Expensive retail stores such as Saks Fifth Avenue and Neiman Marcus are retraining customers to paying high prices for exclusive goods this holiday season…

• Retailers have driven prices up and maintained sales during this fall by keeping inventory low and promoting a sense of exclusivity.
• Over the past year, consumers became accustomed to seeing large discounts not only at “big-box retailers” such as Walmart, but also at high-end stores such as Saks.
• Earnings are improving for large stores because they are selling more items at full price, as opposed to same amount of items at discounted prices (as in Fall / Winter 2008).

Facts & Figures

• In the fall and winter of 2008, merchandise in luxury stores was discounded as much as 50-70% off full price
• Inventory at Saks is down by double digit percentage points compared to last year
• By keeping inventory low this holiday season and playing up the exclusivity factor, retailers can keep items at their full price

Best Quote

“What’s luxury retailing about? It is about a scarcity of supply.” – Stephen I. Sadove, Chairman and Chief Executive of Saks Fifth Avenue