When demand for luxe items plummeted, companies were suddenly on the hook for a whole lot of unsold inventory. One year on, having learnt hard lessons from a hard luxe retail year, retailers are stocking significantly reduced stock numbers. The result has been a return to sky-high prices on limited-quantity items. The New York Times reports:

Saks, the chic Manhattan department store, is a prime example. Its inventory is down by double digits compared with last year. That is partly a response to lower demand, of course, but it is also a business strategy aimed at weaning consumers from deep discounts. By carrying fewer goods and selling them at full price, Saks is essentially telling customers: buy it now or live without it.

This will pique the interest of the world’s Lambda personalities, as this signals a return to the more exclusive-themed luxe market that has existed for many years. I wrote previously that it may be the case that for luxe to return to its glory days, it must re-focus away from masstige and aim for exclusivity.

In the New York Times piece, it is noted that consumers may not buy into this new strategy around the holidays:

A big question this Christmas will be how successful retailers are with the strategy. Some surveys have found that, so far, the prospect of lean inventories is not prompting consumers to hasten their holiday shopping. Shoppers could wait out the retailers until late in the season, in the hope that they will panic and put high-grade merchandise on sale.

It’s a legitimate concern. However if this is in fact the industry re-focusing on exclusivity, then I suspect retailers have already taken this into consideration and adjusted margins accordingly.