Department-store sales may woo bargain shoppers, but they turn off the high-end base luxury designers cater to, Christina Binkley writes in the Wall Street Journal, and cut into those designers’ profits and brand control. Discounts last Thanksgiving set off a chain reaction that collapsed high-end retail’s pricing structure. “That’s not buyer remorse,” says one luxury customer of seeing markdowns on clothes she owns. “That’s buyer rage.”
Designer Eileen Fisher is fighting back by reducing her dependency on department stores. She’s opening boutiques, boosting online capabilities, and pushing stores to use “scalpel markdowns”—discretionary discounts that leave hot items at full price. Fisher may eventually buy space within stores, like Louis Vuitton, to control her product. The latter’s sales rose 10% last fall; unlike most brands, its products didn’t go on sale.