Established in 1991 by Sydney-based sisters Nicky and Simone Zimmermann, the brand has evolved into an international juggernaut worn by celebrities such as Kendall Jenner, Chrissy Teigen and Margot Robbie, who wore the pricy Painted Heart sun dress.
Zimmermann no longer participates in Australian Fashion Week, but presents collections at New York Fashion Week and has several glamorous boutiques in the US.
A former staff member speculated on Facebook that the price increases were designed to position the brand as a more luxury fashion label.
"I used to work for them and I asked Nicky Zimmermann why the very simple t-shirt dresses were priced at $190," wrote the former staff member on the Zimmermann Facebook page.
"She told me it's to position the brand at the right point in the market and that if they priced them relative to what they cost to produce then it would cheapen the brand," she wrote.
"They are wanting to sit alongside brands like Chloé or Miu Miu and that is what the customer is paying for."
All Zimmermann clothes and swimwear are marked with a tag that reads "designed in Australia, made in China."
The former staff member argued Zimmermann's new higher prices were unjustified, considering the quality of the clothes.
"If they want such hefty price tags to compete with these brands, people will expect the same quality. Chloe and Miu Miu are made in Italy. I can't see people accepting similar prices for goods made in China," she wrote.
The way brands choose to price their products had nothing to do with the actual cost of making them, said branding expert Mark Ritson, an associate professor of marketing at the University of Melbourne.
"It probably costs about $25 to make a Chanel T-shirt, but they're priced at $500 or more," Professor Ritson told news.com.au.
"With high end fashion and accessory brands, that extra money you pay goes towards the costs of advertising, holding expensive fashion shows and running loss making boutiques in expensive areas."
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Posted by Zimmermann on Thursday, 26 October 2017
Zimmermann had chosen to take a gamble by increasing its prices in the hope it will make a larger profit, even if that meant selling fewer garments, Professor Ritson said.
"They will have lower unit sales but greater profitability. Many companies sell fewer products than others but are far more profitable because their products cost more," he said.
"The real test will be to see if the brand has the capability to play in a premium fashion forward space. Can they achieve sales at this new price point? Will their target market think that's a good price and be prepared to pay for it? We'll have to wait and see."
News.com.au has contacted Zimmermann's representatives for comment.
