The Impact Of Discount Sales On Department Stores Is More And More Serious.

It is reported that Michael Kors and Ralph Lauren are two.

It is the brand that most high-end retailers in the United States have discounted most in recent months, which is consistent with Michael Kors CEO JohnIdol. Michael Kors has achieved the highest sales revenue in the first quarter.

Between May and July,

Brands and department stores will offer discounts, and up to 80% of the products will be promoted.

The crazy sales promotion really eased.

Store concerns, but excessive discount sales have undermined the image of the brand's painstaking efforts and conveyed a concept to consumers that they can buy branded products without full price.

According to data provided by Edited, in July alone, American retailers had sent about 2400 promotional campaigns.

Such retail environment leads to awkward situation of brands, especially luxury brands, so MichaelKors and other brands are starting to resist retailers' discount activities.

KatieSmith, a senior fashion retailing analyst at Edited, said there is a balance between department stores and brands. Department stores' promotional activities can help brands to lean their stocks, but department stores need to maintain a healthy connection with their brands, but it is clear that this balance is broken and healthy links are also damaged.

In recent years, the relationship between luxury brands and department stores has changed.

Previously, department stores were dominant because they were the only channel for exposure of luxury brand products. At that time, department stores did not face multi-channel competition, and brands also introduced products sold only in department stores to avoid conflicts with brand stores, so they did not need to rely on discounts to promote sales.

But now, with the emergence of competitors, department stores have had to sell products on sale by discount, which leads to a growing tension between department stores and brands.

Neil Saunders, head of Conlumino, a consumer research firm, points out that there are too many brands and stores, and the competition is fierce. Department stores are forced to be helpless, and can only attract customers by a large number of discount activities.

The rise of e-commerce has also been a blow to department stores. Consumers tend to buy more affordable products in e-commerce, or at least compare the price with the e-business, and then choose to buy products.

In addition, the decrease in foreign tourists and the slowdown in the economy have led to a decline in market traffic.

JohnIdol stressed in last month's conference call that MichaelKors must clean up its inventory, which would help the brand break away from the unhealthy cycle of discount sales.

The share price of Michael Kors has fallen by half since its peak in 2014, and the share price of Ralph Lauren has fallen more than 40% since its peak in 2013.

In the face of such a situation that is not conducive to brand development, Michael Kors is trying to end the coupon strategy, and other fashion companies have adopted similar strategies.

For example, Kate Spade&Co. has cut the date of promotional activities, while Coach plans to close 25% of sales outlets in department stores.

Even so, it is not easy for the brand to stop discounting activities, because every holiday will be the reason for the discount. Mother's day in May, father's day in June, independence day in July, and the anniversary of retailers will be the reason for the discount.

Natalie Kotlyar, partner of consulting and accounting firm, points out that consumers have been trained to buy discounted goods, even luxury goods, which they want to buy at discounted prices.

Brand stores can control products to be sold at full price, but department stores are likely to sell the same products at a discount, which is a factor that can not be controlled by brands.

Oteri J and other shopping centers are more and more popular with consumers, and discount chain store NordstromRack sales surged 11% in the second quarter.

Despite the continuous discount activities in department stores, fashion brands will still maintain close ties with department stores, because department stores are still a major marketing channel for brands.