Wednesday, January 19, 2011

Prada's Game Change

In past seasons, Prada reduced merchandise to as much as 70% off. This year, the sale story is much different. Prada didn't allow any presales and the discount was just 30% off. Usually, the markdown starts at 40%.

We stopped by the boutique to take a quick survey of the sale situation. We were surprised to find that the discount had not budged and the inventory to be quite small. How can this be? No sale and no selection!

According to Reuters News, wealthy shoppers have recovered from the recession more quickly than middle and lower income consumers, and are on a wild shopping spree. In December, sales at Saks rose 11.8%. In addition, Nordstrom and Neiman Marcus Group reported strong gains.

Luxury companies, like LVMH Moet Hennessey Louis Vuitton SA, Burberry Group Plc and Hermes International SCA are expected to see a 9% increase in revenue this year, according to estimates compiled by Bloomberg. This comes on the heels of last year's 60% increase in the Bloomberg European Fashion Index, which includes LVMH, Richemont and Hermes.

These financials may be the reason why we didn't get to enjoy a great Prada sample sale or exciting markdowns this year. But it doesn't mean that luxury will never see discounts again. Prada might have changed the game a bit this year but that just means that we need to be resourceful. Just remember, all sectors are cyclical. This year luxury is on top, next year... who knows.

2 comments:

Anonymous said...

I was at Prada boutique today. The sale was still at 30% off, while at Barney's NY the markdown is at 60-70% off. Of course, I didn't buy anything at the boutique!

Anonymous said...

How was Barney's sale selection on Prada and Louboutin?