EUROPEAN ONLINE STORES LAUNCH EARLY SPRING SALES – WWD

The measure might generate a price war and negatively impact the already suffering brick-and-mortar business.

In this period, retailers aligned offering reductions to support the business. “For sure, this will boost competition,” said Aldo Carpinteri, Founder & CEO of Modes, which in 2019 registered sales of more than 100 million euros and is now offering a 20 percent discount on spring collection. “I don’t think this strategy will have a negative impact, we are all just offering customers opportunities in such a critical moment. The market is driven by the law of supply and demand. We are constantly monitoring the market moves and we try to catch all the opportunities.”
While 70 percent of the company’s sales are online, Modes also runs a significant brick-and-mortar business, including two new stores in Milan and St. Moritz, along with the storied boutique in Trapani, as well as summer seasonal units in Portofino and Favignana, a tiny island off the northwest coast of Sicily. In addition, Modes operates through a concession agreement three Balenciaga flagships, located in the Italian high-end seaside resorts Porto Cervo, Portofino and Forte dei Marmi.

Francesco Tombolini, President of Camera Buyer, the association representing over 100 Italian luxury retailers, cited Roman emperor Marco Aurelio to review the current situation. “What is good for the beehive cannot be good for the bees,” he said, referring to the fact that these measures cannot be considered a cure to face the moment. “However, if from an ethical and business point of view, the decision to start reductions on spring collections so early is wrong and unfair for brick-and-mortar retailers, at the same time the online business is the last bastion for the retail industry.
Describing early reductions “as a toxic medicine, but one which enables us to stay alive,” Tombolini predicted the impact of the coronavirus outbreak across the whole world will be “100 times stronger then that of 9/11,” and that “we are currently bringing old solutions to solve new problems.” Tombolini added that the industry needs a sort of Yalta conference, where “brands, retailers and makers write a new protocol for a new consumer. We all have to understand that the effect of this situation will be viral and will force the industry to reconsider marketing budgets, mark-ups and wholesale strategies.

With six stores in Italian luxury sky resorts Cortina D’Ampezzo and another flagship in Dobbiaco, a town located by the the Italian-Austrian border, Franz Kraler is one of the many powerful Italian retailers not operating an online store. “We have always focused on the significant physical presence in the tourist areas we are based,” said Kraler Owner Daniela Kraler. “All the luxury brands we work with are being extremely collaborative and they are offering us the possibility to defer payments and postpone summer products’ deliveries. I honestly think that this early reductions online will create a sort of price war, which will force us, when we can finally reopen, to ask brands to kick off the sale season much earlier than July.