Reviving a Luxury Brand After the Recession and Deep Discounting

It is no secret that after the 2008 economic collapse luxury brands took an incredible hit in the marketplace. As the consumers literally vanished overnight, the luxury brands could not hold their price and their wealthy and loyal clientele stopped buying. They immediately went into crisis mode, offering discounts to lure back some of their wealthy clientele, and a hold onto their middle class clientele. For some it worked, but not all luxury brands made it through the economic crisis. There were several mergers, and many high-profile bankruptcies.

Okay so, this is no surprise, and it’s old news. But now that the consumer is spending again, and using their plastic credit cards, although not as heavily as before, how can a once high-end brand that has been giving steep discounts raise its prices back to their former highs? Easier said than done, and many of the luxury brands lost their luster when they went into heavy discounting, because they were no longer for the elite, as anyone could afford them. In fact some of the luxury brands were selling their products at prices so low that many of the buyers assumed they were fakes, and counterfeit knockoffs.

This especially took its toll on those high-end retailers which carry the luxury brands, as they were also forced to make discounts. Yes, they were able to sell the items, but their profit margins were not as high, therefore there same store sales even if they didn’t take too much of a hit in overall revenue generated it didn’t result in the operating profit needed to continue. Remember high-end brands are much about marketing and branding, and people are willing to pay a premium for them. This is because individual customers identify with the brand name and boldly display it to show that they have arrived, and they only by quality merchandise.

However, when average citizens are sporting the brand name all over the place, it is no longer a luxury brand, it’s a common brand for the people. Those without wealth are happy to have these products because previously they could not afford them, but as they wear the clothing, tote around the purses, and display the jewelry it drags down the brand name to a point at which the most affluent are no longer interested in it.

When reviving a brand name of this type, and setting it up so it can maintain a higher price point off into the future, one of the best things to do is to co-brand with other top brands which may not have been hit so hard. For instance, a clothing line, golf clubs, or perfume company might align themselves with a fractional jet company, a high-end car company, or a luxury yacht manufacturer. In this case both luxury brands can ride back to the top simultaneously, as consumers forget that not long ago they were on the discount shelf. Indeed I hope you will please consider all this and think on it. bombardier for sale

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