Saks will pass on lower prices for luxury brands
By Tim Gaynor
TUCSON, Arizona (Reuters) - Saks Inc will pass on lower prices from top brands such as Prada and Christian Dior, which the upscale chain said on Friday will help spur sales during a deepening economic recession.
Saks, while reaffirming it will not endanger its high-end image despite market conditions, said it would be able to pass on lower prices for select luxury items as competition for dwindling customers heats up.
The 84-year-old company, which is battling rivals from Neiman Marcus Group Inc to Nordstrom Inc, had pledged it would not resort again to the broad discounting of the 2008 holiday season, during which the firm discounted luxury brands by up to 75 percent, sending shockwaves through the industry.
But price ranges had now widened, meaning cheaper prices were available, Saks CEO Steve Sadove said.
"What we are we finding is our customer is gravitating to the very best pieces, but they are also moving down a little bit because of good pricing," Sadove told a retail conference in Tucson, Arizona.
"Prada is now selling a $700 handbag, versus their lower- priced one being $1,000 ... At Christian Dior, an entry price handbag was about $1,500.
"If you look to this fall, you are going to see Christian Dior sell a $950 handbag," he added.
"What you're seeing is a gravitation and a widening of the mix that a Prada, that a Chanel" will offer. "A widening of the price point within the brand." Continued...