Luxury brands are looking for discreet ways to get rid of unsold inventory while protecting the elite reputation of their name.

Sales of luxury items are starting to cool this year after posting gains in a post-pandemic recovery. Today, retailers are stuck with tons of unsold inventory with little option to get rid of it.

Bain & Company estimates that the luxury sector recorded a 15% increase in sales in 2022 at constant exchange rates. However, sales began to cool late last year and the growth rate this year is expected to be about half that, the Wall Street Journal reported.

Online luxury goods seller MyTheresa told the outlet that the company had experienced “the worst market conditions since 2008” and that it had 44% more inventory at the end of last quarter compared to the previous year.

About 13% of all luxury goods are currently sold by value through these off-price outlets, up from 5% a decade ago.Emanuele Cremaschi/Getty

Demand for high-end watches is also declining. In November, Cartier owner Richemont reported a 3% decline in watch sales in the first half of the year. In America, sales fell 17%. Bloomberg cited high interest rates and fears of recession as reasons for the declining demand.

Without resorting to steep markdowns that could tarnish perceptions of their brands’ exclusivity, or literally burning unsold clothing, something the EU banned this year, luxury retailers have few options.

Some brands are turning to off-price outlets, which are usually located far from major fashion centers. About 13% of all luxury goods are now sold by value through these outlets, up from about 5% a decade ago, the Journal reported, citing Bain estimates.

Other brands have turned to unofficial resellers who exploit price differences between regions – buying goods at one price in Europe and then selling them at a higher price in Asia. One retailer told The Journal that brands have been calling resellers directly to offer inventory in recent months.

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