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The New Retail World: $1M Rings at Sam’s, Cartier at Bluelight

NEW YORK — Who says you can control channels of distribution today?<br><br>Twenty-carat fancy yellow-gold diamond rings at Sam’s Club. Cartier Pasha watches, Dooney & Bourke handbags and Lambertson-Truex accessories at Kmart’s...

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NEW YORK — Who says you can control channels of distribution today?

This story first appeared in the December 16, 2002 issue of WWD.  Subscribe Today.

Twenty-carat fancy yellow-gold diamond rings at Sam’s Club. Cartier Pasha watches, Dooney & Bourke handbags and Lambertson-Truex accessories at Kmart’s Bluelight.com. These are just some of the upscale products available where you might least expect to find them.

And the prices are almost too good to be true. Omega’s 18-karat white-gold Cindy Crawford series watch, listed at $11,000, is on sale for $6,187.50, after a special Kmart discount; the Cartier Pasha, regularly $3,150, is selling for $1,987.50; a set of Ashford 2-carat diamond and yellow-gold earrings is priced at $11,200 and a Lambertson-Truex Kansas collection leather belt is $295. Forget blue-light specials. These are sapphire-light specials.

There also are vintage Rolex and Patek Philippe watches and new watch styles from Concord, Ebel, Bulgari and Breitling, and jewelry offerings by designers Lisa Jenks, Dana Kellin and Whitney Boin. Bluelight has sunglasses from Giorgio Armani, Calvin Klein and Donna Karan; picture frames by Jay Strongwater, and table clocks by Versace.

Who would have thought that the home of the Martha Stewart Everyday collection, Joe Boxer and Thom McAn would be selling tony Madison Avenue brands at bargain prices?

Of course, you won’t find a Cartier watch in the showcase of any Kmart store. The products are available exclusively on Bluelight.com through a deal with GSI Commerce, which owns the online jewelry store Ashford and runs the back end of the Bluelight.com Web site. The products will be on the site through Dec. 26.

GSI also operates e-commerce businesses for Gart Sports, Sports Authority, Athlete’s Foot, Reebok, Palm (as in pilot), Oshman’s and Gloss, a beauty Web site that sells Estée Lauder, Clinique, Origins, Prescriptives, MAC, Stila, La Mer, Clarins, Chanel and Bobbie Brown. Gloss is jointly owned by Chanel, Clarins and The Estée Lauder Cos.

“This is the first time we’ve worked with an upscale e-tailer like Ashford,” said Dave Karraker, director of marketing at Kmart. “If the opportunity exists to partner with any of GSI’s partners, we’d be interested in driving traffic to our site. Conceivably, you could see Estée Lauder on Bluelight.”

It’s worth noting that Kmart is taking a hipper and more sophisticated approach to its advertising, reminiscent of Target’s television commercials and the Gap’s series a few years ago featuring energetic dancers. The 30-second Kmart commercials for Joe Boxer, “Antler Boogie” and “Unwrap,” feature actor/dancer Vaughn Lowery, who answered a casting call.

“We asked him to show us his personality,” said Karraker. “He dropped his pants to show everybody he was wearing boxers and did this little dance. We liked it so much we made commercials around the dance.”

Karraker said the commercials, which will also be shown at movie theaters, are giving Kmart a new hip currency. “They’ve had a ‘halo effect,’” he said. “Joe Boxer is a brand that was only available in upscale department stores.”

With high-end products turning up in an increasing number of outlets, consumers have the shopping world as their oyster. They buy from department and specialty stores, boutiques, Web sites, warehouse clubs and discounters interchangeably and opportunistically.

“There’s more competitors and it’s not just the retailers,” said Allen Questrom, chairman and chief executive officer of J.C. Penney Co. “Everything is becoming more fragmented. It’s like the news business. You don’t just get the news from the three major networks anymore.”

An ad for Sam’s Club in the November issue of In Style carried the tag line: “Expect the Unexpected.” The phrase is apropos. After all, the idea of the massive warehouse club selling a 20-carat fancy yellow-gold diamond ring for $1 million seems incongruous. But there is Sam’s, hawking diamonds along with 150-fl. oz. bottles of Cheer laundry detergent and bulk toilet paper. Elizabeth Taylor, eat your heart out.

Sam’s Web site also carries fox-trimmed hooded Italian leather jackets, 14-karat white-gold J-hoop earrings, accented with nearly 2 carats of diamonds for $1,596.18, and an array of watches from Concord, Raymond Weil and TechnoMarine. There’s even the popular TechnoDiamond pink model set with two rows of pavé diamonds for $1,329.92.

Costco.com also sells a variety of watches from Baume & Mercier, Phillipe Charriol, Ebel and Raymond Weil, among others, and diamond jewelry priced up to $24,000 for a 2.44-carat ring. The site features wines such as Chateau Margaux Premier Grand Cru Classe 1998 for $164.99 a bottle, Chateau d’Yquem Sauternes 1994 for $154.99 and 12 bottles of Dom Perignon Brut Champagne 1995 for $949.

While there was once a stigma attached with bargain hunting, the only thing consumers seem to be embarrassed about today is paying full price. One New York businesswoman, whose stomping grounds include Jeffrey New York, Bergdorf Goodman and Bagutta, now does much of her shopping on eBay, where she has found black pants by Balenciaga, a leather jacket by Yves Saint Laurent, Dolce & Gabbana shoes and Marni skirts and tops. (Everything she buys is new with tags.)

That’s not news to Meg Whitman, the online marketplace’s ceo. “There are 34,000 keyword searches for Prada every day typed into our search engine, and 25,000 keyword searches for Burberry every day,” Whitman told an audience at the WWD/DNR CEO Summit in November.

The businesswoman, who asked that her name be withheld, said her best score was a Roberto Cavalli nylon jacket with a fur hood now selling at Bergdorf Goodman for $3,600. She paid $1,000.

“You don’t know if this fell off a runway or fell off a truck,” she said, “but the deals are fabulous.”

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