The global financial crisis (GFC) had led to aggressive markdowns on many luxury items. But if you believe the latest Bloomberg report, you shouldn’t get used to these heavy discounts, because they’re not here to stay.
The article, Saks Chief Cuts Orders to Avoid Stiletto Discounts, reveals that high-end department stores, such as Saks Fifth Avenue in the US, are planning to purchase around 20 percent less stock so they don’t end up overstocked at the end of the season. And according to retail experts, this type of scarcity will drive their sales through the roof.
“Luxury has always been about scarcity, about limited distribution,” stated Saks Chief Executive Officer, Stephen Sadove. And we second that. Even prior to the GFC, there were too many luxury items in stores with annoyingly plentiful sizes and colour ranges. The stock was just too available. So a return to the basic principles of luxury – high quality items made in limited quantities – should be celebrated. Exclusivity is always a wonderful motivator for any luxury buyer. A limited edition item is generally more highly coveted than one that’s available to the masses.
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