I'm going to disagree a bit. As in many things, the first order of magnitude is a huge jump in quality. After that, the curve drops away.
In clothing the jump from say $5 to $50 is huge. The jump from $50 to $500 is generally quite noticeable, but the marginal increase in utility probably may not be as significant (sometimes it is, though). A jump from $500 to $5000 is generally subtle and is generally signalling behavior except in rare circumstances (men's suits spring to mind--the jump from $500 to about $3-4K feels quite astonishing).
Other goods have a similar curve at different points. The jump in quality from a Stratocaster-type guitar from about $100 or so to $500 is generally an astonishing jump in quality. The jump from $500 to $1000 is generally quite noticeable even to amateur guitar players. The jump from $1000 to $2000 is generally nice, but quite a bit more subtle and you probably have to be somewhat decent at guitar to notice. Above that, and we're back into signalling behavior territory with very marginal increases in actual utility.
I feel like you've never owned nice clothing before then.
In every conceivable way, my $500 jacket is nicer than my $50 one. It's noticeably better quality of build, has lasted far longer, looks much better, and is absolutely much nicer.
That being said, it is absolutely possible to spend $500 on clothing which is identical to $50 or $5 variants. That's why you need to do some research before buying.
Luxury goods are not intrinsically bad deals. Probably my favorite purchase ever is a Briggs & Riley suitcase. I've been using it and abusing it for a decade and it still works perfectly.
As mentioned already the quality of the construction and materials is markedly different when you go up the price range. But also the fit and style changes. Mass market clothing targets those with an average body shape whereas in the upmarket stores it will target those with a more model style shape i.e. thinner and taller. For example 99.99% of Americans would simply never fit in the Hedi Slimane era of Saint Laurent clothes. Also the styles such as those from Alexander McQueen are more adventurous which most people would feel uncomfortable wearing.
Wine is experienced the same regardless of age, gender, social class, body shape etc. And you don't feel like an idiot when you are drinking an expensive bottle.
Let me give you a comparative example. I have a few Bally sweathers that I picked up in Geneve in 2000, and they are practically in the same condition as the day I bought them. (And I should add that I have been wearing them every winter season.) Ditto for a couple from Agnès B. circa 2004ish before their men's line went down the drain (imo). In contrast practically every "practical" sweather that I have ever purchased balls up after just a few wearings and turned out to be a waste of money.
Nothing beats quality clothing. You pay more but you get "utility" & style for years.
Really? I have some ~£20 sweaters that I've been wearing at least once a week for a few years, and yes they're starting to get holes in them now, but it's still a lot more than "a few wearings".
Even small marginal price increases affect sales volume and costs, which has a huge impact on p&l.
Niche high quality brands need high style to justify the cost. Once in awhile you'll find super high quality product at a low price point, but that's almost always an aberration that will be "fixed" in time.