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Those of you who received the Shyam email today..... - Page 7

post #91 of 105
well if you read Shyam's email, he was buying shoes from EG at 205 pounds a pop (so they probably make them for 40% of that - 80 pounds) - EG sells the same shoes to regular customers for 450 pounds. That means their profit margin is 5.5x - not small
post #92 of 105
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(so they probably make them for 40% of that - 80 pounds)

I very much doubt that.
post #93 of 105
deleted duplicate post
post #94 of 105
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Originally Posted by odoreater
Actually, to me this all kind of adds to the thrill of the whole thing. I kind of feel like I'm on a search to hunt down the best deals and get the best bargains and the best goods at the best prices before a particular loophole is closed up. When that loophole is closed up we just continue hunting and looking for the next hole that we can exploit to get something for cheaper than everyone else is getting it for or to find something that the other guy just can't get period. Maybe this makes me a bad person, who knows, but I don't really care. To me, it's the thrill of the hunt.

This makes you a tax lawyer.
post #95 of 105
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Originally Posted by JLibourel
What, pray tell, is the "Golden Triangle" area? I have never heard the term applied to LA shopping before, and I have lived in the Greater Los Angeles area for about 57 of my 64 years. Neither has my wife, who is a very regular customer at top-end retail establishments.

The Golden Triangle is in Beverly Hills. I recall the area being referred to as such from as early as the late 1960's.

http://maps.mapnetwork.com/lawestside/index.asp?_map=3
post #96 of 105
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Originally Posted by A Harris
I very much doubt that.

Well, I know for a fact that it costs Cleverley 40% of their total selling price to make a pair of RTW shoes. I was simply using that same data. Besides even if the % its much higher, the margins are still very healthy. This was written in response to some previous posts that implied that the margins on luxury goods are slim, which is an absurd statement
post #97 of 105
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Originally Posted by Panzeraxe II
Well, I know for a fact that it costs Cleverley 40% of their total selling price to make a pair of RTW shoes. I was simply using that same data. Besides even if the % its much higher, the margins are still very healthy. This was written in response to some previous posts that implied that the margins on luxury goods are slim, which is an absurd statement

The margins on an individual item may be high. However, I've seen the books for a number of smaller luxury goods companies, and they are often operating in the red. I'm sorry that I am not a CPA and was probably using incorrect terminology.

In layman's terms then: a lot of these firms are not making money hand-over-fist.

That is all I meant to say.
post #98 of 105
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Originally Posted by LA Guy
The margins on an individual item may be high. However, I've seen the books for a number of smaller luxury goods companies, and they are often operating in the red. I'm sorry that I am not a CPA and was probably using incorrect terminology.

In layman's terms then: a lot of these firms are not making money hand-over-fist.

That is all I meant to say.
Right, but the marginal profit is quite high. The fixed costs are what kill retailers. The whole point is that if your marginal profit is high, what you need to do is simply sell more goods and attract more customers. That is why I do not understand this kind of action from EG. They are not going to lose customers because PLAL sells a few pairs online. If anything, they will attract more customers to their dealers who have been happy with purchases from PLAL.
post #99 of 105
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Originally Posted by iammatt
The whole point is that if your marginal profit is high, what you need to do is simply sell more goods and attract more customers. That is why I do not understand this kind of action from EG. They are not going to lose customers because PLAL sells a few pairs online. If anything, they will attract more customers to their dealers who have been happy with purchases from PLAL.

This may or may not be true. One very important point that, interestingly, has not been mentioned in this thread, is that brands have different marketing strategies for different areas, and what may be perceived and marketed as a luxury brand in, say, North America, may not be so in, say, Europe, and vice versa.

One famous example is Levis, which is marketed as a high end brand throughout most of Europe. There was a rather notorious lawsuit against a rather famous retailer in the UK by Levis for importing made for the US market Levis into the UK market, and selling them for less. Levis USA has tried to position itself in the US as a high end brand, with mixed success. Similarly, brands like Converse and Pony, which are pretty ho-hum brands in the United States, command a much higher price, and prestige, in Europe. But once a brand name has been compromised, cachet is nearly impossibly to regain, even with Herculean efforts to do so. Calvin Klein had an acrimonious fight with Warnaco, which held the license to manufacture Calvin Klein underwear, and which distributed its product to discount stores like J.C. Penneys. Others on the board (namely, those working for CK) will have a much better knowledge of this than I do, but I believe that this lead to Calvin Klein being very difficult to sell. After that debacle, none of the luxury goods conglomerates wanted to touch it. It was tainted.

I feel the need to reiterate that I have no dog in this particular fight, nor do I understand the contractual agreement between PLAL and EG. If I had to wager, though, my money would be that PLAL has little cause against EG, and knows it.
post #100 of 105
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Originally Posted by A Harris
I very much doubt that.

Sure. Write that you doubt it.
The fraudulent US markup on some european shoes is certainly greater than any 80 GBP.
post #101 of 105
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Originally Posted by Charley
Sure. Write that you doubt it.
The fraudulent US markup on some european shoes is certainly greater than any 80 GBP.

Hi Charley,

I am interested in why you use the term "fraudulent". The markup is certainly high, you might even use the term "exorbitant" for the sake of hyperbole, but "fraudulent" suggests dishonesty, that the product is being misrepresented. High markups for imported good are not uncommon on either side of the Atlantic. I would go so far as to say that they are typical. Besides the "cachet" associated with imported products, there are shipping costs, tariffs, etc... to account for. I can tell you for a certainty that shipping things to the UK, for example, immediately raises wholesale by about 25-30% off the bat, if you do everything above board.

Alden and Allen Edmond shoes are about twice the U.S. price in the European market, last time I was there. And this phenomenon is hardly restricted to shoes. Hugo Boss is about half the U.S. price in Germany, while Filson bags are about twice the U.S. price throughout Europe (and really hard to find, to boot.) Before the dollar fell, I remember that you could get Gucci for Banana Republic prices throughout Italy, while my Italian friends went crazy buying Pendleton shirts, Woolrich sweaters, and Canada Goose jackets when they visited the States, these staples being held in great regard in Italy, and retailing for about twice the US prices in Italy (possibly more now, give the weak dollar.)

Again, I have no dog in this fight (really ) I'm just trying to give a little perspective, is all.

Good night all,

Fok.
post #102 of 105
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In my opinion EG would be wise to open up more to retailers who can provide their product to areas where it does not currently exist. If any store in LA (BH Polo does not count) sold EG shoes I'd likely have a pair right now. I understand I could order them from Sky Valet, but I have no way to try the shoe on beforehand and don't want to go through the added expense of multiple shippings back and forth to find the right size. I'm also very disappointed by the behavior on the part of EG...as a result I'll likely end up with a pair of Lobbs before a pair of EGs.

HS- call up Malouf's in Burlingame and get on their mailing list for a trunk show. EG also does them at a hotel in SF.

Fok is right about Angelenos and English shoes. The last time I was in Carroll & Co. they had gone very British and had some shoes, but nothing as well known or high end as EG or JL. For a while Scott Hill had Lattanzis, but I think he only special orders them now.
post #103 of 105
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Very dissapointing indeed; I had ordered two pairs in the rather hard-to-find size of 12.5/13 F.
Any suggestions as to where I could buy/order EG's at a Bricks and Mortar store in that size?

Probably best bet would be Mitchells/Richards/Marsh's. I don't think Boyd's or Wayne Edwards carry them...
post #104 of 105
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Originally Posted by Steve B.
EG also does them at a hotel in SF.

I think that was when Tony Gaziano worked for them, but since he's going independent, that's not going to be available any more.

While not strictly English, the Brioni boutique in Beverly Hills carries Lattanzi. Carroll & Co. carried mostly Alden when I visited a few months ago. After experiencing the lack of shoe knowledge in many of the SoCal stores mentioned, I'd rather go up to Burlingame, and get it from the horse's mouth when EG visits Malouf's. Although Hillary from EG was at BH Polo last month training their staff, so perhaps things have improved there.

--Andre
post #105 of 105
Quote:
Originally Posted by Steve B.
HS- call up Malouf's in Burlingame and get on their mailing list for a trunk show. EG also does them at a hotel in SF.

Fok is right about Angelenos and English shoes. The last time I was in Carroll & Co. they had gone very British and had some shoes, but nothing as well known or high end as EG or JL. For a while Scott Hill had Lattanzis, but I think he only special orders them now.

I would if it were not so far away. That and I'm a little disappointed with EG's behavior with regard to this transaction. Even though it did not affect me, I'm not sure I want to do business with them.
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