Ralph Lauren and Michael Kors Profits Decline From Discounting

Department stores have had sales and profits decline for a while. To get more people to make purchases, department stores have been discounting products. Two of the brands that have been discounted the most are Ralph Lauren and Michael Kors and profits at both of those brands have declined because of it.

According to an article on Bloomberg, both Ralph Lauren’s and Michael Kors’ profits have declined because of department store discounting. The brands were two of the most discounted at upscale retail stores according to Edited, a company analyzes data for the fashion industry.

Edited found that fashion brands and retailers have been discounting products as much as 80% in May, June, and July. Having all these deals and specials has given department stores more shoppers but it is making brand’s profits decline and customers are starting to expect discounts. That has prompted Michael Kors and other brands to try and stop all the deals and discounts. Retailers, however, can’t afford to sell products at full price anymore.

Online shopping has made it difficult to charge full price for items. Shoppers can get items online, often for more affordable prices. They can even get similar items from different brands.

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That, as well as less tourism and smaller budgets is giving department stores and malls less shoppers which makes them have more discounts.

Michael Kors has been trying to stop all sales and discounts at department stores. Other brands like Kate Spade have been cutting promotional days. Ralph Lauren, however, is lowering the amount of excess inventory even if profits decline and Coach plans to close 25% of its department store locations.

This will still be difficult regardless of whether department stores can afford to charge full price or not.

Stores and brands all have sales and discounts every holiday as well as their own sales like Nordtrom’s anniversary sale.

What’s more, outlet stores are becoming a lot more popular with shoppers. Sales at Nordstrom Rack increase by 11% in the second quarter where sales at Nordstrom’s full price stores and website declined by 0.4%.

With all these sales an discounts, fashion brands don’t know what to charge for products anymore. Brand’s can still increase profits, though, as they can sell products online or in their stores.

So, what do you think? Will brands sales and profits increase? Let me know in the comments below. Also, don’t forget to subscribe to get new posts sent directly to your inbox and follow me on Facebook, Instagram, and Snapchat.


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