I think part of it is that people aren't reading it and thinking "oh, I'd been wondering what lamp to get for about £400, maybe I'll go for that one", people read it and think "oh, that looks pretty" and then move on. It's kind of like Top Gear not really being for people who want to know what car to buy.
The fashion thing pretty much has a "stuff you can actually afford" section to complement the "stuff that you'll never be able to afford but might look out for high-street knockoffs of" bit.
Also, I think the demographic probably is richer than you think but without neccessarily all being hedge fund managers - eg middle class professionals whose kids have left home and who've paid off the mortgage. I dunno.
In any case, there's definitely a fairly comical divide between the editorial line and the pragmatic stuff they do to stay in business...