Sept. 11 (Bloomberg) -- Luxury clothing makers will have to cut prices to survive as shoppers turn to cheaper producers amid the economic crisis, German fashion doyen Albert Eickhoff said.

Eickhoff, 73, owner of the Eickhoff Koenigsallee department store in Dusseldorf, discovered Gianni Versace in 1976 and organized the designer’s first fashion show. He was also the first German retailer to import clothes from Giorgio Armani and Roberto Cavalli.

“Especially French and Italian fashion makers will have to reduce their prices to stay in the business if you see how fast mass producers such as Zara react to changing trends,” Eickhoff said this week at a business lunch in Dusseldorf.

Retailers such as Inditex SA, owner of the Zara chain, are latching onto fashion trends “faster than horses can run,” said Eickhoff, whose business was founded in 1961 and has annual sales of about 25 million euros ($36 million).

“Trends are changing faster and faster and many customers, especially women, are not willing to pay extreme prices for clothes they can only wear for a short time,” said Klaus Kraenzle, an analyst at GSC Research GmbH in Dusseldorf.

Inditex produces about two-thirds of its clothes in Spain, Portugal and Morocco, making the company faster at introducing new fashions than competitors, such as Hennes & Mauritz AB, whose suppliers are mainly in Asia. It takes an average 10 days for Inditex to bring a design from the drawing board to the shop, according to Richard Chamberlain, an analyst at JPMorgan Chase & Co. in New York.

Pricey

The price of a woman’s dress from the new autumn-winter collection is 2,900 euros ($4,200) at a LVMH Moet Hennessy Louis Vuitton SA store on Koenigsallee, Germany’s most famous fashion street, and 2,550 euros at a Prada Holding NV outlet there. Similar items cost less than 80 euros at Zara and under 40 euros at H&M.

“We can learn from the U.S. regarding the discount policy of their fashion retailers,” Eickhoff said. The rebate practices of Neiman-Marcus Group Inc.’s Bergdorf Goodman New York department store were an inspiring example for him, Eickhoff said, adding that changes of seasonal collections were accompanied by quick discounts of older merchandise.

To contact the reporter on this story: Holger Elfes in Dusseldorf at helfes@bloomberg.net.

Last Updated: September 11, 2009 06:12 EDT