By Renata Geraldo
Oscar de la Renta took the plunge. The fashion house this fall
began selling a $2,000 black lace cocktail dress in an unlikely
place: Amazon.com Inc. Few others have followed.
Amazon is off to a slow start in its latest effort to woo luxury
goods onto its platform. Since creating a special section on its
mobile app to house high-end fashions in September, the e-commerce
giant has amassed just a handful of big brands.
It isn't the first time Amazon has tried to add designer wares
to its sprawling and fast-growing marketplace. Luxury brands such
as Louis Vuitton and Gucci have steered clear of Amazon in the past
for insufficiently policing unauthorized sellers and counterfeit
goods, or for not giving brands more control over what is sold and
at what price.
Amazon's newest offering, called Luxury Stores, addresses some
of those concerns. It is an invitation-only service for select
members of Amazon Prime, which has 150 million global subscribers.
The designers get to pick which products to sell and can control
the pricing. There are no product reviews or links to third-party
sellers. Items are displayed with 360-degree views and motion
Both customers and partners have responded positively to Luxury
Stores, an Amazon spokeswoman said, adding that brands have started
to replenish inventory and expand selection. Other fashion houses
have contacted the company to express interest since Luxury Stores
launched, she said, but declined to name them.
One fashion house still not satisfied was LVMH Moët Hennessy
Louis Vuitton SE, the French luxury conglomerate also behind Dior,
Bulgari and Givenchy. The company rejected Amazon's proposal to
join Luxury Stores, according to an LVMH executive, because it has
its own e-commerce operations and doesn't want its brands to be
associated with Amazon.
Big luxury brands are moving to take back control of their
e-commerce business, cutting back the inventory retailed by
third-party sellers such as Mr. Porter, Farfetch or
department-store websites rather than their own e-commerce
Oscar de la Renta sold fragrances on Amazon before Luxury Stores
launched. Online wholesale and direct-to-consumer sales account for
about 5% of the business, said Chief Executive Alex Bolen, making
it reliant on luxury department stores like Neiman Marcus and
boutiques that were temporarily closed by the coronavirus
Oscar de la Renta's sales fell 85% in the second quarter, Mr.
Bolen said. The family-owned company tapped the Paycheck Protection
Program, a federal rescue initiative designed to assist small
employers, in April for a loan worth $2 million to $5 million to
save 42 jobs, federal records show.
Opening up a shop on Luxury Stores is a way to increase digital
sales and introduce the brand to more customers, Mr. Bolen said.
"The ability to discover the Oscar de la Renta brand is one of the
most important things about our partnership with Amazon," he
Although it dominates the U.S. e-commerce market, Amazon has had
a mixed record with fashion and apparel brands. It sells Kate Spade
handbags and Levi's jeans, but a roughly two-year partnership with
Nike Inc. unraveled in late 2019. The sportswear maker was
disappointed Amazon didn't eliminate counterfeits and give the
brand more control over listings, The Wall Street Journal
Amazon says it cracks down on counterfeits, has used its
technology to block 2.5 million suspect accounts and has stopped
more than 6 billion suspected bad listings before they appeared on
The initial slate of brands in Luxury Stores is small and the
service can be accessed only through the main Amazon app, which is
a disadvantage, said KeyBanc Capital Markets analyst Ed Yruma. "You
don't want to be next to a bunch of brands that aren't relevant,"
Mr. Yruma said. "The point of luxury isn't to just drive maximum
traffic, it's how do you drive the best quality traffic."
In addition to Oscar de la Renta, the new Luxury Stores features
$1,500 handbags from Joseph Altuzarra, Roland Mouret ready-to-wear
dresses and La Perla lingerie. On Oct. 15, it added Clé de Peau
Beauté, a skin-care brand owned by Shiseido Co., followed by Prada
SpA's footwear brand Car Shoe on Oct. 22.
"The time is right" to join Luxury Stores as Amazon becomes "the
next frontier for the future of luxury fashion online," Roland
Mouret said in a statement. The British brand also said Luxury
Stores gives it an opportunity to reach new customers in the
Before the pandemic, the online luxury market was growing as
more people shifted their spending. And while many fashion houses
were slow to embrace e-commerce, they haven't ignored it.
Brands such as Prada and Gucci sell to online shoppers through
luxury marketplaces run by Farfetch Ltd. and Yoox Net-a-Porter SpA,
which collect commissions on transactions. Many designers are also
available on the Luxury Pavilion section of Chinese e-commerce
giant Alibaba Group Holding Ltd.'s Tmall website.
José Neves, CEO of Farfetch, says most fashion brands already
sell online through U.S. retailers such as Neiman Marcus and
Nordstrom. "They really don't need, and are actually trying to
avoid, extra exposure," he said.
The Amazon spokeswoman said Luxury Stores gives consumers more
choice and brands a new way to connect with them. "It's very much a
test-and-learn relationship with Amazon," said Mr. Bolen, the Oscar
de la Renta chief, noting that it has been available for just a
--Matthew Dalton contributed to this article.
(END) Dow Jones Newswires
October 31, 2020 05:44 ET (09:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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