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Stealth Discounting for Luxury Brands
(Source: The Financial Times)
Luxury executives know that discounts destroy value by undermining carefully engineered brand images. Even for non-premium brands, after all, it takes consumers three to five years to pay full price again once they have experienced discounts, according to the Financial Times. . . . keep reading
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Bulgari Boss Lowers Expectations
(Source: Bloomberg)
Bulgari CEO Franceso Trapani told reporters he expects a first quarter loss and recovery during the second half of the year--but that business will not be as robust as 2007. . . . keep reading
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Burberry Retail Revenue Rises
(Source: LuxuryBrandNetwork.com)
For the quarter ended 31 March 2009, Burberry produced a 14.4% revenue increase including the impact of favorable currency exchange according to analysis by LuxuryBrandNetwork.com. For the most recent six months, comparable revenue rose 2%, or 21% as reported. The company benefitted from strong currency gains, though continued discounting lowered gross margins below expectations. . . . keep reading
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Bulgari Hits "Nasty" Patch; Japanese Revenue Down 25%
(Source: LuxuryBrandNetwork.com)
After solid performance through September, revenue at Bulgari Group fell 9.8% at constant exchange rates during the all-important fourth quarter. CEO Francesco Trapani admitted that "the nasty economic environment had a strong negative effect on the holiday season's sales." . . . keep reading
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Coach Refuses to Discount, to Halve Store Growth
Despite slight drops in revenue and earnings, Coach is maintaining strict brand discipline. Despite a "heavily promotional atmosphere," CEO Lew Frankfort said the company held true to its brand integrity and "full-priced proposition by not discounting." . . . keep reading
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Neiman Marcus Cuts 375 Jobs (1/19)
(Source: Reuters India)
Neiman Marcus Group Inc. announced it was eliminating 375 jobs in response to weak economic conditions. The cuts represent just over 2% of the company's total workforce. . . . keep reading
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Luxury Auto Makers Abandon Price Discipline
(Source: Barron's)
Everyone knows that maintenance of a luxury brand requires price discipline. But with luxury car sales down 15% this year, upscale brands are wheeling and dealing. They're just not calling them price cuts. . . . keep reading
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Emotions Key to Luxe Pricing
(Source: Forbes)
Companies pricing luxury items "are not selling goods, they are selling an emotion," strategy and marketing consultant Jens Baumgarten with Simon Kucher & Partners tells Forbes. . . . keep reading
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