Many luxury brands have recently slashed prices. “This is an unusual time. You have to be creative at this moment,”says Ralph Toledano, chief executive of Chloé. Although lowering prices can help business, some believe it can affect brand image.
“While $2,000 handbags and $700 stiletto heels are still expensive for most people, if prices drop precipitously, the perception of a label’s value may also drop,” explains Rachel Dodes and Christina Passariello in the Wall Street Journal article, In Rare Move, Luxury-Goods Makers Trim Their Prices in U.S.
Abercrombie & Fitch agrees with this concept of prices affecting brand identity. “Even though their sales for the third quarter decreased 46% (and even though holiday sales account for nearly half their total sales), Abercrombie says it won’t jump on the sales bandwagon,” writes Natalie Hormilla of Fashionista.
Abercrombie & Fitch should pay attention to those luxury brands slashing prices and follow suit. In a time of financial crisis, people expect brands to lower their prices. It is fundamentally understood that as sales decrease so do prices. Their brand image will not change if they lower prices like the rest of the market. Do you think high prices are crucial to Abercrombie & Fitch’s brand identity during a global financial crisis?
6 Comments
December 3, 2008 at 4:01 am
I think prices are crucial to ANY brand identity, regardless of whether or not we are in a financial crisis. The price tag plays a big role in brand identity whether we like to admit it or not. I find it hard to believe that luxury brands are slashing prices but if even Versace and Christian Louboutin are dropping they I have would have to agree … AnF better get on board!
December 22, 2008 at 11:48 pm
Oh A&F. I used to work at there…at that exact store in your picture! Mall of America represent
December 23, 2008 at 12:35 am
Thanks for your comments!
Taylorgraves,
We will watch and see…
Lindsay,
Mall of America must have been crazy! Hope you didn’t get married there too…haha.
Best,
Sarah
December 28, 2008 at 10:33 pm
wow, i didn’t know that the prices of luxury brands are going down.
the prices at A&F are actually INCREASING. in 2006 a full price A&F logo t-shirt cost between 20 to 30 dollars. it now costs 35 or 36 dollars for a plain logo t-shirt. the jeans cost $20 more than they used to in 2006! big difference. the sweatshirts cost $10 more. there was a basic zip-up sweater this season, not cashmere or anything, that cost a whopping $220. the prices are so much higher than they used to be…
December 29, 2008 at 4:18 pm
You’ll never catch me in a $220 sweater that isn’t cashmere! A&F is pretty nuts to be increasing prices at a time like this…
February 1, 2009 at 10:30 am
I think the US prices are within reach. You should see the A&F store in London…