merchandise are discounted. For a well-run elegance enterprise like Gucci or LVMH or a cosmetic mammoth like Estee Lauder, namely digit usually runs in excess of (occasionally well in excess of) 60 percentage of total revenue. That manner the substantial price of making their material, from sweaters to thigh-high leather boots,Access apt luxury-Tanzanite, namely fewer than 40 percentage of the average price label. (By compare, gross margins at the Gap and other well-run necklace apparel stores rarely rise above 45 percent.)

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Theoretically, that might be true, but if an insists on putting a price on luxury, enough of the industry's secrets have leaked out that it is feasible to acquisition a mini enlightenment.

While maximum Americans would be content with a Sony Playstation 2 or a sweater dual set below the tree, for one increasing number of people mere cashmere does not mention ''I love you'' with quite the same authorization as pashmina. Accustomed to luxury, these new-economy swells expect the maximum valuable version of everything -- and are possible to obtain it.

The economic may be slowing and lots of dot-com stock alternatives are underwater, merely the top slice of proceeds earners is still sitting above a big stack of asset and their free-flowing extravagance is expected to propel such top purveyors of gilded baubles and designer delectables as Tiffany & Company, Neiman Marcus Group and LVMH-Moet Hennessy Louis Vuitton into but variant banner fiscal year.

But high price is part of the appeal, and these products are charted to mess the sub-lobe of the head that makes cost-benefit measurements. The darkly shiny eye powders of Chanel or an aesthetic, logo-encrusted satchel by Louis Vuitton seduce in ways cheaper options cannot: they cost more, but who can put a price tag on that one supplement that makes one feel, for an immediate, Vanderbilt-rich or Sophia-Loren-glam?

Then there is the elusive factor of art. ''The talent to fulfill excellence is something you cannot put a price on,'' said Christiana Monfardini, an Escada spokeswoman.

In moments of reflection, each ample shopper suspects that there is as many art as material in the inconsistency between a Revlon lipstick bought at the pharmacy for $8 and the By Terry counterpart from Saks Fifth Avenue, working for $49. And that the margin between an Omega Speedmaster, which usually retails at well over $3,000, and a $65 Timex i-Control prototype is as attributable to vanity as to quality.

But since nobody would be quite so deflating for this fantasy affair as for a client to detect that a life-transforming cosmetic was really mass produced on a factory ground for $2 (the average industry price for lipstick), luxury-goods companies guard not secret more ferociously than the cost of making their wares.

In truth, many luxury products attempt a class of craftsmanship, materials and service that are steps above what is obtainable for even expensive mass-produced wares. Most high-end leather makers, from Coach to Escada, promise to fix and retain their products for life. They likewise cater other subtle guarantees to the acutely style-conscious -- making bags, for example, in the same fashions year after year, ensuring that a $500 investment today will be chic 10 years later.