Perhaps it's in the spirit of our new president admitting the he "screwed up" with some of his cabinet appointments, or maybe not, but Saks Fifth Avenue's chief merchandising officer Ron Frasch, admitted that at least some of the early, deep markdowns the store took last fall were a bit deeper than necessary. "We didn't need to do what we did in accessories," he told The Wall Street Journal, and also indicated that shoes would probably have sold at less of a discount as well.
Well, that's something.
Saks royally pissed off most of the fashion industry last November with its drastic November sales that forced competitors to slash their prices in response, and, even worse, forced several well known and much loved independent boutiques out of business altogether. The Journal has an in depth look at the ramifications of these markdowns, including the possibility that some stores may make only parts of their collections available to department stores, reserving the rest for their own stores so they won't have to compete with reckless markdowns again. Apparently, many Saks execs wanted to hold the markdowns at 50%, but Frasch and chief executive Steve Sadove insisted on 70% practically across the board. Basically, Saks is on everyone's $#!‡ list.
Here are some quotes:
In New York, American designers started contacting [Diane] von Furstenberg, the head of their trade group [CFDA], looking for advice. "I was very upset. Everyone was," the designer says. That level of price-cutting "cannot happen again," she says.
Has Saks singlehandedly ruined full price selling? Time will tell, but as buyers go into market for the Fall collections, they will have a lot of fence mending to do with designers who will have to decide if they can afford to do business with a major store who has undercut their business with all their other accounts.
Saks Upends Luxury Market With Strategy to Slash Prices (The Wall Street Journal)