In the News: retailers limit Purchases of designer purses
January 22, 2023We have all seen it when looking at some big on the internet retailers (Saks, Neimans, etc); a limit put on the amount of bags we can buy. have you ever believed why there is a limit? An article in yesterdays new York Times gets down to the bottom of why there is a limit on these goods, as well as much of it has to do with the weak dollar. all of us understand the dollar is weak, we see it when we travel, we hear it on the news, it impacts us. however for all of the purse aficionados it is affecting us more than we know. In February, high-end brand Hermes will have a much larger than usual cost boost (rumored to be around 12% which is absolutely insane) since of the weak dollar. While it is just part of the iceberg, the us dollar being so weak does impact what occurs to the designer market. This is a extremely fascinating checked out below:
Article via NYT as well as writer Eric Wilson
FOR products that are truly in demand, like Wii game consoles, tickets to the super bowl or cans of corn Niblets on double-coupon day, it may seem reasonable to limit the number a client can buy at one time.
But visitors of the fine print on the web sites of high-end retailers like Saks fifth Avenue, Neiman Marcus as well as Bergdorf Goodman may be surprised to find that such a policy likewise now applies to designer handbags, like Prada’s latest ruched nylon styles, which expense $1,290; Bottega Veneta’s signature woven leather hobos, at $1,490; as well as the new rectangular Yves Saint Laurent clutch that appears like a postcard addressed to the designer (with a $1,395 stamp).
“Due to prominent demand,” prospective shoppers are warned, “a client may order no more than three units of these products every 30 days.”
Popular, the bags may be. however exactly how many of the clients who can pay for them truly want more than one, or for that matter, three?
On its face, the policy seems odd; that is since it truly doesn’t have anything to do with prominent demand. Rather, it is the fear that foreign buyers, taking advantage of the seriously weakened united states dollar, will hoard the bags, then resell them in Europe or Asia, where the exact same products in Prada as well as Gucci stores generally expense 20 to 40 percent more. The prominent Yves Saint Laurent downtown bag, which is restricted to three per client at Saks fifth Avenue as well as Bergdorf Goodman, costs $1,495. At Harvey Nichols in London, the exact same bag is £910 (or about $1,796).
Foreign tourists who are treating American department stores as if they were a nationwide outlet sale have largely been viewed as advantageous to retailers, as well as by some estimates those shoppers were the only bright area in what was otherwise a feeble holiday sales season. however that costs power has not been so welcome to high-end business like Gucci as well as Prada, which have spent the last decade trying to reach those clients in their house countries by opening costly new shops throughout Europe as well as Asia.
Now those business stand to experience a sting from progressively informed comparison shoppers, if not a more serious strike from a gray market of designer products resold from American stores.
Ron Frasch, the chief vendor of Saks fifth Avenue, which has 54 stores across the country, stated the number of foreign shoppers trying to buy several products in stores was “pretty minor,” however he added, “it is definitely an problem that we watch.” Besides restricting on the internet sales, Saks may reject a customer’s purchases of duplicate product in stores on a case-by-case basis.
“What we try to do is utilize a great deal of logic as well as typical sense if we sense that somebody is taking advantage,” Mr. Frasch said. “We screen at the store level as well as at the business level for any type of patterns. We are extremely sensitive, very first as well as foremost, to serving the customer, however secondly to any type of prospective for reselling by customers.”
Ginger Reeder, a spokeswoman for Neiman Marcus, stated its on the internet policy applies to specific bags as well as shoes offered from designers who asked the business to limit sales.
“We work with our vendors,” Ms. Reeder said. “It’s primarily a security for them, to protect their distribution from bags getting available on the gray market.”
For now, the policies of Saks, Neiman Marcus as well as Bergdorf Goodman apply only to on the internet sales of purses as well as shoes from Prada as well as the Gucci group labels (Gucci has Yves Saint Laurent as well as Bottega Veneta), however not other high-end brands like Dior or Givenchy, which are had by the contending fashion conglomerate LVMH. Meanwhile, LVMH offers its Louis Vuitton purses on the internet only on its own site, www.eLuxury.com, where the policy is even more strict: two of each style per customer, per calendar year.
There are no specified limitations on buyinginside the 39 branches of Neiman Marcus or at the company’s Bergdorf Goodman store in Manhattan, Ms. Reeder said. however a sales partner at Bergdorf stated this week that the personnel was instructed to utilize discretion with clients looking to buy a big number of items. A salesman at the Louis Vuitton store across the street stated a client trying to buy more than two bags would be asked to provide a reason. Both spoke on condition of anonymity since they are not enabled to speak to reporters.
None of the makers of the designer brands would speak for the record about such policies, however a number of executives acknowledged privately that they are meant to prevent bags from being resold.
During the high-end boom of 2000 as well as 2001, when shoppers lined up in the street outside Gucci, Hermès as well as Vuitton shops in Paris, the business drew criticism for putting into impact bag-per-customer limits that appeared to be aimed primarily at Oriental shoppers. Some Oriental clients complained they had been banned from Vuitton stores, as well as they might be discovered on the Champs-Élysées offering to pay Western tourists to buy bags for them.
What has surprised some retail analysts is exactly how quickly the idea of quotas has shown up in the united states “” as well as not just for handbags. In its on the internet store, Apple currently limits clients to five iPhones per order.
“This is not an unusual circumstance for designer brands,” stated Claudia D’Arpizio, a high-end products consultant at Bain & business in Milan. “It’s unusual for the United States. What is altering now is the geography of the touristic flows.”
In the ’80s, American as well as Oriental tourists commonly shopped for high-end bargains in Italy, when the lira was weak against the dollar. however since the dollar began its spiraling decline against the euro in 2000, soon after its introduction as the European typical currency, the value-minded tourist tide has shifted to the United States.
Travelers who buy several products to resell to buddies back house are only a little part of the gray market, stated Fred Felman, the chief advertising policeman of MarkMonitor, a San Francisco company specializing in brand protection. It is more problematic when expert networks of purchasers resell high-end products with little shops throughout Asia, or with on the internet retailers like eBay.
Last month, Patricia Pao, an independent retail consultant, shown up at Newark flight terminal from Los Angeles as well as was approached by a young lady who asked her to assist close a suitcase by sitting on it. The lady was returning to Slovenia with what appeared to be 200 pairs of designer jeans, the least costly bearing a cost tag of $228.
“She stated that by selling the denim back house she might not only cover the costs of her trip, however she might likewise make a profit,” Ms. Pao said. “The weakened dollar makes whatever right here look like a bonanza.”
As anecdotes about foreign shoppers flocking to buy electronics, toys as well as Manhattan genuine estate ended up being more common, analysts are debating the long-lasting effect of buying tourism on brands that location a premium on their exclusivity.
“Imagine a situation where you have people buying all your stuff,” Ms. Pao said. “In the short term you benefit, however in the long term, you don’t, since you don’t understand where the sales are going, as well as that is extremely frightening to these people.”
Given exactly how difficult it is to manage every element of distribution, though, some would suggest that an indicator of desirability “” a burgeoning gray market, state “” should be seen as an chance for brands to capitalize when demand is strongest.
“There is an underground railroad of iPods going back to Europe,” stated Susan Nelson, an executive director of Landor Associates, a branding company in San Francisco. “Contrary to damaging the brand, I believe it produces a bit of a mystique.”
Of course, purse quotas may not be the most efficient solution anyway, thinking about the many methods determined shoppers can get around them “” by utilizing several credit history cards, for instance, or buying from more than one store. however the alternate “” increasing costs of European high-end products offered in the United States, as many business have begun to do “” dangers alienating American consumers, or providing an advantage to American high-end competitors.
“What they don’t want to see,” Ms. Nelson said, “is for the market to be flooded with what they think about to be inexpensive handbags.”
Especially not their own.