High-end brands at warehouse stores?

April 28, 2010 4:11:43 PM PDT
Valentino, Armani, and Prada - these are some of the most expensive designer labels normally sold at high end department stores and boutiques. But we found them at warehouse stores. So why are these retailers now carrying high end? It all has to do with the economy and the way consumers are changing the way they shop.

Paper towels, toilet paper, diapers and wipes are the sort of things you'll find shoppers buying at warehouse clubs.

"When you think of Sam's Club, you are thinking of buying in bulk," said Mark Milton with Sam's Club.

But among all the bulk items are designer labels like Gucci, Armani, Rock & Republic and Burberry.

"We are here to cater to everybody," said Bruce Marteney with Costco.

Marteney says his store, which is located near Greenway Plaza, gets designer merchandise in every week. Take, for example, a new load of designer sunglasses. You can choose from names like Fendi and Jimmy Choo. In the jewelry section, the store from time to time will carry Rolex watches, along with other labels like Cartier and Michelle.

"I come all the way from Pasadena to shop here and we come every week," said one shopper with whom we spoke.

Over at Sam's Club, the wholesaler caries designer jewelry by Judtih Ripka. Neiman Marcus also carries the same designer's line.

You can also find jeans with designer labels from Seven and Rock & Republic. At K&G Fashion, the store is known for carrying department store labels, like Nine West and Ralph Lauren, but now they have a red carpet.

"This is really high fashion at a really good price," said James Brown with K&G Fashion.

You'll find designer shoes from Prada, dresses by Dolce and Gabbana and Missoni and men's suits by Armani. So why are stores that normally cater to middle class crowds going ultra high end?

"It adds a certain sheen to the retailer," said University of Houston Associate Professor Partha Krishnamurthy.

Krishnamurthy is a consumer behavior expert. He says there are several reasons why retailers are bringing in high-end merchandise. First of all, it's a great marketing tactic for the retailer.

"So by offering that, you cater to another segment," he said.

Another reason, Professor Krishnamurthy says, is since people are tightening their belts in this economy, retailers are giving them an option to upgrade their products without paying full price.

Once the economy bounces back, the professor says he can't predict if more affluent shoppers will go back to exclusively shopping at the pricy boutiques. That's why retailers like Sam's Club hope to change their shopping habits permanently.


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