Recent purchases

There actually is a pretty decent secondhand handbag market. We don't buy secondhand but my girl is trying to sell one of her recently acquired Chanel bags (full price from Saks, kthx O_O) and while there's been some interest.. most of these bitches are cheap so she'd rather just keep it.

Of course, you could try eBay but it's so peppered with counterfeits that it's difficult to get fair prices for legitimate goods.

Originally Posted by iammatt

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It really depends which retailers you are talking about and how much negotiating power they have. The large ones negotiate tons of buybacks and discounts for unsold merchandise which greatly skews the numbers. Needless to say that if you are looking at the luxury sector as a whole, these buybacks and incentives are zero-sum at best, and in reality are a net negative as the transactional costs take away from the total gross profit. The basic rule in retail is that 20% of the clients make up 90% of the sales. These are generally people who buy both at full price and a bit at sales. In other words, if you are not one of these guys, you are not the target population. Period.

My point was that retail consumer spending of any type drives the consumer goods market. As far as buybacks/incentives, you have to consider the impact on full price sales as well. The whole point is to get people into the store where they actually have a chance to buy something whether it's at full price or at a discount. The issue of what to do with unsold merchandise again has a lot to do with design because ideally such merchandise wouldn't exist. However, since we live in the real world, it does, and represents an issue, especially for small businesses.

Originally Posted by drizzt3117

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My point was that retail consumer spending of any type drives the consumer goods market. As far as buybacks/incentives, you have to consider the impact on full price sales as well. The whole point is to get people into the store where they actually have a chance to buy something whether it's at full price or at a discount. The issue of what to do with unsold merchandise again has a lot to do with design because ideally such merchandise wouldn't exist. However, since we live in the real world, it does, and represents an issue, especially for small businesses.

You make some interesting points but your way to look at "unsold merchandise" is incomplete; think of it as the various research programs of a company operating in the pharmaceutical industry, it is quite clear for the company developing its product that some are not going to come to fruition, but they still have a portfolio of products because, for luxury makers, the one that do catch on are the breadwinners of the company. You also have to keep in mind that a fashion label has to cover a full range to be considered a fully fledged player.

As for whom the labels design for; well there is often a difficult equilibrium between who brings the money and who the label wants to appear to be catering to (think Louis Vuitton's transformation into an aspirational brand).

Originally Posted by Fuuma

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You make some interesting points but your way to look at "unsold merchandise" is incomplete; think of it as the various research programs of a company operating in the pharmaceutical industry, it is quite clear for the company developing its product that some are not going to come to fruition, but they still have a portfolio of products because, for luxury makers, the one that do catch on are the breadwinners of the company. You also have to keep in mind that a fashion label has to cover a full range to be considered a fully fledged player.

I agree, but let's look at a couple scenarios (simplified enormously).

1) Perfect world.

Inventory Costs: $1M
Net Markup: 100%
Sales: $2M
Profit: $1M

2) Real World

Inventory Costs: $1M
Net Markup: 100%
Sales 1M
Profit (after all full price goods are sold): $0
Remaining Inventory Cost: $500k

In this scenario, all of the company's profits will come from selling product at less than full retail price.

My guess is that most retailers will be closer to scenario 2 than scenario 1. Most retailers are probably in the red until holiday season, although perhaps not as late as Black Friday as is traditionally the case.

As for the buying on sale vs. full price, I'd go with Matt's opinion, you're better off buying a lot less merchandise but getting the pieces that will be exactly what you wanted. I do believe a lot of SW&D do apply that philosophy though, while it is much less prevalent in the menswear section because of the ubiquity of heavily discounted high quality suits, shirts, ties and shoes. In fact I've posted twice to offer some explanation, in some buying and selling threads where menswear posters where flabbergasted by the prices Lanvin and Carpe Diem were commanding on the second-hand (third?) market.

Oh and since it's a recent purchase thread: I acquired a pair of Carol Christian Poell x-stitching pants (in black).

Originally Posted by drizzt3117

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I agree, but let's look at a couple scenarios (simplified enormously).

1) Perfect world.

Inventory Costs: $1M
Net Markup: 100%
Sales: $2M
Profit: $1M

2) Real World

Inventory Costs: $1M
Net Markup: 100%
Sales 1M
Profit (after all full price goods are sold): $0
Remaining Inventory Cost: $500k

In this scenario, all of the company's profits will come from selling product at less than full retail price.

My guess is that most retailers will be closer to scenario 2 than scenario 1. Most retailers are probably in the red until holiday season, although perhaps not as late as Black Friday as is traditionally the case.

Haha, yeah that's also my guess for a typical small, specialized retailer. You'll note that those tend to have lower discount during sales but make up for it by having some dedicated shoppers (like you) who will purchase a few things during season and a boatload when sales arrive.

Originally Posted by drizzt3117

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it's obviously consumer spending that drives a market, and to that end, my half million dollars of annual consumer spending is going to do more to thom browne's bottom line than joe blow's $1000 spent buying a cashmere jumper.

That's a heck of a lot of scratch to be spending in order to achieve some really, really funky "fits"*. Why don't you take your money and put it to better use in the same market?




*word used very, very loosely.

Originally Posted by Pariolino

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That's a heck of a lot of scratch to be spending in order to achieve some really, really funky "fits"*. Why don't you take your money and put it to better use in the same market?

Thanks for the concern and the financial advice, I'm doing fine, but thank you.

Drizzt, by the way I understood your assertion of the "profits" coming from the sales items because of the way cashflows are distributed in time (full sale items happen before discounted ones).

PS: I'm not sure you noticed but your upper body is huge, could you please find a way to hide it as its hurting my feelings...

Originally Posted by drizzt3117

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1) Perfect world.

2) Real World

except that this is a retailer's scenario. Not a brand's. Retailer XYZ will carry a variety of brands, some that sell out before sale time and others that have near full inventory.

When the revolution comes, Socal and his $140 tube socks will be the first to get it, but until then, I wish Austin had a few more Socal's - our best shops have gone under the last couple of years, in large part because Austin shoppers have no incentive not to wait a store out until the sale.

Or perhaps stores like Factory People and By George overestimated Austinites' willingness to spend on men's clothes.

Disagree. I think that you would be surprised how many people pay full price for everything and how little resale price comes into the mind of most luxury consumers. I would venture to say that it doesn't figure at all. IIRC from my short days of actually covering retail and luxury goods, one of the first things you look at is full price sell through. A succesful shop, and in turn brand, depends on early sales, not discounters picking up the leftovers.

Personally, I pay full price for most things. I distrust Ebay and really dislike the feeding frenzy of big sales. If I see something on sale that I like, I snap it up. Years ago I would buy stuff on sale just because the price was good, but I never ended up using any of it.

It would be interesting to compare the satisfaction with full price versus sale price purchases over time. Also, my guess is that when I look at the WAYWN threads and see something that really fits awfully, I am looking at something that was a great deal.

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This is an interesting debate. In general I have to agree with what Matt is saying. Most of the guys on this board, wealthy or no, are bargain hunters. That means they are not the target audience for luxury brands. Nothing wrong with that, it's just the way it is.

Another thing to remember is that buying at a discount means you are investing time to save money. If you want to dress really well at a significant discount, then you will have to invest a lot of time to save money. There are a ton of people out there for whom this is not a wise investment, they are much better off just paying the money. Now a lot of guys here are basically clothing hobbyists, which skews the picture somewhat. Still though, I often get the feeling that there are more than a few guys on this board trying to build a wardrobe that have pockets deep enough to pay retail or close to it more often, and they would be better dressed for it.

There is also a small and often overlooked consumer group that is very well represented here - that is guys who having already built solid wardrobes, use ebay, discounters etc. to supplement with brands they are already familiar with and love, at minimal cost. These guys are probably the smartest consumers of all, but to get there you are going to have to buy a lot of discount clothing for a lot of years (which is going to mean quite a bit of wasted money and unwearable clothing) or else spend time in high end retail stores.

Originally Posted by SoCal2NYC

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when some are coming from Riverdale . .


Can you ask please, to bring me some, Matzah (ball ) soup from Liebman's ?

Originally Posted by Get Smart

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except that this is a retailer's scenario. Not a brand's. Retailer XYZ will carry a variety of brands, some that sell out before sale time and others that have near full inventory.

True, and it's a clear simplification, but the other side of the coin is that a retailer won't continue to carry a brand that doesn't sell well at full retail, this was the design consideration I mentioned earlier.

No more talk bitches, more consumer spending!!!