![]() The department store channel is a mess and footfall is down strongly across most stores which puts real pressure on the sales of brands like ," Saunders wrote in an email. "The wholesale numbers are to be expected. (They also can't control if a Macy's location looks like a hot mess.) "When you're in wholesale there's a lack of control in their brand, and ultimately the department store is going to do what they have to do to drive sales - and that includes promotional activity," Gabriella Santaniello, analyst and founder of consulting firm A Line partners, told Business Insider recently. A brand also cannot control the promotions that department stores - like Macy's - while execute in order to bring in foot traffic. They can't control how the brand looks in a department store (unless it's a licensed section, like an LVMH brand or a cosmetics brand). The handbag category as a whole has been struggling, largely because department stores have marred their reputations. "Secondarily, we think it's creating confusion in the consumers' mind relative to the value of the Michael Kors brand, when it's being seen so often on sale in so many different places," he said. And we don't think that's the right thing to do for our brand going forward." "As you know, that channel has become very promotional and, in fact, is causing us difficulties in our own retail channel, which is why you see our gross margins declining because we're really trying to meet certain pricing that's happening to be competitive. Idol said on a conference call with investors. "We think that this is critical for us to really do three things number one, to protect our brand image," CEO John D. ![]() If a brand becomes known as an "outlet" brand, how could it be considered luxurious?īut Michael Kors has a strategy to save itself: it announced on earnings call on Wednesday that it would be ending its participation in department store couponing and friends and family discounts. Outlets are arguably a magnified version of this, only worse. ![]() Consider Gap's Banana Republic: everything's on sale, so why shop at a premium? It's common knowledge that once you start shopping for discounts, it's hard to not consider a brand to be a discount retailer. It's tough to get consumers to pay a premium when they know they can get something on sale. Account icon An icon in the shape of a person's head and shoulders.
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