In The Loop
November 14, 2014
Luxury Institute’s Founder and CEO Milton Pedraza discusses luxury retail on “In The Loop.”
In The Loop
November 14, 2014
Luxury Institute’s Founder and CEO Milton Pedraza discusses luxury retail on “In The Loop.”
NEW YORK, NY–(Marketwired – Nov 11, 2014) – The following is a White paper by Milton Pedraza, CEO of Luxury Institute, LLC:
All around the globe, the luxury industry has navigated against strong headwinds in 2014. Growth in China has slowed due to government crackdowns and macroeconomic forces, Russian clients are buying far less for obvious reasons, and key European countries dependent on streams of wealthy tourists and aspirational buyers have also stalled. The situation is comparatively better in the United States and in Japan but both nations are growing far below their long-term economic potential. To these cyclical challenges, add in the secular change of online buying cannibalizing store and it has been a tough year for most luxury goods and services providers.
There are exceptions to the rule of sluggish sales. Despite the challenges, pure-play luxury brands like Saint Laurent, Bottega Veneta, and Hermès continue to innovate and make necessary investments to retain their status as luxury brands. No one is immune to market forces. Luxury will always be cyclical, but the real danger for brands that we see comes from self-inflicted wounds caused by the inability to accept new realities and failure to execute. Doing either of these far too slowly is also dangerous.
Looking ahead, the future has the potential to be very bright for luxury. Providing high-end goods and services to wealthy customers will remain a growth industry in volume, and value, for decades to come. What’s crucial now is rapid adaptation to evolving market realities. Powerful forces are affecting the luxury industry right now and remind us that we have to get comfortable being uncomfortable. The time to implement change is now.
We work with dozens of top-tier global luxury brands each year and live in the headquarters and stores of our clients. Based on recent experiences and dialogues, here are seven trends and issues that enlightened luxury brands need to address in 2015:
1. There Are Too Many Luxury Brands For A Slow-Growth Environment
There are too many luxury and premium brands in the world. Our industry has too many hotel chains, too many handbags and apparel producers, too many automotive providers, too many wealth managers, too many watch and jewelry makers and too many private jet charter companies. Name an industry and you’ll likely find a staggering number of brands purporting to be premium. Many have global ambitions.
There are too many “luxury” brands, but not enough great ones. Most are pure copycats. This does not even take into account all the fearless start-ups trying to disrupt the industry.
In 2015, look for many more large, medium and start-up brands to stall, or fail, at a faster rate than over the last few years. Affluent consumers, chased to exhaustion, are swamped by too many me-too options in every category. It will be time for true luxury brands to stop benchmarking the mundane players, understand their own brand identity, values, and standards, and get back to delivering differentiated, fully-priced value in 2015.
2. Comparable Store And E-commerce Sales Are The Critical Metrics
One recurring theme we hear in luxury boardrooms is that any run-of-the mill luxury brand can open stores, including outlets, globally to increase sales. In the current environment, it takes true leadership competence to drive significant comparable store sales. Foot traffic into stores is down 20% to 30% year-over-year for many luxury brands. E-commerce has scarcely made up the difference.
Look for luxury brands in 2015 to stop opening stores completely, even close some, and focus surgically on pinpointing true opportunities to open profitable new stores. The three mantras of luxury economics in 2015 will be: driving new valuable clients to online and offline channels, dramatic increases in conversion, and profitable retention of all high potential clients, not just the VIPs.
3. Not Only Best Practices, Best Execution
Dr. Atul Gawande, a Harvard surgeon and author who has studied how the highest performers in many fields achieve results, has written that the biggest differentiator in medicine and business today is not learning new best practices but executing on a core set of known best practices. For example, hospital infections proliferate today in most hospitals even though medical personnel are fully aware how they can be prevented. Failure to execute best practices consistently is the single biggest impediment of increasing sales and profits in the luxury industry.
Luxury today is full of highly experienced marketing, sales, e-commerce, operations and human resources executives who know exactly how to execute best practices. Unfortunately, many of these leaders show up at the office daily and fail to inspire, empower, measure and reinforce these best practices. In 2015, look for boards of directors to require measurable results from their teams as the hyper-competitive environment requires going from experienced to expert, from delusion to execution.
4. Transforming Store Managers Into Entrepreneurs
Everyone who understands luxury retail agrees unequivocally that the store manager is the backbone of any operation. Despite this wide recognition, many store managers are disempowered into becoming little more than glorified administrators and bureaucrats. They stay in small offices all day counting inventory and pounding out reports that can be automated in a flash.
There is a crisis of management in luxury, but it is not primarily in the executive suite. It is among the store manager ranks. Luxury brands need to attract, retain, educate and empower store managers to become a new breed of entrepreneur within the luxury brand. In 2015, look for top-tier luxury brands to focus resources to dramatically increase the formal education, empowerment and incentives of store managers to generate business by using public relations, digital assets, events, social media, and other tools to drive traffic and sales to stores daily. These local entrepreneurs will unleash a new era of “freedom with boundaries” in the luxury world.
5. Brands Are Finally Getting Serious About Human Relationships
We believe that the concept of a luxury brand having a relationship with its customers without continuous human to human engagement is highly overrated, if not an outright mirage. Last year we told you the online personal shopper was a critical and urgent evolving concept in the luxury world. One of the few brands that executed this concept was mainstream retailer Zappos. Others like Net-A-Porter reserve this concept for VIP clients.
In the coming year, look for more brands to finally begin building deeper relationships with large percentages of online and multi-channel customers. Although resources are scarce, brands should build intimate relationships with, at a minimum, their top 20% to 40% of clients.
Also, and very importantly, look for luxury brands to empower store sales associates who have multi-channel clients to reach out and build human relationships after the client purchases in any channel. For this to happen, digital assets and insights must empower sales associates in real time, and compensation structures will need to reflect the nature of a multi-channel relationship. In 2015 we are extremely optimistic that the economic conditions will force brands to get moving on building better client relationships rooted in personal interaction rather than impersonal algorithms.
6. CEO Change Will Accelerate Again In The Luxury Industry
During the recessionary years of 2008 and 2009 CEO changes were widespread as desperate times called for desperate measures. This time the change lacks desperation, but it will be just as profound. Demographics will drive change in the executive suite as baby boomer CEOs gracefully step down at a rapid clip. We experienced several CEO changes toward the end of 2014, and we expect to see many more in 2015.
In times of change, luxury brands look for more skilled and effective leaders. Enlightened boards of directors at major conglomerates and private equity firms are looking for a new breed of highly collaborative and effective team builders. Inspiration is needed more than perspiration to lead associates to execute brilliantly across segments and channels. Companies expect measurable execution in 2015, and they will get it, one way or another. Given the demographics of luxury, expect more women and diversity candidate CEOs to thrive in 2015, all to the benefit of our industry.
7. Think Less Facebook, More Pinterest
Let’s face it, in its current format, Facebook is of marginal value for luxury brands. Gathering millions of likes and online fans has not been a formula for rapid sales growth in luxury. Success stories have been few and far between despite the lemming-like response from unenlightened digital executives and their agency partners. True luxury buyers are far more discerning. Engagement in luxury requires a one-to-one conversation, not a megaphone.
Social media can certainly serve a useful purpose. Sites and apps like Pinterest and Instagram that engage visually have a far better chance of success for the eye-candy offerings of many luxury brands. Look for localized and personalized efforts to thrive within these highly engaging media and look for the leading edge brands to empower all front-line associates to post their favorites in a brand-sanctioned way. In this way, a brand can engage clients and prospects in rich, honest dialogue that builds relationships and boosts sales.
The luxury industry is healthy, but those who anticipate change will have a decided advantage. Many luxury goods and services brands enter 2015 with false confidence and may only realize too late that the world has changed. Enlightened brands are jumping off of the cresting wave, and onto an emerging wave to drive sales and profits in 2015.
We welcome your opinions and comments. Please see below for our contact information.
By: Kelsey Drain
November 5, 2014
(Photo : Instagram/Yoox)
Italian e-tailer Yoox.com will launch its holiday project today, centered on the theme of one of the country’s most romantic cities.
A Dinner Party in Venice is “an eclectic gift guide menu to suit everyone’s tastes,” and will consist of a series of videos showing personalities gathered in Venice to attend a fictitious Christmas dinner. The collection will also offer a special range of Venice-inspired products.
The videos, released weekly, will feature Arrigo Cipriani, actress Alessandra Mastronardi, artist Ivan Olita, fashion curator Lynn Yaeger, photographer Charlotte Colbert, jewelry designers Osanna and Madina Visconti di Modrone, artist Barnaba Fornasetti and stylist Tina Leung.
The new collection is shoppable on Yoox.com and on its new app, which allows users to access what products shoppers around them are buying and make purchases quickly by just scanning a credit card.
A customized selection of aprons decorated by various fashion and design labels are featured in the selection of Venice-themed products. Designed by Emilio Pucci, Fornasetti, Missoni, Toilet Paper and Vivienne Westwood, the proceeds will be donated to nonprofit organization Slow Food Foundation for Biodiversity.
The holiday shopping section also features two Venini Murano glass vases, a selection of Venice’s traditional Friulana slippers and striped T-shirts resembling those worn by gondola boatmen.
Additionally, MSGM, the Italian contemporary fashion label, designed a special-edition capsule collection for the site.
Back in August, there was speculation of Yoox being acquired by Amazon. The luxury retailer and the e-commerce conglomerate have made no advancements on the speculation.
“This might be the right time for companies to look to acquire a company like Yoox,” Milton Pedraza, CEO of the Luxury Institute, a New York-based research and consulting firm, said in August.
“The mass brands understand that luxury is far more profitable and more resilient. For a company to trade up to the luxury or the premium providers in categories, that would be wise right now.”
By: Kathryn Vasel
October 30, 2014
Click the link to read the entire article, which includes quotes from Milton Pedraza, CEO of Luxury Institute: http://www.channel3000.com/money/men-are-buying-up-these-1200-sneakers/29428624
October 28, 2014
NEW YORK, NY–(Marketwired – Oct 28, 2014) – Today, the New York-based Luxury Institute released findings from its 2015 Luxury Multichannel Engagement Index (LMEI) survey of large multi-brand retailers. Responders had a minimum annual income of $150,000, an average annual income of $318,000 and an average net worth of $3.1 million.
Wealthy consumers aged 21 and older rated and ranked both their online and in-store shopping experiences along 31 criteria. Compared to the 2014 survey, the selection of retailers was refined to thoroughly define the preferences of the multi-channel luxury consumer. Responders evaluated six luxury retailers — Barneys New York, Bergdorf Goodman, Bloomingdale’s, Neiman Marcus, Nordstrom and Saks Fifth Avenue — as well as online-only luxury specialist Net-A-Porter.
Nordstrom is the most popular luxury retailer with the highest incidence of customers spending in both online (26%) and offline (45%) channels. It also leads in the share of total fashion spend (17%). In aggregate, for the six multi-channel luxury retailers, wealthy consumers spend 61% offline and 39% online.
Bergdorf Goodman is the top-rated luxury retailer for in-store engagement with an in-store LMEI score of 8.17 out of 10. Ranking second for in-store engagement is Barneys New York (7.90), and Neiman Marcus (7.85) ranks third.
Saks.com ranks the highest for website engagement with an online LMEI score of 8.10. Saks.com achieved the top scores on 3 of the 16 website engagement criteria: the matching consumer perceptions of a luxury retailer, offering guided and personalized shopping experiences online, and featuring attractive and inspiring product displays.
Ranking narrowly behind Saks.com is Net-A-Porter (8.07), noted for its prices and personalized recommendations. Neimanmarcus.com (8.04) finishes third but is ranked highest on 5 of the 16 criteria of online customer experience.
“Wealthy consumers have come to expect a lot from luxury retailers both online and in stores,” says Luxury Institute CEO Milton Pedraza. “Not only do the goods that these retailers sell need to be of the finest quality, but they must also have top people, both online and offline, in place to deliver superior service and experiences.”
NEW YORK, NY–(Marketwired – Oct 21, 2014) – Today, the New York-based Luxury Institute announced the launch of Luxcelerate, an enhanced version of its innovative successful 7-Step Customer Culture process. Luxcelerate is designed to accelerate sales performance via a proprietary methodology that focuses on empowering the customer-facing online and offline associates, helping brands to improve both client relationships and sales exponentially.
Presently, top brands are struggling to both expand and retain their client base. Top brands have a conversion rate of 10-15%, a data collection rate of 30-40% (approximately 25% of this data is unusable) and a first time buyer retention rate of 10%.
Luxcelerate encourages the individual sales associate to learn and execute the best practices in client relationship building. The process is designed to improve sales performance via an exclusive methodology that focuses on relationship building, while improving a brand’s conversion, data collection and retention rates.
Luxcelerate’s proprietary methodology is based on shared relationship values and standards that are designed by a brand’s front-line teams, and is therefore customized to fit the unique DNA and culture of each brand. Custom education programs use empirically proven learning principles to drive retention of critical knowledge. Measurement and reinforcement methodologies are then deployed individually to guarantee consistent daily execution. The outcome is humanistic, effective client relationship building that leads to sharp increases in sales.
Luxury Institute’s CEO Milton Pedraza developed Luxcelerate’s 7-step methodology. Mr. Pedraza established this innovative methodology after being inspired by best practices from education, medicine and aviation. Using this process, a number of top-tier luxury brands have doubled, or tripled, the accurate collection of critical client data, and have significantly increased client conversion and retention rates. Luxury Institute has worked with the top brands of major luxury groups, well-known brands owned by private equity firms, and small boutique brands, to drive sales at rates of 15-30% per annum.
“The Luxury Institute was invaluable in helping Malia Mills define and implement our clienteling process. The first quarter that we implemented our program we increased sales by a significant amount.” — Carol Mills, Co-Founder, Malia Mills
“Since embarking on this project, we have seen double digit increases in data collection, conversion and a significant acceleration in retail momentum.” — Claudia Poccia, President and CEO of Gurwitch, Owner of the Laura Mercier brand
October 1, 2014
By Ruth La Ferla
Rita Ora was traveling quasi-incognito when she was snapped this year at Los Angeles International Airport wearing outsize shades, a blush-tone carryall, Air Jordans and a cushy sweatshirt, its hood pulled seductively over her brow.
Olivia Wilde recently strode the same passageways, the picture of ease in a biker coat … and sweatshirt, as did Rosie Huntington-Whiteley, who sallied toward the airport lounge wearing a dark fedora and … hey now, you know the refrain.
At the airport, a hub for the paparazzi, who tend to treat its fluid corridors as a makeshift red carpet, off-duty models and Hollywood A-listers have been flaunting their sweatshirts with careless élan, wearing versions embellished with eye-catching slogans, cartoons and jewels and pretty florettes or, alternately, opting for standard issue, raglan-sleeve varieties meant to signal, one suspects, that the wearer is just like you and me.
Clearly civilians relate, which may be why this cozy insignia of slacker chic, once reserved for furtive cigarette jaunts to the 7-Eleven or late nights on the sofa, binge-watching “Revenge,” has become the would-be style-setter’s trophy of choice, an item for all seasons — and occasions.
Its transition from nondescript wardrobe standby, the fashion equivalent of mac and cheese, to luxurious fashion mainstay now seems to have been all but inevitable. “The world of luxury has gone somewhat casual,” said Milton Pedraza, chief executive of the Luxury Institute, a consulting firm. “A lot of people don’t see sweatshirts as basic items anymore.”
Conversely, Mr. Pedraza noted, “a lot of basic items have gone premium.” He may have had in mind the sumptuous interpretations of this humble item that appeared on fall runways and are sold at Neiman Marcus, Nordstrom and Barneys New York and on upscale websites. Prices veer from $30 for an orchid-printed top by Altuzarra for Target to more than $4,400 for a Fendi version ornamented with fake fur, felt, swaths of mesh and crystal, but then, who’s counting?
Such gussied-up sweats can still play down one’s wealth while conferring enough raffishness to suggest that the wearer is too young, too prodigiously gifted or simply too chic to go in for a conventional 9-to-5 uniform. Indeed, these days the only thing inelegant about this once unexceptional garment is its name. And even that has had an upgrade.
Statement sweats, as they’re known in fashion-speak, emerged on the runways over two years ago, making their debut on the runway at Givenchy in the form of a photo-collage sweatshirt, followed last fall with a Bambi-print variation that became an instant fashion hit. The look gained traction in the spring with the parade of high-end sweatshirts at Theory, Kenzo and Alexander Wang, whose white shirt, cheekily inscribed with a “Parental Advisory” legend, was a fashion editor’s favorite.
Sweats were reprised for fall at Rag & Bone, where a satin shirt was paired with paint-splatter jeans; at 3.1 Phillip Lim, with burnt-orange leather hoodies; and at Isabel Marant, where a lustrous camouflage shirt was shown with baggy fatigues. Surviving yet another season, they emerged for spring 2015 in a boxy version with cutoff sleeves at Jil Sander, covered in multihued sequins at Dsquared2, in a sunburst design at Fausto Puglisi, in silver at Norma Kamali and as a sleeveless top with an extravagant bow and as an evening dress at Bottega Veneta.
Like biker jackets, sneakers and skinny jeans before them, statement sweats have proved their staying power.
“Today it would be a misnomer to use the word ‘trend’ in reference to the sweatshirt,” said Tomoko Ogura, the senior fashion director at Barneys. Ever-evolving, it is now cut in sophisticated fabrics, including but by no means confined to cashmere, chiffon, organza, leather and lace, and offered in varying textures and shapes. So lavishly garnished are some that they are hard to place as sweatshirts at all. Yet consumers are responding, Ms. Ogura said, “because, while the designer’s hand is apparent, their utility is not compromised.”
Their utilitarian provenance is a talking point, indeed a boasting point, among luxury consumers who like to wear their shirts subversively with tuxedo pants or furs or, conversely, to throw on a sequin-encrusted versions to lend dazzle to their leggings or jeans. It’s like wearing a Casio watch with your Brunello Cucinelli cashmere pullover, suggesting a kind of inverse snobbery. “Like you’re playing the game without quite really playing the game,” Mr. Pedraza said.
In some quarters, sweatshirts, like sneakers, remain the great fashion leveler. Paraded this summer in men’s shows as diverse as Bottega Veneta, Neil Barrett and Lacoste, they seemed intended to mask distinctions of class and income or to render them obsolete. “Turns out,” as Guy Trebay noted in a New York Times fashion review, “Mark Zuckerberg didn’t need to outgrow his hoodie and shower shoes.” (Which is not to neglect those 99-percenters repurposing their gym togs as everyday wear in apparent deference to Gap’s recent injunction, in a series of fashion ads, to “dress normal.”)
“Sweatshirts flourish because they work for every demographic and every retail category — men’s, kids, junior contemporary and designer,” said Sheila Aimette, a vice president at the trend forecasting company WGSN. “They are cross-generational and cross-gender.”
Madeline Alford, a digital editorial assistant at Luckymag.com, has incorporated sweats into her workday regalia. Taking her style cues from the Lucky fashion staff, she may, on any given day, combine her black tubular jeans or leather midi-skirt with an oversize sweatshirt. “Instead of a chunky sweater, you could definitely wear a fleece,” she said, “something still warm and efficient.”
Function trumps showiness among Ms. Alford’s priorities. Fashion, she noted, has been gradually turning its back on the flamboyant extremes of street style in favor of a more accessible look. “Much as we love all that crazy, out-there style, it’s not for everybody,” she said.
Sweatshirts, on the other hand, merit her unstinting approval. “They’re what real women wear all the time,” she said.
August 27, 2014
Milton Pedraza’s segment is featured at: 9:35-15:11
By: Marina Strauss
The Globe and Mail
August 18, 2014
For Karen McKibbin, getting it right is more important than doing it fast in her latest assignment at upscale U.S. chain Nordstrom Inc.
The president of Nordstrom’s Canadian division has been gearing up for two years for the launch of its first store here on Sept. 19 in Calgary’s Chinook Centre. She watched another U.S. retail giant – discounter Target Corp. – stumble in rapidly introducing its first 124 outlets in this country in 2013 amid customer complaints of empty shelves and overhigh prices.
Nordstrom is taking a decidedly different approach from Target, opening its first six stores gradually over 2 1/2 years, she said.
“We are going to stub our toe – we are not going to get everything perfect,” she said in a telephone interview from Calgary, where she has been spending three or four days a week commuting from Nordstrom’s Seattle headquarters. “You can expect us to make changes and respond in real time. We are certainly not resting on our laurels.”
A lot is riding on Ms. McKibbin making a positive first impression with Nordstrom in affluent Calgary. As Target works to make up lost ground, Nordstrom is investing in a slow, deliberate rollout, betting that its first foray outside its home country will pay off in giving customers reasons to return amid rising competition in the luxury field.
Nordstrom posted $14-million (U.S.) of operating losses last year in Canada and expects $35-million in 2014, chief financial officer Mike Koppel has said. The red ink will flow for “several years” before the division contributes to the retailer’s bottom line, he has warned. Eventually, the company anticipates it can generate $1-billion of annual sales in up to 10 department stores and as many as 20 of its Rack discount outlets.
(Target, for its part, had expected to be in the black in the final quarter of its first year in Canada, but instead it reported an operating loss of almost $1-billion last year and analysts anticipate more red ink in 2014.)
But Nordstrom, which is a relatively strong performer south of the border, will face an increasingly crowded luxury market in Canada. Dominant player Holt Renfrew & Co. and men’s wear specialist Harry Rosen Inc. are expanding their stores, while U.S. rival Saks Inc., which was bought by Toronto-based Hudson’s Bay Co. in 2013, is preparing to launch its first stores in this country next year. HBC is making progress in polishing its existing operations here.
“Nordstrom is going to have to be adaptable because things will evolve in Canada,” said Milton Pedraza, chief executive officer of researcher the Luxury Institute in New York, which has worked with each of Nordstrom, Holts and Saks. “But I think Nordstrom will be a solid competitor.”
In the Institute’s annual survey of luxury retailers’ customer service and store experience, Nordstrom ranked No. 1 this year after coming in second in 2013 and first the previous year.
In Canada, Nordstrom has already shown its cautious approach by delaying the launch of its Rack stores here from a planned 2015 roll out because of the unexpected complexity of building its new systems. Nordstrom also will hold back for now on introducing a separate domestic e-commerce site, said Ms. McKibbin, a veteran of Nordstrom.
“We definitely feel there’s an opportunity for us to serve the customer online and that’s definitely still part of our strategy,” she said. “Although when we’ll be able to offer that to the customer is left to be determined.” Nordstrom allows consumers here to cross-border shop from its U.S. site although steep duty, tax and shipping fees raise the tab about 10 to 20 per cent, a spokeswoman said.
Its next store opens in Ottawa in March, 2015 and, in Vancouver, six months later. “I’m feeling cautiously optimistic about opening our first store,” Ms. McKibbin said. “The cadence is going to allow us the opportunity to open the doors to our first store and really get to work about making the adjustments, things that customers are telling us they want, and then applying that to our next store.”
Click the link to read the entire article, which includes a quote from Milton Pedraza, CEO of Luxury Institute:http://www.theglobeandmail.com/report-on-business/nordstrom-bets-on-a-slow-entry-into-canada/article20100322/
By: Erin Griffith
July 7, 2014
They’re all considered investments, but which luxury brands hold their value the best may surprise you.
There’s a reason they call them “investment pieces.” At $22,000 for a Proenza Schouler tote or $9,000 for a Ralph Lauren dress, luxury goods are meant to last a lifetime and hold their value. That’s why the market for used designer goods is the most attractive category for online consignment.
One such marketplace, a website called The RealReal, is on track to do $100 million in sales this year. (The company takes a cut of each sale.) The RealReal recently tapped its database of 500,000 luxury goods from 500 designer brands to find which brands have the highest resale value, and which ones hold their value the longest. The startup found that Chanel, Christian Louboutin, and Hermès hold their value the longest. Tod’s and Versace lose their value the fastest.
Perhaps more surprising is which brands carry the highest and lowest resale value. Items from Givenchy, Victoria Beckham, Charlotte Olympia and Alexander McQueen all sell for much closer to their original price than goods from Marni, Alexander Wang, 3.1 Philip Lim, and Marc Jacobs.
Resale values of fashion or luxury goods can fluctuate depending on buzz around a certain designer, particularly if a fashion houses hires a a new creative director or chief executive, according to Rati Levesque, Chief Merchant at The RealReal. “When Phoebe Philo joined Céline as the creative director, it added more resale value to the brand,” she says.
But more important than buzz is availability and discounting. If a luxury brand frequently discounts its goods at outlet stores or online via flash sales, consumers will perceive that they don’t have to pay full price for that brand, says Milton Pedraza, CEO of Luxury Institute, a luxury industry research group. While baby boomer shoppers tend to research something online and then buy it in the store, millennials do it the other way around. They “showroom,” the term for checking out an item in the store before finding the best deal for it online.
“These days you can find ways to arbitrage the brands, because you have so much information and the market is inefficient,” Pedraza says. “Brands have to be careful where they allow their product to be sold.”
For example: Chanel and Hermès do not hold sales in their stores and they have a limited number of outlet stores. Chanel doesn’t even sell its goods online, with the exception of beauty products. “In that sense, it creates a perception of purity,” Pedraza says.” The brands then “back it up with design quality and heritage,” he says. “If I buy something, I will think, ‘Wow it has long term investment value.’”
Below are some luxury brands that fall on both sides of the spectrum.
Click the link to read the entire article which includes quotes from Milton Pedraza, CEO of Luxury Institute:http://fortune.com/2014/07/07/which-luxury-brands-have-highest-resale-value/