Do luxury stores have a future?

As everyone has now realized, the recession has crippled even those with the deepest pockets. When people today talk about high-priced fashion, it is often accompanied by the notion that it has become unaffordable to general society. However, it is my belief that luxury still exists in this world but it now comes at a cheaper price.

At the insistence of my mother and sister, I found myself in many malls over the Christmas holidays. During these trips I went into stores such as Saks Fifth Avenue, Lacoste, and Hugo Boss. Walking in, I expected them to be empty. Everything I had been reading in the news led me to believe that people have less disposable income and less money to spend on these luxury items. However, I was could not have been more wrong. I realize that I went at high season but these stores were jam packed. After looking around more, I noticed that there were two types of shoppers there. There were the very rich people who have not felt the effects of the economic downturn as much as most and those that were searching for bargains. The latter group represents a serious threat to the RVP of these high end stores. All three of the above stores pride themselves on being high end. When I walked into these stores in the past, I found elite items at elite prices. This inevitably set a barrier to people who could not afford $20,000 purses. Even looking around these stores has been known to intimidate people since the whole ambiance is tailored to the extreme upper class.

So what exactly is the RVP of these types of stores? I think it is fair to say that the main reason why people like to shop in these stores is the image that the high class brands portray. When I see someone wearing a Hugo Boss suit, for example, I automatically view that as relatively elite. The value of these stores also lies in its store presentation and its personable and well-dressed staff. It is my view that all of these factors while still important to some extent, have become a much smaller factor today. When I go to these retailers, I cannot believe how relatively inexpensive some of these items are. People can now purchase items for a fraction of their original price. Sale signs are found throughout stores and they truly don’t have the same feel as they did a couple of years ago. This is not currently a big issue because the elitist shoppers seem to be a thing of the past. Some people think that this kind of over-indulgence within fashion will never return. Should that be the case, then these stores will not have any issues going forward. However, when the inevitably prospers once again, will this have hampered the opinion of some people with respect to these high-end brands? I truly think it will have serious effects that will be hard to reverse. It will be interesting to see how companies re-build their image and their importance to their original customers in an industry that has seen its value decrease by over $10 billion in the past year. One thing is for certain in these times: “Saving is the new spending.”

Sources:
http://www.guardian.co.uk/business/2009/jan/31/retail-shopping-habits-credit-crunch
http://www.thestar.com/living/article/574815