Luxury on Sale Separates Fashion Brands

Fashion Brands Doing the Unthinkable

While top luxury fashion brands such as Chanel have raised their prices recently others have adopted another strategy.  Fierce competition, declining sales, and uncertainty stemming from coronavirus have had a serious impact on the finances of many luxury fashion brands. Many small brands, in particular, have felt the squeeze. Long before the time of COVID-19, these labels were burdened with surplus inventory, shrinking profit margins, and heavy losses. In what seems a desperate attempt to increase cashflow following months of store closures, some brands have embarked on the unthinkable: putting their merchandise on sale at significant discounts. Now take a look at 4 British fashion brands that currently have their wares available

Temperley London

A firm favourite of Kate Middleton, Temperley London was in trouble long before the pandemic. In the 12 years up to 31 December 2019, the brand has experienced total operating losses exceeding a whopping £27 million. That, together with falling sales in the UK and gross margin declining by 10% from 2013 to 2019, has led CEO Luca Donnini to execute this plan. Of the 164 products available on the Temperley London website, 102 or 62% are on sale for less than 50% of the RRP. For the Temperley London lovers out there, the Promise Sleeved Gown is up for grabs for a small fortune of £1,600, marked down from £3,329.

Has the brand been subtle in advertising the sale? The answer is no. The sale is brazenly advertised on the website homepage and a Google search for ‘Temperley London’ yields a paid advertisement 50% Off Today Temperley London™ Sale as the first result.

Mary Katrantzou

Maria Katrantzou’s brand, trading as Mary Katrantzou under Tatoumik Limited, appears to have lost money in each of the last 4 years to 31 December 2018 totalling in excess of £6 million with Katrantzou having to lend her brand close to £1 million. 

The Queen of colour and print is unashamedly advertising her sale on the website homepage with the message ‘Further Reductions – Summer Sale Ends Soon’ greeting visitors. Clicking the ‘Shop Now’ button provides a delightful surprise with discounts of up to 80% on 40 out of the clothing 102 items on the website. So those of us with a few hundred pounds to throw around can easily acquire the Ava Evening Sequined Dress for £720. It was £3,600 before the price cut. As the designer says: ‘Last chance to shop up to 80% off.’ That’s luxury for you…

Hunter Boot

British high street footwear brand, Hunter Boot, experienced losses after taxation for 2019 exceeding £13 million. The CEO of 4 years, Vincent Wauters departed the brand in July 2020. Hunter Boot has joined the ranks of Temperley London and Mary Katrantzou with an online sale of its men’s, women’s, and children’s offerings. A total of 54 men’s products are on sale, marked down by up to 50%. For example, the Original Mesh Shoe is discounted by 40%, from £85 to £51. The sale is clearly advertised on the Hunter Boot website homepage.

Victoria Beckham

Posh Spice’s namesake brand, Victoria Beckham, has experienced total losses in the last 4 years of approximately £42 million. In late June this year, The Sun reported that Victoria Beckham would be offloading dozens of lines in a Summer Sale with markdowns approaching 50%. It was also revealed that the designer had taken a £6.4million loan backed by a private “investment agreement” in an effort to retain control of Victoria Beckham Limited.

Fast forward to October 2020, and not much has changed. A Google search for ‘Victoria Beckham Sale’ yields a dedicated sale page on the brand’s website as the 5^th search result. Sales prices are currently more than 50%. The Batwing Sleeve Knit Dress with a RRP of £1,390 is going for £556, a reduction of 60%. The brand also states that customers will ‘enjoy an additional 10% off the Spring Summer sale, applied automatically at the checkout.’

Victoria Beckham has been much more elusive about her sale than others. There is no link to the sale page on the brand’s website and it can only be accessed via a Google search. This elusory strategy can possibly be explained by the criticism that the brand received in 2018 when it held a sale in which garments were reduced by up to 70%. Eric Musgrave, fashion analyst and author, and former editor of Drapers had this to say:

“Nobody wants to discount by this amount. It damages the brand credibility and upsets people who have paid full price. All companies need to clear out their unsold stock. But this shows Victoria Beckham has clearly over-ordered – or that she is producing designs that haven’t proved popular. The question remains how long are her backers willing to sustain that.”

Why Unthinkable?

Temperley London, Mary Katrantzou, Hunter Boot and Victoria Beckham are not alone. Other British fashion brands such as Burberry, Aspinal of London, Roksanda and Paul Smith have also attempted to bolster cash flow through considerable markdowns of their merchandise.

But why the fuss? Why is it unthinkable for a luxury fashion brand to have a sale with merchandise discounted by such large amounts? Put simply, marking down goods not only devalues a brand name and image. It can also significantly depreciate the worth of the products in the eye of the beholder – the all-important customer. Will you see Chanel or Dior on clearance? That will be the day that that spells the end of luxury fashion as we know it.