Label Under Construction (Luca Laurini)

[jcotteri]

Most stores will be losing money on a garment if it has more than 25% discount, and that's the well run ones!

This I find much more difficult to believe.. I know that I don't have the knowledge that you do (working in the lovely shop that you do), but I'm not able to swallow this at all. I understand that a shop costs lots to run, but I don't think that taking 25% off a garment would cause the shop owner to loose out. If this were true then surely many (well run) stores wouldn't even exist anymore. No offense meant..

please feel free to explain to me why this is so.

[hobo]

This I find much more difficult to believe.. I know that I don't have the knowledge that you do (working in the lovely shop that you do), but I'm not able to swallow this at all. I understand that a shop costs lots to run, but I don't think that taking 25% off a garment would cause the shop owner to lose out. If this were true then surely many (well run) stores wouldn't even exist anymore. No offense meant..

please feel free to explain to me why this is so.

No offence taken. I really don't care whether you believe me or not! It's simply a fact. Whether you believe it or not is inconsequential.

[Enaml]

Would you mind explaining why this is the case? Or is it essentially summarized in the past few pages?

[Faust]

Because of all the overhead costs of running a store, obviously. Rent, wages, utilities, taxes, etc. etc.

[Faust]

Merz, I was talking specifically about hobo saying that at 25% off the store breaks even on a product, which I thought Enaml was referring to as well.

[Faust]

I don't know, merz. It looks like there are enough wealthy buyers changing this finite amount of goods. I am in the same boat as you.

[Enaml]

I think that generally answered my question, Merz and Faust. Thanks. Being a poor college student with very little to spend on clothing at the moment, most of the nice pieces I've acquired have come second-hand. I don't have the 'ins' required to buy directly from designers or anything, so this is about the only way I can afford most things.

I like the concept of truly connecting with pieces as you sacrifice something for them, but unfortunately there are always people (the ballerest of ballers?) who really don't see what they spend as a sacrifice. To them, it's pocket change, and who's to say they can't do what they want with it? It's an unfortunate situation, I think...

[delirium]

That is absolutely correct. Most stores will be losing money on a garment if it has more than 25% discount, and that's the well run ones!

So does that means [((2.5X).75 - X] = is generally the cost of running a shop?

I'm curious as to how much of a shop's capital budget goes to what (inventory, rent, wages, taxes...).

Pretty interesting how easy it is for prices to inflate from an increase in the base cost because of all the mark ups, a multiplier effect.

[crouka]

one of the reasons you could have bought cdiem, luc, etc at united arrows for the best prices in the world in those days was that they didn't stock those labels for making a profit from selling them, roughly speaking of course. but certainly it had not affected their management largely even if the labels would not have sold well. they had the system where they didn't have to depend on the profit they gain by selling the labels. but the labels had to be there for their selling some other stuff that were the breadwinners. and without the labels they could not have sold the other things that well.

[theetruscan]

That is absolutely correct. Most stores will be losing money on a garment if it has more than 25% discount, and that's the well run ones!

I don't follow.

Let's say some store gets 10 of a shirt. Are you saying that if they sell all 10 for 75% of their retail, they lose money, or are you saying that if even one is sold for 75% they lose money?

It would seem to me that a well-run store would fully expect some amount of their clothing to go to sale, and would have a profit margin that kept them profitable when selling a moderate amount of clothing at sale prices. I mean, I've never seen a clothing store not have sales, and if every clothing store was losing money, I'd imagine there wouldn't be so many.

[hobo]

Would you mind explaining why this is the case? Or is it essentially summarized in the past few pages?

I think that it is summarized in the last few pages, but basically there are a lot of expenses in running a retail outfit, be it in-store or online. Faust summed up the main ones but there are many others from water, light and heat, to shipping (we only charge a fraction of the actual cost, particularly on worldwide shipping). Other costs include Value Added Tax, import tax, of course the massive bills incurred in actually travelling around the world to find and order these goods, bank charges, marketing and PR, mortgages or rent, etc, etc ,etc...

yeah, but the prices keep effectively doubling every year. how much can the market take before only the blingiest of ballers are able to actually, yanno, buy anything? and i mean, sure we're able to.. but when is the last time you've bought something retail?

i'm good friends with many store owners and respect their establishments, and still i must confess that, retail-wise, i've been completely priced out of buying any damn thing i want. if i didn't have determination and, in some cases, just being able to buy something directly from a designer without mark-up, everything i like would be entirely off limits to me.

i don't imagine the situation changing in the near future, but how absurd are things going to get before they even out a little?

My friend, as far as I can see, prices do not double every year. I have been in fashion for a long time and notwithstanding the peaks and troughs of the general retail market, things are not really any different now to when I started.

I think that it is your taste that is maturing, not the market place. As your taste matures and you learn more about the subject that you are interested in your taste is refined. You therefore want ever more interesting and refined pieces. Which tend to get more expensive as you go!

I don't know, merz. It looks like there are enough wealthy buyers changing this finite amount of goods. I am in the same boat as you.

Don't be fooled mera. I've seen him at Tranoi, being given free sunglasses!

So does that means [((2.5X).75 - X] = is generally the cost of running a shop?

I'm curious as to how much of a shop's capital budget goes to what (inventory, rent, wages, taxes...).

Pretty interesting how easy it is for prices to inflate from an increase in the base cost because of all the mark ups, a multiplier effect.

It is a multiplyer effect, but everyone involved tends to operate on the minimum multiple inorder to stay competative. If we didn't, you can be sure as hell that someone would come along and undercut us. That's the free market!

Remember it's not just about the mark-up on each garment. It's also about how many you can sell. If you sell lots of something , like a department store, you can aford to make less profit per unit, but when you only sell a few, you have to maximise the profit per unit.

another curious thing i've observed: full retail price tends to vary from shop to shop - sometimes in the same city - by as much as 20-30% of the total cost.

this suggests that either the profit take is higher than first stated here, or that some establishments are running at a huge loss. i'd say that both are about as likely?

All that this suggests is that the exchange rate fluctuates. Not all stores take delivery at the same time and therefore the exchange rate can fluctuate causing discrepancies.

Some stores may decide to mark up higher on items that are rare or that they know will sell, but personally I would never do this. I think that it is short term thinking, as most customers who operate at this level are pretty savvy and know if they’ve been over charged. To be fare, I think that very few stores do this. If they do, they won't last!

I don't follow.

Let's say some store gets 10 of a shirt. Are you saying that if they sell all 10 for 75% of their retail, they lose money, or are you saying that if even one is sold for 75% they lose money?

It would seem to me that a well-run store would fully expect some amount of their clothing to go to sale, and would have a profit margin that kept them profitable when selling a moderate amount of clothing at sale prices. I mean, I've never seen a clothing store not have sales, and if every clothing store was losing money, I'd imagine there wouldn't be so many.

I'm talking about over all. A well run store may achieve a 25% net profit margin at the end of the season after everything is sold. Obviously, that includes some items that will inevitably be sold for more than 50% off. What I'm saying, is that every item that you sell for more than 25% off, subtracts from your net profit. There is therefore a finite number of items which you can sell for less than that before your business is not profitable.

[jcotteri]

Thankyou for a more substantial answer Hobo...

Can't wait to visit your store one day.

[zamb]

My friend, as far as I can see, prices do not double every year. I have been in fashion for a long time and notwithstanding the peaks and troughs of the general retail market, things are not really any different now to when I started.

I think that it is your taste that is maturing, not the market place. As your taste matures and you learn more about the subject that you are interested in your taste is refined. You therefore want ever more interesting and refined pieces. Which tend to get more expensive as you go!
.

well then, maybe we should limit the refinement of our taste to the slow growth of our wallets, as what do we do when our taste becomes too refined for our own pockets?

[Faust]

well then, maybe we should limit the refinement of our taste to the slow growth of our wallets, as what do we do when our taste becomes too refined for our own pockets?

that's when i start treating stores like art galleries.
by the way, hobo, never got those glasses. i am going to make them pay for it at pitti AND tranoi.

[hobo]

well then, maybe we should limit the refinement of our taste to the slow growth of our wallets, as what do we do when our taste becomes too refined for our own pockets?

that's when i start treating stores like art galleries.
by the way, hobo, never got those glasses. i am going to make them pay for it at pitti AND tranoi.

Hey guys, at Pollyanna, we welcome people who treat the store like a gallery. It's nice to meet people who share our enthusiasm, even if they can't afford to spend. Plus of course, today’s 'gallery viewers' are sometimes tomorrows 'key clients'. We like to think of ourselves as 'inclusive' as apposed to 'exclusive'.

Faust, give them some grief about the shades, man. Tell them Fred is so pissed off, he's cancelling our order!