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Tag: Gucci

  • Ferragamo CEO announced

    Ferragamo CEO announced

    Salvatore Ferragamo has officially found its new chief executive officer.

    The luxury Italian brand’s CEO and general manager, Micaela Le Divelec Lemmi, will relinquish her dual title to take on the sole position of CEO in November.

    The general manager position will be made obsolete, as reported by the Italian press.

    After joining Ferragamo from Gucci in April, where Le Divelec Lemmi was chief financial officer, the executive was named Ferragamo’s CEO in July, a role taken ad interim by group president Ferruccio Ferragamo, following the departure of Eraldo Poletto in March.

    Ferragamo looks to lift dwindling sales across the globe with Le Divelec Lemmi, who has 20-plus years experience in luxury, namely at Gucci.

    For the first-half 2018, the company said revenues were down 3.4% currency-neutral or 6.2% on a reported basis to €674 million, lower than the €685 million that analysts had predicted.

    Retail sales fell 5.2% and wholesale revenues were down 7.6%.

    By region, Asia Pacific revenues fell 5.5%, lead by China down 1%, while Hong Kong sales rose 32% currency-neutral.

    Overall, net profit dropped 23.1% to €59 million.

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  • Millennials’ love for luxury brands focuses on two brands

    Millennials’ love for luxury brands focuses on two brands

    Millennials feel better about their future earnings than older consumers and spend more on luxury goods.

    That’s according to a survey of more than 3,000 consumers across China, Europe and the US by UBS Group AG. Eighteen to 35 year olds have contributed 85 percent to growth in the luxury market last year and will represent 45 percent of total high-end spending by 2025, according to the report published Friday.

    Gucci and Louis Vuitton are millennials’ favourite brands, according to the survey and social-media data analysed by UBS.

    While the intent to buy online is higher in the age group than among older consumers, physical stores continue to feature highly among preferred places to shop.

    Chinese millennials, a major driving force behind sales growth, allocate about 20 percent of discretionary income to purchasing luxury goods, a similar share as older generations.

    Nearly 70 percent of Chinese Millennials expect their personal financial situation to improve in the next 12 months, compared to 65 percent of Chinese respondents aged 35 or more.

    That is good news for companies selling luxury goods, considering Millennials drove 85 percent of the sector’s growth last year. In fact, luxury fashion labels which have been performing well lately have a high percentage of sales from Millennials.

    For example, UBS estimates 65 percent of Saint Laurent’s revenues to have come from this age group in 2017, while Gucci’s Millennial sales were estimated in 50 percent. Louis Vuittonobtained approximately 33 percent of its profits from consumers aged 21-37, as claimed by UBS.

    Younger people in Italy and the US have higher spending budgets than their elders, according to the report.

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  • Louis Vuitton dominates fake products seized in Korea

    Louis Vuitton dominates fake products seized in Korea

    South Korea’s Customs service has released an intellectual property infringement report detailing the most-seized counterfeit goods over the past four years.

    According to the report, South Korean officials seized more fake Louis Vuitton products than any other between June 2014 and June this year, a trend that accelerated over the period.

    Agents seized KRW183.1 billion (US$224 million) worth of LV-trademarked counterfeit goods, mostly originating from China. Almost a quarter of those goods were seized within the last six months alone.

    Democratic Party lawmaker Kang Byung-won, who commissioned and released the report, said: “Making and distributing fake goods is a criminal act that violates intellectual property rights, and it is required to toughen crackdown on such illegalities.”

    Other frequently counterfeited brands include Rolex watches, Cartier jewelry, Chanel garments and accessories, and Gucci products.

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  • Luxury group Kering reports positive numbers

    Luxury group Kering reports positive numbers

    Fashion giant Kering’s decision to focus the business on luxury appears to be paying off.

    In what chairman and CEO Francois-Henri Pinault termed “dazzling top-line and earnings performances” during the first half year, total revenue rose 33.9 per cent on a comparable basis and operating margin rose above 30 per cent for the first time in the company’s history.

    Kering sales in Asia rose by 37.6 per cent, excluding Japan, where sales rose by 30.7 per cent. That growth rate lagged the US, (up 45.4 per cent) but was well ahead of Kering’s home European market’s 25.1 per cent. Online sales more than doubled.

    While the growth occurred across most of the company’s brand portfolio, Gucci clearly led the way with sales up 44.1 per cent on a comp basis and margin from recurring operations reaching 38.2 per cent. Yves Saint Laurent sales rose 19.7 per cent.

    Revenue from Bottega Veneta was stagnant, up just 0.9 per cent, but all the other houses collectively rose by 36.5 per cent, led by Balenciaga and Alexander McQueen.

    First-half year consolidated revenue was €6.432 billion, up by 26.8 per cent before taking into account exchange rate influences and changes to the group structure. A year earlier, Kering’s portfolio included sportswear label Puma, a majority stake of which has since been spun off.

    Net income rose 185.7 per cent to €2.36 billion, although just over half of that was a capital gain resulting from the sell-down of Kering’s Puma stake.

    Pinault said Kering’s growth was “grounded in the exclusivity and desirability of our brands”.

    “The development model we implement across our houses paves the way for increased value creation as well as profitable, sustained and consistent organic growth. While facing increasingly demanding comps and an uncertain global environment, we will once again substantially enhance our financial and operating performances in 2018.”

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  • Gucci to launch limited-edition tattooed handbag

    Gucci to launch limited-edition tattooed handbag

    Gucci is launching a faux-leather tattooed handbag collection with Italian artist Gabriele Pellerone, best known for his cutting-edge paintings.

    The fashion house will take orders for 100 handbags from next January.

    Customers will be able to choose from a set of designs developed by the Gucci design team with Pellerone and displayed on Gucci’s website.

    Prices have not yet been disclosed.

    There will be a demonstration of the tattooed handbags at the “Autumn Equinox: Collective Visions in Abstraction and Figuration” exhibition on September 21 at the Agora Gallery in New York City.

  • It is sneaker time for luxury fashion

    It is sneaker time for luxury fashion

    What do you get when luxury fashion meets sport? $10,000 sneakers.

    High-end brands such as Kering’s Gucci, Prada and Balenciaga are increasingly looking to sneakers for growth, putting them in direct competition with sportswear giants like Nike, Puma PMUG.DE and Adidas, and giving rise to ever-more striking and expensive designs.

    Luxury groups say they are now increasing investments and marketing budgets to face down their new opponents.

    “When I saw sneakers were going to be a thing, I fought it for a bit,” Salvatore Ferragamo’s (SFER.MI) designer Paul Andrew said at a conference. “We’re definitely now investing heavily in that category, getting in very specialized people”.

    Global sales of sneakers – or trainers – rose 10 percent to 3.5 billion euros last year, outperforming a 7 percent rise in handbags, according to consultancy Bain & Co.

    “It’s not really even a trend anymore – it’s become a category,” said Bruce Pas, Men’s Fashion Director at U.S. department store Neiman Marcus.

    Both luxury groups and sports companies are looking to cash in on a booming market. Premium sneakers can start at around $400 but can easily rise as high as $3,000, for a pair of Christian Louboutin’s leather, crystal-embellished sneakers.

    Limited editions can sell for well over $10,000, including the Chanel X Pharrell Hu Race Trail or Nike’s Air Jordan 3 Retro DJ Khaled Grateful.

    Sneakers are a big driver of the luxury shoe business, which accountancy firm EY says is the fashion industry’s fastest-growing area.

    The rise of luxury sneakers is part of the growing influence of casual and streetwear in high-end fashion, where it is now acceptable to team sneakers with a tailored suit.

    Upmarket brands are tapping into street style to refresh their looks and young buyers are driving the shift. “Millennials” – born between the early 1980s and mid-90s – already represent a third of the luxury market, according to Bain.

    Several luxury group executives recently noted the importance of sneakers for their business and the need to step up their game to face the rising competition.

    Emilio Macellari, finance chief of Italian luxury goods company Tod’s – a pioneer in the sector, having launched its first Hogan luxury sneaker in 1986 – said “there is no brand that is not currently considering its (sneaker) offer”.

    Pointing out how times are changing, he said luxury brands were now “under attack” from sportswear companies, on top of the usual competition from their luxury peers.

    But so-called “sneakerisation” could steal market share from more traditional and formal-looking footwear, industry operators say.

    “What has changed is competition, with a clear overlap,” said Claudia D’Arpizio, partner at Bain & Co. “Luxury consumers are buying Nike and Adidas and vice-versa”.

    “If (luxury groups) go the sports way… it is only positive,” said Puma Chief Executive Bjorn Gulden said. “If that is a trend that pulls the sneaker market up, we can only be happy.”

    Analysts also say the intensifying competition is unlikely to erode profit margins because the market is expanding.

    “There is large space for prices moving up,” said Erwan Rambourg from HSBC. “The ‘luxurisation’ of sneakers could possibly impact margins positively”.

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  • Gucci unveils Gucci Equilibrium

    Gucci unveils Gucci Equilibrium

    Gucci has its finger right on the pulse of the fashion industry, as its latest initiative, Gucci Equilibrium, solidifies its position as a sustainable, responsible as well as highly-desirable luxury fashion house.

    Today, on World Environment Day, the Italian fashion house launches its new online destination at Equilibrium.gucci.com, “designed to connect people, planet, and purpose,” as ideas surrounding what it means to be luxury continue to evolve.

    The initiative is part of Gucci’s mission to balance the creation of luxury fashion with a radical sustainability agenda, as its parent company Kering continues strives to offer the best products, made in the best way out of the best materials while taking the best care of the planet and its inhabitants.

    “Gucci is not a company where you must leave your values at the door, but one where they are enhanced, challenged and amplified,” said Marco Bizzarri, Gucci President and CEO in a statement. “Gucci Equilibrium is about us spreading that energy and that positive intent to everyone who loves our brand.”

    The new platform shares curated content which showcases the stories, ideas and the science behind Gucci’s environment and social impact change, all while highlighting the luxury fashion house’s perspective on some of the key issues within the industry.

    The launch is part of Gucci’s wider 10-year plan to embed a comprehensive sustainability strategy into its brand, one which will be governed by a Culture of Purpose.

    In turn, this Culture of Purpose dictates Gucci’s operations on a daily basis, which are held in place by three pillars that include the environment, people and new models of sustainable innovation. Under the first pillar, Environment Gucci highlights its commitment to reduce its environmental impacts by setting targets to develop a new standard in luxury.

    For example, on the new platform readers can learn more about Gucci’s aim to guarantee the traceability of 100 percent of its raw materials by 2025 – a tall order for any brand.

    People, the second pillar, sees Gucci recognizing the value of its employees and working to enhance the lives of the individuals who make its products by supporting local communities. For example, Gucci is committed to fighting gender inequality through its Chimes for Change for Girls’ and Women’s Empowerment campaign.

    Gucci Equilibrium also shines a light on I was a Sari, a social enterprise which works with women from marginalised communities in Mumbai, teaching them new skills to bring in recurring income.

    At the same time, Gucci also underlines its use of technical innovation to improve efficiency in its production and logistics under its third pillar, New Models. For example, its newly opened Gucci ArtLab, offers a start-up environment for innovation, craftsmanship and experimentation.

    “These are critical times when we can all play our part in helping to deliver on the UN Global Goals and the Paris Climate Agreement,” added Bizzarri. “The only way to do that is by bringing people together, sharing ideas, innovation, and experiences. This is the objective we have set for Gucci Equilibrium.”

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  • Gucci succesfull for Kering sales

    Gucci succesfull for Kering sales

    Kering sales rocketed 36.5 per cent in the first quarter of this year, reaching €3.108 billion (US$3.8 billion), led by Gucci’s staggering 48.7 per cent improvement.

    “Kering maintained its outstanding sales momentum in the first quarter,” said Kering chairman and CEO Francois-Henri Pinault. “Under its new luxury pure-player profile, the group clearly outperformed a market that remains well oriented,” he said.

    After including discontinued operations – Puma, Volcom and Stella McCartney, which Kering has divested its interests in – sales growth was still up 27.1 per cent.

    Gucci’s “spectacular growth” included a 49.4 per cent leap in Asia Pacific and 64.4 per cent in North America. Gucci sales for the quarter totalled €1.866 billion.

    “Gucci, Saint Laurent and Balenciaga set a high mark within a group that delivered sharp growth as a whole,” said Pinault. “In the balance of the year, we face a high base of comparison and a tough currency environment, but we are confident in the ability of our Houses to continue doing better than their peers, leveraging their innovativeness and creative audacity.”

    Yves Saint Laurent sales rose 19.6 per cent (including 23.6 per cent in Asia Pacific) while the combined contribution of Alexander McQueen, jewellery and watches recorded a 37.9 per cent improvement. Even troubled Bottega Veneta improved by 0.7 per cent (including a 5.8 per cent lift in Asia Pacific), the first visible impact of a restructuring plan. New lines were “well received,” according to Kering, and ready-to-wear fared well, but wholesale slipped “slightly” in the quarter.

    “The House is continuing to optimise its store network and strengthen its visibility through a communications strategy designed largely for digital media.”

    Balenciaga led a 37.9 per cent improvement from ‘Other Houses’, Kering’s smaller luxury brands.

    “Watches and jewellery performed very well this quarter. The strengthened positioning of Boucheron, Pomellato and Qeelin are paying off, thanks to new collections, extended iconic lines and investments in communications and store networks. Watches also turned in a good performance this quarter,” said Kering.

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  • Gucci adds some coolness to cassette tapes

    Gucci adds some coolness to cassette tapes

    Luxury Italian fashion brand Gucci is helping make cassette tapes cool again in a collaborative collection with the Waltz shop in Tokyo’s Nakameguro district.

    Special Waltz-inspired patches are featured on six products, including a Boston bag, shoulder bag and wallet, which are available at the cassette tape specialist. The Gucci Aoyama flagship will also start selling the products this month.

    Intended to support the shop’s cassette tape activities, the collaboration is one of an exclusive series based on Gucci’s Courier collection. Waltz is one of seven international locations named as “Gucci Places” that reflect the contemporary aesthetic sense of the brand’s creative director, Alessandro Michele.

    “Almost no-one thinks the cassette-tape business will grow, but tapes have created a new trend,” says Waltz owner Taro Tsunoda.

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  • Nike is world’s most valuable apparel brand, says Brand Finance Top 50

    Nike is world’s most valuable apparel brand, says Brand Finance Top 50

    Despite losing popularity with American teenagers and a drop in brand value of 41 per cent, Nike is still way out in front in the Brand Finance Top 50 list of the most valuable apparel brands in the world.

    In the list, just been release by the independent brand valuation and strategy consultancy, Nike’s main competitor Adidas was fourth behind H&M and Zara with an increase in brand value of 41 per cent.

    In the realm of luxury brands, Hermes overtook Louis Vuitton, jumping two spots from 7th to 5th from last year. Luxury brands including Cartier, Gucci, Hermes and LV had strong growth in value as more consumers in emerging markets buy into the market.

    Japan’s Uniqlo was the only Asian brand in the top 10, with Hong Kong jeweller Chow Tai Fook and China’s Anta Sports taking up the 13th and 33rd spots respectively.

    These are the top 50 most-valuable apparel brands in the world this year:

      1. Nike (brand value, US$2.8 billion)
      2. H&M ($1.8 billion)
      3. Zara ($1.7 billion)
      4. Adidas ($1.4 billion)
      5. Hermes ($11.3 billion)
      6. Louis Vuitton ($10.4 billion)
      7. Cartier ($9.8 billion)
      8. Gucci ($8.5 billion
      9. Uniqlo ($8 billion)
      10. Rolex ($6.3 billion)
      11. Coach ($6.1 billion); 12. Victoria’s Secret ($6.1 billion); 13. Chow Tai Fook ($5 billion); 14. Tiffany & Co ($4.6 billion); 15. Burberry ($4.5 billion);16. Christian Dior ($4 billion); 17. Polo Ralph Lauren ($4 billion); 18. Prada ($3.8 billion); 19. Under Armour ($3.7 billion); 20. Armani ($3.5 billion)
      12. Puma ($3.3 billion); 22. Ray-Ban ($3.2 billion); 23. Omega ($3.1 billion); 24. The North Face ($3.1 billion); 25. Pandora ($3 billion); 26. Michael Kors ($2.7 billion); 27. Tommy Hilfiger ($2.6 billion); 28. Anta ($2.6 billion); 29. Old Navy ($2.3 billion); 30. Bulgari ($2.2 billion)
      13. Bershka ($2.2 billion); 32. Calvin Klein ($2.2 billion); 33. Levi’s ($2.2 billion); 34. Primark/Penneys ($2.1 billion); 35. Moncler ($2 billion); 36. Boss ($2 billion) 37. Gap ($2 billion); 38. Ferragamo ($1.9 billion); 39. Saint Laurent ($1.8 billion); 40. Bottega Veneta ($1.8 billion)
      14. Valentino ($1.8 billion); 42. Skechers ($1.6 billion); 43. Swatch ($1.6 billion); 44. Tag Heuer ($1.5 billion); 45. Timberland ($1.4 billion); 46. Massimo Dutti ($1.3 billion); 47. Reebok ($1.3 billion); 48. Woolworths ($1.2 billion); 49. Stradivarius ($1.2 billion); 50. Pull and Bear ($1.2 billion).
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  • Gucci korea reopened its flagship store by going back to basic

    Gucci korea reopened its flagship store by going back to basic

    Italian luxury house Gucci opened the doors to its renewed Korean flagship store in Cheongdam, Southern Seoul, giving fashionistas a new reason to visit the neighborhood.

    The three floors of the shop carry the brand’s most popular items, from bags, wallets and shoes to clothes and the newly launched “Gucci Deco” home-furnishing items.

    Just a few years ago, Gucci was regarded as a luxury brand with a slightly old-fashioned design that failed to appeal to younger trendsetters. But after Alessandro Michele took the helm in 2015 as creative director, Gucci has started a whole new chapter in its history, becoming the most searched for brand on Google in 2017, and adding over 8 million followers on the Gucci official Instagram account.

    Their success was attributed not to trying something entirely fresh, but to Michele’s decision to get back to basics, returning to the vibrant colors and patterns of the old archives, but adding a 21st century twist. His designs were vintage, but not too classic – bold but not gaudy.

    The flagship store carries all the popular items that made Gucci the hottest brand in town, within an interior of walls decorated in old rose, and antique carpets that add a classy ambience to the overall space. The toned-down color of the walls lends a stark contrast to the colorful products on display.

    Visitors to the store can see all of Gucci’s treasures in one space, but there are two distinct reasons why the new shop is worth a look: the do-it-yourself (DIY) zone and the Korean edition goods only available at the flagship store.

    The two DIY zones are located on the second and third floors and are both equipped with different ready-made patchworks and pins that, when guests choose from them, staff members are ready to sew them on in different ways. On the second floor, visitors can decorate their very own jackets, while on the third, one can create DIY handbags and clutches.

    Also available are the Korea-exclusive edition items, which have been embroidered with a Korean tiger that differs from any of the animals usually seen on other Gucci products. The unique Korean tiger is printed on men’s Beastiary bags, wallets and Princetown shoes, which can only be found in this particular shop and nowhere else in the world.

    And while they don’t have their own DIY zone, many of the women’s sneakers have metal buttons on them, which allow the wearer to snap different patches into place and change them as one likes.

    “The Gucci flagship store is like a cabinet of curiosities that’s made to please and inspire visitors,” said a staff member on the day of the opening. “The store is a space where you can experience the unique brand culture of Gucci.”

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  • Kering to celebrate new sales record

    Kering to celebrate new sales record

    In a “phenomenal” result, global luxury group Kering had record operating revenue last year, driven in large part by the popularity of Gucci.

    Kering’s income totalled €15.4 billion (US$19 billion), up 25 per cent as reported or 27.2 per cent on a comparable basis. Revenue from luxury activities was up 27.5 per cent as reported, or 29.9 per cent on a comparable basis, while for sport and lifestyle activities, revenue was up 12.8 per cent as reported or 14.7 per cent on a comparable basis.

    Describing it as a phenomenal year, chairman/CEO François-Henri Pinault says the group created more than €3 billion in extra revenues in a single year, and generated more than €1 billion in additional EBIT.

    In a performance “nothing short of spectacular”, Gucci was amplifying its desirability across all markets.

    “Saint Laurent is on a rapid growth track, while Bottega Veneta pursues its redeployment. Balenciaga is charting an impressive development trajectory, and our other luxury brands are experiencing positive momentum,” says Pinault.

    Revenue for luxury activities topped €10 billion last year, up 29.9 per cent year on year based on comparable data. Comparable growth was up 44.6 per cent for Gucci and 25.3 per cent for Yves Saint Laurent.

    Other luxury brands saw accelerated revenue growth (up 14.1 per cent on a comparable basis), especially Balenciaga, which delivered the fastest growth rate of all group brands in the second half.
    Puma’s revenue topped €4 billion for the first time, a rise of 15.8 per cent on a comparable basis, while recurring operating income for the brand jumped 92.7 per cent.

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  • Here’s Why Pre-Owned Luxury Fashion Are Growing In Asia

    Here’s Why Pre-Owned Luxury Fashion Are Growing In Asia

    Asia’s pre-owned luxury fashion market is continuing to grow, with shoes and t-shirts gaining ground, according to multichannel retailer Reebonz.

    Although bags continued to dominate, with an average of 77 per cent of total transactions in 2016 and 2017, both shoes and apparel achieved steep sales growth throughout the region, according to Reebonz’s now annual Asia Luxury Index.

    In Hong Kong, for example, sales of used branded sneakers rose 48 per cent last year, while “luxury t-shirt” sales soared six-fold.

    The report is based on Reebonz’s own trading data across Australia, China, Hong Kong, Indonesia, Malaysia, New Zealand and Singapore, along with unspecified “industry reports”.

    Reebonz says millennials are driving the sector’s growth, “tilting the scales in favour of a pre-owned luxury market that continues its growth trajectory”.

    Chanel, the most-purchased pre-owned brand by millennials, recorded more than double the total sales value on Reebonz last year over 2016.

    The report said the changing perceptions towards pre-owned luxury have altered the state of resale and how consumers shop today, contributing to 40 per cent sales growth in the pre-owned category at Reebonz.

    “The growing demands of buying from the resale market cleverly gives rise to a community of individual sellers, injecting the luxury ecosystem with products that meet these needs,” said Reebonz cofounder Daniel Lim.

    Louis Vuitton, Hermes and Chanel were the three top-selling brands on Reebonz last year, fetching resale values as high as 125 per cent of their original retail price in the secondary market. Gucci, Celine and Dior were also among the top 10.

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  • Florence’s Gucci museum opened a restaurant with the world’s best chef

    Florence’s Gucci museum opened a restaurant with the world’s best chef

    Luxury fashion brand Gucci has opened a 50-seat restaurant, Gucci Osteria, in Florence featuring triple-starred Michelin chef Massimo Bottura.

    This follows in the tracks of Giorgio Armani offering fine-dining restaurants at its hotels in Dubai and Milan, the Dolce & Gabbana Gold Restaurant and Dolce & Gabbana Martini Bistrot in Milan, and Ralph Lauren with Ralph’s Restaurant in Paris. Roberto Cavalli also has an international chain of cafes.

     

    LVMH last year also announced it would open a second branch of its gourmet grocer La Grande Epicerie in Paris, days before Tiffany’s & Co launched its Blue Box Cafe in New York. LVMH also owns Cova Pasticceria, which has a strong international presence along with Prada’s Pasticceria Marchesi.

    In Seoul, Dior runs the Dior Cafe at its flagship store, in partnership with patissier Pierre Herme.

     

  • Is Amazon threatening luxury?

    Is Amazon threatening luxury?

    Amazon has been struggling to recruit luxury brands to sell their good on its platform, but there is one way that it could make its marketplace more of a destination for shoppers looking for certain tiers of luxury products.

    Amazon could launch vertically integrated, mass-customized brands of its own that use technology to smooth the customer shopping process, similar to Indochino.

    While Amazon is not likely to get catalog coverage from many of the ultra-luxury brands, it does have the ability to make a number of mid-level luxury brands less relevant to large segments of Amazon customers, replacing those brands through the merchandising of its own private-label luxury brands at prices that encourage even the slightly price-sensitive luxury products customer to consider a cheaper alternative, available directly from Amazon.

    There will always be customers who want nothing other than the $10,000 handbag with that special brand name, or the $3,000 suit from Armani or Gucci. Yet for millions of Amazon Prime customers, the prospects of “affordable luxury” becomes available through something like an Indochino model.

    Brands like Brooks Brothers, Hugo Boss, Zac Posen, Tom Ford and Burberry that may today be aspirational for millions of Amazon customers could be replaced with Amazon’s own mid-level luxury brands, made at comparable quality with perfect custom fitting and a much lower price. Such a model has the potential to wipe out much of the apparel advantage Stitchfix has created for itself over past few years.

    Indochino is a direct-to-consumer manufacturer of custom suits for shirts for men. While production is based out of China, it offers U.S. customers the opportunity to get sized either through a measurement process online using videos, or in a limited number of storefronts based in major metropolitan locations throughout the United States. For under $400, Indochino is able to manufacture a custom-fitted garment and shrip it to the U.S. or Canadian customer within 3 weeks.

    Comparable pricing for a U.S.-tailored suit including luxury brands would range from $1,500-$3,000. While a luxury U.S. brand in the U.S. is likely to require 2-3 weeks for custom tailoring of an off-the-rack suit, the custom-made Indochino suit sells for a fraction and promises a better fit because it was made using the customer’s body measurements.

    Let’s say Amazon bought Indochino, or built its own comparable model, and expanded it into women’s clothing too.

    Then Amazon uses some variant of technology from its new acquisition Body Labs to develop a system for measuring customers’ dimensions. With such technology onsite at a range of retail studios across the country, Amazon now would have the dimensions of millions of Prime customers, and would be able to offer them its own custom-fit luxury-quality brands.

    Using pin-point merchandising, Amazon could target these brands to specific customers that have searched for comparable luxury brands on Amazon already. Amazon’s scale and ability to accept low margins would quickly turn the mid-luxury brand customer towards Amazon, and away from so many of the luxury brands that have declined to distribute their products on Amazon.

    With any decent scale, Amazon would have competitive manufacturing costs, the ability to up-sell and cross-sell all sorts of other items (apparel and non-apparel), all the while being comfortable with much lower margins than a typical luxury brand. With an already generous returns policy, Amazon could offer customers the opportunity to buy lower-priced custom-made items, returning whatever items the customer did not like. I do not know of any other apparel brand that could compete effectively with such a model.

    The prospect that Amazon could win part of the customer’s wallet that today goes to luxury brand purchases externally should be on the radar of mid-tier luxury brands, and a ray of hope that more consumers will be able to afford a luxury look at lower prices.

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