Luxury consumers better get ready for sticker shock come fall.
After all, retailers already are swooning as they view collections in New York, London, Milan and Paris that are up to 15 percent more expensive in wholesale terms compared with last fall, thanks to the euro’s might. On top of that, the fall collections so far are laden with intricate embroideries, crystal embellishments and beading, which only add to the production cost.
No wonder Gwen Stefani’s “Rich Girl,” a hip-hop remake of the “Fiddler on the Roof” classic, seems to be the song for the season.
Not surprisingly, alarm bells are starting to go off in the retail and vendor communities, challenged already by a customer who is increasingly expecting early markdowns.
“Pricing of course is a concern, the dollars don’t go as far, so we have to be more selective,” said Sue Patneaude, executive vice president, designer apparel, at Nordstrom. “But we will absolutely still buy the most luxurious fashion. We won’t compromise what we buy because of the euro, and I encourage the buyers to convert everything to retail prices as they purchase so we maintain a realistic point of view about the intrinsic value of the clothes.”
As buyers and the fashion press try to keep from fainting as they get their hotel and restaurant bills in Milan this week, their bigger concern is how consumers will react come fall to the higher prices. On Wednesday, the dollar rose slightly against the euro to close at $1.3212.
Barbara Atkin, fashion director at Holt Renfrew, noted, “We have to partner with vendors and work on the pricing because, if it’s priced out of the ballpark, the customer walks away from it.”
Many buyers said they would think twice before committing to lines, and some expect to work with designers to figure out a pricing strategy to avoid stratospheric denominations. Luxury vendors, meanwhile, are looking to reduce sourcing costs at every turn, monitor for symptoms of sticker shock and explore new ways of pricing the line.
And come up with new handbags for less than $1,000 — pronto.
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