Stores forced to slash prices on luxury items
Although the discounts are part of biannual sales, department stores are offering new deals to pull in customers and get them to open their wallets. The stores started offering discounts on luxury brand items last Friday.
At all of its branches, Shinsegae Department Store is holding a “premium brand sale,” in which discounts are offered on both traditional and contemporary luxury brands, including Ferragamo, Giorgio Armani, Yves Saint Laurent, Vivienne Westwood and Marc by Marc Jacobs.
“This time, we have increased the overall quantity of luxury items by 20 percent compared to the previous year,” said an official from Shinsegae. “The sale is targeted at consumers who have turned their backs on us and [are spending] via other retail channels like outlets and online shopping. We are also offering various gifts to try and reverse a depressed consumer sentiment.”
Until Sunday, customers who spend over 2 million won ($1,952) on a single luxury brand with their Shinsegae Cards will be given vouchers worth 5 percent of the total amount spent. Also, from Wednesday to Sunday, customers who spend 100,000 won or more with their cards will be given umbrellas for free.
With discounts of up to 30 percent, a Givenchy bag is in the 1.8 million won range, a Loewe bag is in the 2 million won range and a Tom Ford bag in the 2.5 million won range. Luxury shoes including Jimmy Choos can be bought for between 400,000 won and 700,000 won.
Meanwhile Lotte Department Store started its sale on luxury brands earlier than last year to get a head start.
Since last month, Lotte has been offering discounts on 40 luxury brands including Mulberry, Etro and Kenzo. Twenty more brands have been added this month with up to 30 percent discounts being offered on brands like Givenchy and Yves Saint Laurent. Customers who spend 1 million won or more on luxury brand items from Friday to Sunday with their Lotte Cards will be offered interest-free installment pay plans.
Department stores need to reach out to customers after changes in buying behavior and a dull economy hurt sales.
According to the Ministry of Trade, Industry and Energy, the year-on-year sales growth at department stores have been low compared to two years ago. In the first quarter of 2011, for example, sales at local department stores jumped 14.3 percent compared to the previous year while the growth rate was 10.7 percent in the following quarter.
However, in the first quarter of this year, sales at department stores grew only 1.1 percent from the previous year.
“Unlike in the past, there are now shopping malls and retail outlets to buy things,” said an industry official.
BY LEE EUN-JOO [firstname.lastname@example.org]