The traditional wholesale model has fallen out of fashion and no longer suits the industry it served for so long.
Like the rotary phone or the cassette tape, the traditional wholesale model has fallen out of fashion and, in many ways, no longer suits the industry it served for so long.
Stores have also been their own worst enemies, demanding more frequent collections and exclusive capsules from brands and designers, asking them to make more and more stuff, so they can upsell the customer.
The trend was echoed across the world between 2011 and 2015, according to that report, with the wholesale share of women’s ready-to-wear shrinking from 42 to 30 percent in Italy, from 60 to 45 percent in China, and from 34 to 27 percent in Japan. The wholesale share of market remained stable at about 42 percent in the U.S., with specialty chains losing share and online pure-players gaining.
Buying closer to the season would not only satisfy the customer — who could buy his or her coat in the fall, and bathing suit in the summer — but it would also make for less waste, and longer full-price sales periods. David Dubois, an associate professor of marketing at French business school INSEAD, echoed those thoughts and argued that stores need to prioritize sustainability, and become less cyclical and more transparent.
Indeed, some believe that data has an enormous role to play and should be trusted, and treated almost like a divining rod when it comes to wholesale purchasing. The large luxury brands — such as Chanel, Dior, Gucci and Saint Laurent — know exactly how to limit the risk of what they buy for their own retail networks.
Suarez, who cofounded Nicholas Kirkwood and served as its chief executive officer, eventually selling it to LVMH Moët Hennessy Louis Vuitton in 2013, said there needs to be “a true collaboration, and partnership” between the stores and the smaller brands and they need to share the risk of selling season after season.
He argued that, unlike marquee brands that have solid investment and retail networks, small labels or start-ups without cash behind them can be vulnerable when it comes to finding a sustainable sales model. “If these brands didn’t have the deposits, they could not afford to make the collections,” Alger said.
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