Versace
The Budget Fashionista’s Weekly Retail Report
In March, we saw signs that the economy is stabilizing - retail stocks are up, particularly for Sears Canada and UNIQLO. Other good news: Topshop finally opened in New York; it appears to have lived up to all the hype. And jewelers are thankful for brides and grooms-to-be, as the bridal industry appears to be recession-proof.
But it’s not all rainbows and sunshine. The luxury market continues to nose dive. Profits at Versace, for example, dropped quite a bit (but mostly do to exchange rate flux).
Meanwhile, Macy’s was “downgraded to junk” by an investment firm. That’s gotta hurt. Macy’s has company, though. A mall in Long Island defaulted on a $124 million mortgage payment, all because its two top stores went bankrupt.
In even gloomier news - Gottschalks is finally set to liquidate. Portland’s Zells Broz. Jewelers is following in its footsteps, announcing that it, too, is closing down.
Who were the casualties in all of this? In march, 6,500 retail jobs were lost. Ouch.
Designers Face the Music
What: Retailers, like Macy’s and Saks, are fed up with paying top dollar for designer fashions that probably won’t sell too well anyways. Who wants to buy a thousand dollar dress these days? So, instead of devising some marketing strategy to convince shoppers that they really do need a new Gucci purse, they’re just asking designers to lower prices. Why didn’t they think of that before?
What We Say: We agree with the The Cut’s take on all of this - while designer fashions might be cheaper for us down the road, they won’t be that much cheaper. If we don’t have a budget for $700 stilettos today, we won’t have a budget for $500 stilettos tomorrow. It’s more about values than anything, but some designers - like Versace, which refuses to lower prices despite its decreasing profits - just don’t get that yet.
We give them another month of misery and maybe then they’ll rethink their business plan and come to realize that “brand preservation” is a moot point when no one’s buying your stuff. Guess what Versace? You’re not too good for basic economic theory; supply and demand affects every business; it’s okay to admit you’ve been affected, too.
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