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Luxury Retailers Redefine Strategies as ‘Aspirational’ Buyers Tighten Purse Strings June 13, 2023 (0 comments)


New York, NY--A divergence in consumer spending patterns between affluent Americans and "aspirational" shoppers is prompting luxury retailers to seek new revenue sources and adapt their product strategies. 

[Image via Pexels Commons]

According to a Reuters report, Signet, the parent company of Kay, Jared, and Zales, recently connected dipping sales to these shoppers curbing their expenditure. Signet saw a downturn in fashion jewelry sales under $5,000 since April. 

However, as per the report, CFO Joan Hilson stated that items priced over $5,000 continue to sell well.

The report noted that to counter this, Signet is broadening its service offerings and banking on increasing sales of warranty and protection plans for its jewelry and watches. For instance, a protection plan for a $3,200 tennis bracelet from Kay costs an additional $315.

As per the report, Signet downgraded its annual revenue projection following this trend, flagging a deteriorating consumer environment. Retailers are feeling the squeeze to offset the dip in sales caused by falling demand from shoppers.

Luxury retailers Macy's; Ralph Lauren; and Capri, owners of Versace, Michael Kors and Jimmy Choo; are also readjusting their strategies. Macy's reported a significant sales drop in its namesake chain, where most customers earn less than $150,000 annually.

The report noted that Ralph Lauren is experiencing growth in full-priced stores as they focus more on their high-value customers. Capri is limiting inventory in department stores to sell at higher prices in their stores. Capri is also phasing out certain items as part of its “elevation strategy” to bolster luxury customer perception.

Learn more in the entire Reuters report.

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