ichaoren

It hasn't been an easy year for Saks for louis vuitton outlet. Along with many other luxury retailers, the 111-year-old department store has seen sales fall dramatically since the start of the recession. Last holiday season, it was criticized for discounting items up to 70%, long before the traditionally sale-heavy post-Thanksgiving week.

Today, New York-headquartered Saks (SKS - news - people) reported its earnings for the second quarter of 2009. The retailer lost $54.5 million, or 39 cents per share, in the three months that ended Aug. 1. That compares with a loss of $32.7 million, or 24 cents per share, a year earlier. Sales were down by 15% to $561.7 million when compared with the same quarter last year. Its competition was similarly hard-hit: Dallas-based Neiman Marcus saw a 23% decline in year-over-year Q2 sales for stores open at least one year; Nordstrom ( JWN - news - people ) saw a 9.8% decrease in the same period.

Despite the dismal numbers, however, Saks did manage to beat analyst estimates on the quarter, mostly due to cost-cutting and a reduction in inventory. For the fall and holiday seasons, Saks' strategy is to keep inventory levels low and to introduce new products at a lower price point, such as its new Saks Fifth Avenue Men's Collection, an in-house brand featuring $1,000 Italian wool suits, $300 cashmere sweaters and $135 dress shirts--moderate prices compared with luxury brands like Brioni, Kiton and Louis Vuitton, which sell off-the-rack suits for $5,000 to $15,000.

Analysts believe introducing lower-priced merchandise is a good move, but when it comes to shrinking costs, a retailer can only do so much. Luxury consultant Pam Danziger, president of Unity Marketing, a Stevens, Pa., research firm focused on wealthy consumers, says Saks' results are representative of the troubles luxury department stores are facing as a whole. Here, she discusses the root of the problem, and what these retailers can do to woo consumers in time for the holidays.

Forbes: What do you think Saks' losses say about the state of luxury department stores?

Danziger: Our research suggests that while the affluent consumer still isn't spending on personal luxuries--like fashion--spending on the home is beginning to pick up. Retailers like Saks that rely on sales of clothing and accessories are still having trouble clearing out inventory.

What do you think the holiday-season strategy of luxury department stores will entail?

I think that there will still be a quite a lot of markdowns. What we're seeing is that luxury consumers have become smarter about their purchases. [Luxury department store executives] have got to step back and realize that nobody needs anything that these stores sell. So many retailers haven't come to terms with the fact that consumers were on an extended buying spree for the last 10 years. Our closets are full, our attics are full and our basements are full. We have more than enough stuff.

What do consumers want, then?

What's empowering today's consumer is not money, it is smarts. She's too smart to pay the prices that these retailers are charging. The average price of designer shoes has doubled in just a couple of years. Today, there is wide selection of alternative brands that sell high-quality shoes under $500. Why would a shopper buy a pair of $800 shoes when you can get a pair of Cole Haans for $300?

What can retailers like Barneys New York, Neiman Marcus and Saks do to draw people back into the stores?

I think that the most important thing any luxury retailer can do today is take time to understand their consumer. These brands aren't doing their due diligence. They're listening to hopes, dreams and wishes--not the reality. Retailer executives need to ask themselves, "How can I add more value? How can I find brands that have an edge that makes them different and special?"

Whether it's through reasonable pricing or uniqueness, retailers need to give consumers a reason to buy. One great reason to buy is a sale, but products with a difference--that are marketed properly and that fill a need--will also attract customers. Michelle Obama has showed consumers that you can dress fashionably with J.Crew and White House, Black Market. You don't need to wear designer clothes anymore to look good. So luxury louis vuitton sale retailers need to bring something extra to the table for us.

Source from: http://www.louisvuittonoutletoe.com/blog_show.php?id=7