In recent years, affordable luxury brands have caused quite a stir in the fashion industry. From a rough perspective, the main reason why these brands are popular is because of their price.
Compared with the prices of some luxury goods, the prices of affordable luxury brands are indeed quite “approachable”. Anyone familiar with the luxury goods industry knows that many affordable luxury brands originated from the United States and gradually became more popular. have become popular in China, but what many people may not know is that some American brands that are considered “fashionable” in China have been “abandoned” by the United States, and some of them have gone bankrupt.
So why are so many affordable luxury brands born in the United States?
First of all, it is because the United States has a huge local market. Take Tory Burch as an example, it was founded in 2004, 3 Annual sales exceed 100 million US dollars, exceeding US$1 billion in 2014. At this price point, only the market size of the United States can support such rapid growth.
Today, the editor will introduce to you three affordable luxury brands that are called “fashion” in China, but have long been “abandoned” in the United States.
American Apparel was founded in 1986 and is headquartered in Los Angeles. It mainly operates casual clothing series, T-shirts, underwear, accessories, and bags. American Apparel opens its first Chinese store in Sanlitun, Beijing. At that time, it had a huge impact on Chinese brands, and AA almost became the only trend among young people.
In 2016, Dov Charney, the founder and former CEO of AA, was fired due to a sex scandal. Subsequently, AA clothing’s insistence on sexy marketing was disgusted by consumers. However, AA abandons the sexy line and is obviously not a competitor to other clothing companies. As of December 2016, AA filed for bankruptcy protection for the second time. On December 12, AA published an open letter on its official Chinese website stating that it would withdraw from the Chinese market.
In 2018, AA quietly returned to the Chinese market and sold low-key on e-commerce platforms, but it had lost confidence in the brand.
Meadwell is famous for the design and production of jeans and leather bags. The style is simple, fashionable and novel, and is deeply loved by domestic consumers. Currently, it is still sold in China. The official website often offers discounts and promotions. But in the United States, it has lost support among local consumers due to outdated product designs. Even if Millard Drexle, the godfather of American retail industry, was hired as the company’s CEO, it could not enhance the vitality of the brand.
In the end, Millard Drexle chose to resign, and Madewell collapsed due to its inability to repay its debts. Although it still claims to be China’s “affordable luxury” brand, it is actually no different from China’s mid-range clothing.
Kate Spade specializes in handbags and shoes. After the first Kate Spade handbag series was launched in 1993, it quickly became popular all over the world. At the same time, Kate Spade has become the luxury brand with the largest price difference between China and the United States. In 2014, Kate Spade reached its peak, with the company’s stock price rising to more than $40 per share, but then profits began to shrink rapidly. In 2015, two of its menswear brands were shuttered. Brands that still appear to be profitable, such as Juicy Couture and Lucky Brands, have also been sold by the parent company.
In fact, the failure of these three luxury goods companies and the operating difficulties they face indicate that the retail industry has entered a sunset industry. According to official Swiss statistics, about 25% of U.S. stores will face operating difficulties by 2022. Fortune magazine predicts that 1,100 retail stores will close in the United States and at least 200 will close in the future. In China, the situation for physical luxury stores is also very difficult.
But the failure of American companies in the United States and their survival in China is entirely due to the power of China’s e-commerce platforms. However, if “international brands” without core design and brand promotion rest on their laurels on China’s e-commerce platforms, as time goes by, the “inside” of these brands will be seen through, and the results can be imagined. </p
