Oscar de la Renta and retailers say Farfetch itself needs to help fight discounts
The head of Oscar de la Renta and several retailers have endorsed Farfetch boss Jose Neves’ call to stem the scourge of discounts online and offline but said Farfetch needed to make efforts since it also offers rebates to lure shoppers to its website.
Neves told FashionNetwork.com on the fringes of a luxury conference in Hong Kong last month that brands needed to take action to prevent “a race to the bottom” in terms of discounts as they threatened the very survival of the whole fashion retail eco-system.
Alexander Bolen, chief executive of American fashion brand Oscar de la Renta, together with independent retailers L’Exception in Paris and Aizel in Russia, said that while they backed his position, Farfetch needed to be more rigorous itself about holding back from discounts.
With the success of retail initiatives such as Black Friday last month, which sometimes start earlier than announced, the issue of discounts has become a major talking point for fashion and retail executives.
Heavy discounts started with the 2008-2009 financial crisis and never stopped since. Every year, discount periods start earlier, impacting consumer psychology and leading shoppers to refrain from buying anything unless it is on sale.
“I agree with what José Neves said and these are concerns of ours as well but Farfetch should apply the same discipline,” Bolen said. “We are very enthusiastic about Farfetch but I think there are better ways to build an audience than price promotion, such as exclusive product offers or invitations for VIP customers to exclusive fashion shows and launch events.” Bolen said Oscar de la Renta was very successful on Farfetch which he saw as a good tool to reach customers in new markets. However, he said the London-based marketplace would, sooner or later, have to choose between boutiques and brands as it puts them in direct competition in terms of price.
For his part, Neves regularly rejects the suggestion that boutiques should leave Farfetch since they are part of its identity and core to its “value-adding proposition.”
Several high-end brands such as Chanel are increasingly closing their wholesale accounts at department stores in major markets such as the United States to better control price and image.
Aizel, an independent retailer based in Moscow, said: “What Mr Neves said in Hong Kong to FashionNetwork.com is very surprising. In Russia, for instance during this black Friday 2018, Farfetch was the first to start promotions and discounts to their online clients. They were using their email marketing database for special promotions to push early sales within the same year. Sometimes, they are playing with prices and prices may even be lower than the prices recommended by the brands.” During the interview with FashionNetwork.com, Neves said Farfetch was not the first during the year to offer sales.
Parisian multi-brand store L’Exception, which launched its own ready-to-wear brand this week, and sells on Farfetch, said events such as Black Friday led shoppers to keep their purse string tight in anticipation, which impacted trade.
“We saw that with the Black Friday of this year, many customers waited for such discount days which meant that business during the month remained weak and such events impact the margins of distributors,” said Régis Pennel, founder and chief executive of l’Exception in Paris. “We cannot say that this is a good thing for the whole fashion eco-system. We need to enforce more control as sales and discounts are starting to take dangerous proportions for both brands and distributors.”
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