Trunk shows: Privates sales websites are all the rage in France; soon elsewhere? (Fashion marketing)

Fashion marketing news: Since 2005, the craze for fashion trunk show webistes has taken over France. Sites such as vente-privee.com, espacemax.com, and achatvip.com are leading the way. As these companies are expanding throughout Europe, here are a few thoughts about the phenomenon.

A memorable day during the French Revolution was on August 4, 1789, when French aristocrats surrendered their special privileges by decree. These privileges were the remainants of feudal society. French citizens hated these privileges, but ever since that date, they have been fighting very hard to acquire new privileges of their own. Like being invited to couture private sales while your friends have to wait for the official sales season to get discounts.

The success of "ventes privées" (litterally "private sales") websites in France has been astounding. You will find there all the major fashion brands, discounted on slick websites.

Think Overstock.com, with glamour, and a well-created sense of urgency that get Frenchwomen to get up at 6am to be the first to snatch the products online.

You have to get "invited", "recommended", or "white-listed" to be able to register. This staged word-of-mouth has created a buzz and preserved for a time the private aspect of private sales.  This is also a great list building trick: current users give the e-mail addresses of their friends, in order to share with their dear ones the "privilege" to buy the goods on sales.

These private sales websites are now numerous on the market. Sales are still increasing fast and they have expanded from fashion to homeware, travel, and cars (yes, even carmaker Peugeot did it). But the growth is now outside of France. UK is the first target and several French sites have opened a British subsidiaries, such as BrandAlley UK. (Article continues after the image).

TV report gives idea of price negotiations

Last night, French TV channel M6 broadcasted a very interesting report on the way private sales sites get their hands on high end fashion products at extremely low cost.
I have not yet found the video of the report online, but here are a few snippets I wrote down:

- The report first focused on BrandAlley CEO Sven Lunch negotiating prices with the owners of Alain Figaret, a high end shirtmaker.

- The Figaret owners said that 2.5% of their inventory was unsold. They liked the idea of private sales on the internet, as in 48 hours, the site can get 1.5 million people to view and potentially buy the goods.

- Mark-off: Sven Lung went to the Figaret warehouse to see the inventory. He said that a shirt selling at a retail price of  €79 in stores should be priced at €39 on his site. This meant that he was willing to buy the shirt at €20 from the Figarets. They replied that their manufacturing cost was €24, but apparently accepted the deal

-The whole thing was donce in front of a camera and this was negotiation – let’s not be naive. But my insider information confirms that on average, privates sales websites want to be 70% cheaper that retail stores.

- The report then moved on to Tuscany. The BrandAlley people were there to meet with a company that handles unsold inventories from major fashion brands. By contract, the brands usually demand that the heavily discounted goods be sold in South America and Asia, but certainly not in Europe.

- Here, we see Sven Lung getting Valentino shirts at €25 apiece, Guess apparel at €14 apiece and Calvin Klein suits at €170 (retail price is €700).

- According to the report, there is risk involved in this type of transaction: officially, brands give an exclusive mandate to the Italian company to sell the goods overseas. There is no official commercial relationship between the brands and the website. So, anything can happen, from the goods not being delivered to the fashion brand lawyers calling the website to stop the sales.

- Once again, I take all this information with a grain of salt, but it is quite interesting, isn’t it?

Interview of BrandAlley CEO

I have managed to find an online video of an interview of BrandAlley CEO Sven Lung. It is in French, but I have written down a few snippets (read them under the video).

 Video: Sven Lung from BrandAlley