Q: While my luxury business is doing fine, I’m seeing a drop off in sales of my premium brands (similar to Michael Kors and Hugo Boss). That customer seems to be shopping for cheaper product lines elsewhere. What can I do to make up for this lost business? Should I double down on my luxury customers?
Steve Pruitt: This is a good question; I’ve heard other retailers asking the same. The good news is that your luxury business is holding up. It’s harder to market in the middle. Also, it is much harder for lower-priced lines to knock off true luxury brands, compared with premium brands. The premium brands are also more widely distributed in the mass market, whether it’s the same merchandise you carry or similar products offered through a licensing deal.
My recommendation is to spend more time in the markets. This would include both trade shows and retail stores. To make it in this environment, you need to find new brands.
Another option is to find private label opportunities that give you unique offerings and deliver more margin. Also, don’t be afraid to push back on your vendors if you discover that their products are being over-promoted in your market.
We are actually seeing brands pull back from the mass market to focus more on specialty stores. Vince has taken this direction and so far, it has been successful. So, I recommend that you dig deeper into the market to find unique merchandise that excites your customers. The product exists.
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