Ben Hunter and Katie Regan are the kind of couple that could easily be featured in a Banana Republic ad, reveling in their romance, youth, and comfortable clothes.

But the pair left Banana Republic's Greenwich Village store empty-handed last Sunday, perplexed by an unexpected new presence in their favorite chain: the first outpost of the new upscale BR Monogram concept. Here, a woman's suit jacket commands a 40 percent higher price tag than at Banana Republic, and floor-to-ceiling curtains obscure the cash registers, the better to minimize the unseemly intrusion of raw commerce into a silk-and-cashmere cocoon.

"A little too hoity-toity was the general feeling," says Hunter, 23.

While no retailer would phrase it that way, hoity-toity is exactly the idea. Three major specialty-apparel chains—$2.4 billion Ann Taylor; $1.3 billion J. Crew Group; and $15.76 billion titan Gap Inc., which owns Banana Republic—are all pushing new, higher-priced upscale collections. Fast on the genteel heels of BR Monogram, the first J. Crew Collection store will open in Manhattan on Madison Avenue and 79th Street this summer. J. Crew is aiming highest of the three, offering limited-edition products—such as a $3,000 jacket with French sequins in various shades of tortoiseshell hand-sewn into silk chiffon—that are already available online.

"It's about finding and using the best designers and craftsmen, fabrics, mills, and factories in the world to create the highest quality products possible," says Mickey Drexler, C.E.O. of J. Crew Group. "It is not about putting a label that just says 'Collection' on our clothing."  

For decades, midpriced specialty stores have done well churning out khakis, sweaters, jeans, and suits at lower prices than designer equivalents in department stores. But with the luxury tier of fashion performing better than midpriced merchants during the last few years, humbler fashion chains have been coveting that Italian hammered-brass ring. Catching hold can mean higher profits—getting consumers to step up one price point can improve the gross margin by 10 points, notes Michael Silverstein, a Chicago-based senior partner at the Boston Consulting Group and co-author of Trading Up. And, of course, as any consumer of luxury items knows, there's simply the snob appeal.