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Why High End Brands Can鈥檛 Compete With Regular Brands Anymore

Why High End Brands Can’t Compete With Regular Brands Anymore

By Evelyn Rubenstein

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The fashion industry is ever booming, where each season brings about new trends and evolving style. It is difficult enough keeping up with the latest fashion trends, but what’s even more difficult is acquiring the look without breaking the bank.
 
Major luxurious brands feel the kick now more than even when affordability comes into the equation. Consumers are living more sparingly due to the uncertainty of global finances where markets are constantly unstable, making it more of a challenge for the public to splurge. That being said, high end brands are just not as profitable as they were a decade ago.
 
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It is safe to say that young shoppers prefer to have quantity of quality; for example an entry level Balmain jeans will cost you nothing under CNY 3000 while an entry level H&M jeans will cost you as little as CNY 120 and retain a very similar look. The drastic difference in price allows buyers more financial freedom to buy more for less. This is the number one reason high-end brands are feeling the pinch in their pockets, making it almost impossible to compete with regular brands.
 
A number of high end brands have closed stores worldwide due to being volatile in this market. Michael Kors is amongst these brands that are experiencing the kick; in a website post in May the company released their annual figures which have decreased in both profit and revenue. Revenue has stooped to $1.06 billion from $1.20 billion which is a decrease of 11.2%, while gross profit decreased by 11.1% as well. Bebe is yet another brand that has closed around 180 stores and True Religion Jeans has also closed 27 stores.
 
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Regular international brands like Zara, H&M and Forever 21 are reaping the benefits of sales because new stocks arrive almost weekly allowing consumers to be more flexible and efficient in obtaining the latest trends. This makes it strenuous for luxury brands to compete. 
 
Another major challenge high end brands face is replica items being sold across the globe. Many buyers have said that they would rather have a replica item that looks exactly the same to that of an expensive brand without having the hassle of paying exorbitant amounts. This is an issue all luxury brands like Louis Vuitton, Channel and Dior face. The unfortunate reality is that nothing can be done about these replica goods being sold because these brands wouldn’t know where to begin to stop their production. 
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With regards to marketing it should be noted that regular brands advertise a lot more, now that could be argumentative as high end brands don’t find the need to advertise or market their items. There are no flash sales or massive sales that are held very often and even when items of luxury brands do go on sale it is hardly a steal. They just can’t beat the deals that regular brands have to offer.
 
In the current fashion industry luxury brands need to realize that the progressive global changes are affecting the buyers more so than ever. New ideas and innovations need to be implemented as the market gets tighter with new competition being launched almost daily.
 
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