In Rare Move, Luxury Goods Peddlers Cut Prices

Economic downturn forces 'creative' thinking
By Matt Cantor,  Newser User
Posted Nov 14, 2008 9:47 AM CST
Models present creations designed by German fashion designer Karl Lagerfeld for Chanel's spring-summer 2009 ready-to-wear collection in Paris, Friday, Oct. 3, 2008.   (AP Photo/Jacques Brinon)
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(Newser) – Facing a worldwide economic downturn, some makers of luxury goods—designer clothes, bags, shoes—are breaking with long-held tradition and trimming prices in the US, the Wall Street Journal reports. Companies such as Chanel, Versace, and Chloe are making cuts of up to 10%. Still, when image is key, purveyors of designer items can’t risk lowering prices too much; a sinking price tag can mean a sinking profile, the Journal notes.

“Never before have we done this,” said Chloe’s CEO. But “this is an unusual time. You have to be creative.” Sales of luxury items are slowing; Italian jeweler Bulgari, for example, saw its third-quarter profit drop 44%. The rising dollar, however, should keep the books fairly steady for most European fashion houses, with US sales bringing in more than expected.