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BUSINESS Tuesday 24 december 2019
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Champagne and shoes: Luxury stores adapt to changing shopper

By ANNE D'INNOCENZIO ing to a study by consulting
NEW YORK (AP) — To get firm Bain & Co. Together,
that monogram tote bag however, they contributed
by Louis Vuitton or leather to virtually all of the mar-
Flashtrek sneakers by Gu- ket’s growth, compared
cci, the go-to place had with 85% in 2017.
been luxury department Overall, the global market
stores. for personal luxury goods
Not anymore. Now, there is healthy, buoyed by a
are far more options to ac- strong economy and the
cess exclusive labels. You spending power of China.
can buy them at online The sector reached a re-
sites like Netaporter. Or get cord high of $286.53 billion
them barely used through (260 billion euros) in 2018
sites like Fashionphile and — a 6% increase from the
The RealReal. You can year before, according to
even rent an entire rotating Bain. Jewelry in particular
wardrobe through compa- has been one of the top
nies like Rent the Runway. luxury growth categories.
“The consumer is king. And In the U.S., luxury sales ex-
they can buy luxury brands cluding jewelry have fallen
in different places,” says 1.9 % through November
Steve Sadove, former CEO compared to a 3.4% in-
and chairman of Saks Fifth crease in overall retail sales
Avenue and now senior In this Tuesday, Nov. 26, 2019, photo shows customers shopping in the shoe department at the excluding autos and gas,
Nordstrom NYC Flagship in New York.
adviser a MasterCard. Associated Press says MasterCard Spend-
The new entrants have dis- ingPulse, which tracks sales
rupted the luxury sector by Marcus is rolling out shops as they watch their prod- afford high-end merchan- across all types of pay-
creating different channels where customers can sell ucts get discounted on re- dise but may still be looking ments. That’s in part be-
to attain the seemingly un- their designer belong- sale sites. for a deal. cause of store closures and
attainable. For luxury de- ings as part of a partner- Joseph Aquino, president Millennials and Generation a drop in international tour-
partment stores that once ship with Fashionphile, an of real estate services firm Z accounted for 47% of lux- ists.
had a lock on where the online resale accessories JAACRES, sees luxury’s fu- ury consumers in 2018 and Luxury shoppers like Sabina
well-heeled could shop, company. And as part of ture with fewer stores that for 33% of all luxury sales Gill present challenges to
that has forced them to a $250 million renovation of focus on “less product” worldwide in 2018, accord- luxury department stores.q
reimagine their approach. its flagship store in Manhat- and “higher prices.”
They now offer new servic- tan, Saks Fifth Avenue has In one sense, traditional lux-
es as well as food and alco- dedicated its main floor ury stores are no different
hol to lure back customers to luxury handbags that’s than other brick-and-mor-
who were once exclusively staffed with 50 handbag tar retailers that must now
theirs. style advisers, in addition to fiercely compete with on-
At Nordstrom’s women’s sales associates. line rivals. But the exclusivity
flagship in Manhattan, for Meanwhile, brands like Gu- they used to command by
instance, customers sip cci and Louis Vuitton are catering to a niche market
champagne and nibble opening more of their own of wealthy spenders is be-
on small bites while try- stores and expanding on- ginning to erode, especially
ing on shoes. Recognizing line. Robert Burke, a luxury among the new-moneyed
the growing popularity of consultant, says they are set of shoppers in their 20s
second-hand sites, Neiman trying to control their future through their 40s who can