Luxury Brands Finds Discounts Malls the Solution to Increase Sales Further
As the growth of sales for items such as fancy handbags to designer wear, luxury good makers are finding that importing their items to discount malls in other continents is a solution to increase sales. Discount malls are a familiar sight along U.S. highways and now in remote outskirts in European cities. These outlet malls are selling high end brands which are now popping up in China.
Shoppers can walk around a faux Italian village that is decorated with Roman architecture and fountains wherein a shopper can purchase a original Burberry coat for 9,000 yuan which is 40 percent of the original retail price in other stores in China. According to Value Retail PLC a London based developer and operator of luxury outlets in Europe that the company is planning to invest 450 million US dollars in constructing three new outlets in China in the span of five years.
Another London based firm TIIA Henderson real Estate is also expanding their existing outlet in the northern city of Tianjin and will open two more stores in Shanghai and another in the southern city of Foshan. The firm is also buying more sites in the central, north and western parts of China.
These companies are hoping to create a customer base that once equated luxury by paying top price are now looking for more deals. Chinese shoppers now have an awareness of brands and are looking to buy items with bigger discounts. While malls are looking for shoppers that may eschew store in China just to steer clear of high prices and taxes and instead go abroad to buy their designer shoes and bags.
Purchasing items in discount stores does not carry the risk of destroying the name of the luxury brand but it is a way for these brands to discount their items outside of their stores. These discounts malls can help clear inventory of luxury brands if the luxury business will be hit by an economic slowdown.