Luxury Retailers Are Realizing They Don’t Need Department Stores
Coach announced this week it’s pulling its purses and wallets out of a quarter of department stores that sell its goods, around 250 stores.
The luxury retailer has had enough of department store runaway promotions that were both hurting its brand reputation and sinking the company’s profits, Bloomberg reports. Instead, Coach and other luxury retailers like Ralph Lauren are spending more money remodeling and reimagining their own shops and websites so they can attract customers willing to pay a premium for their goods.
And it’s working. Products priced at more than $400 made up 40% of Coach’s sales in the most recent quarter, up from only 30% last year. This could be additional bad news for department stores if luxury brands continue to pull out of their stores to pursue their own brick-and-mortar locations. [Bloomberg]