Luxury Brand Burn Factor

The fact that you soon may no longer be able to coast out of Costco with 24 rolls of paper towels PLUS a Louis Vuitton bag swinging from your sales-savvy wrist isn’t what’s got my panties in a wad today.

It’s  the part of Fashionista’s post by Lauren Sherman highlighted in orange, below, that makes me go “HUH?” I mean, really? Luxury brands sometimes “burn or melt” extra stock?

Don’t get me wrong, but can’t they just re-purpose the pieces if the bag is imperfect? And if it’s overstock, good heavens, why wouldn’t you sell it? How else do brands achieve world domination? And how ever will people like me be able to afford luxury items, if not at Costco?! It’s way better than the streets of Chinatown these days….

Per Lauren @ fashionista.com :

Costco Might Not Be Selling Chanels for Much Longer

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 By Lauren Sherman

You know how Costco occasionally sells Chanel and Louis Vuitton bags? Well, they might have to stop, if luxury brands like Omega have anything do with it.
The warehouse club is taking the Swiss watchmaker to the Supreme Court, appealing a lower court ruling that said Omega had the right to control who bought its products in the grey–or secondary–market.
The grey market, which is something luxury brands don’t like to talk about, is where lots of leftover product goes. There’s a secondary seller who buys it from the luxury brands at a major discount–that seller then passes it offer to discount retailers. It doesn’t happen often, because luxury brands tend to burn or melt their extra/imperfect stock, but it does happen.

In related news, the European Commission has released a set of rules that say luxury goods makers can block Internet-only retailers from shilling their goods. eBay, which boasts the biggest second-hand luxury market in the world, could be severely affected by this.
Luxury goods makers might think they’ll benefit from tighter control, but will they? Do discount retailers really tarnish a brand?

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