Full Retail Returns to Luxury Stores
Remember the days of 70 percent discounts? Seems like it was only a
year ago when everybody, including luxury department and specialty stores,
were practically giving product away. Well, according to a Bloomberg report,
those days are gone as the well-heeled, and those who wish to dress like them,
shell out full retail for top designer goods.
Lisa Hagen is one of the consumers in question. She told Bloomberg,
"A lot of the high-end designers are at remarkably high prices. I am willing
to pay higher prices and full prices if I like it, it fits my need and I know
I will use it."
"The get-it-cheap party for luxury consumers has ended," Milton Pedraza,
chief executive officer at the Luxury Institute, told the news service. "When
consumers now turn over the product and look at the price, they see that those
days of incredible discounts on luxury goods are over."
Chains such as Barneys New York, Neiman Marcus, Saks Fifth Avenue and Tiffany
are among those rolling up the discount carpet as business improves. That’s
been good news for chains as higher margins boost the bottom line.
Saks saw its gross margins go from 21.2 percent for the quarter ending Jan.
30 in 2009 to 36.5 percent this year.
"There’s no question that an
increase in full-price selling has a positive effect," said CEO Stephen Sadove.
Questions: Has the period of deep discounts at luxury stores come to an end?
Has full retail returned to stores outside of the luxury segment?