Harvey Nichols, the luxury department store chain has a tough year ahead. The growth has been slowing down rather fast and they are planning several measures to revive the growth momentum. One major initiative is the creation of a private label collection of women’s items. Another area of focus is going to be the online sales and they would like to expand it to make up the slowdown in the store sales.
Harvey Nichols had changed hands in 2003 and was taken over by the Hong Kong businessman Dickson Poon. He is betting big on the store’s own label range including women’s shoes and leather goods. The strategy is to create a collection that compares well with the top luxury brands in terms of quality but price it at least 15% lower. Harrod’s has done it successfully and is perhaps the inspiration behind the move.
The UK consumer confidence is low. The general outlook is pessimistic about the economic recovery. The big ticket spending has gone down. Joseph Wan, the CEO gives the example of fine wine bottles costing 2000 pounds or more. Their Oxo Tower restaurant could hardly sell ten bottles in the entire year. That would be a normal monthly sale prior to the economic downturn. The luxury brands are also developing cheaper diffusion lines and the store plans to stock more of those to attract a new customer base that can drive volumes.
Via: bloomberg
