With the economy sinking, clothing is just one of the many luxuries Americans are cutting from their budgets. But one web biz is trying to keep luxury clothing affordable.
Founded in January, Regent’s Secret is based on a new e-commerce business model originating from France. The online outlet is invitation-only, and prices on high-end designers are between 50 to 70 percent off retail prices. How are the prices so low? Designer overstock is privately sold online via Regent’s Secret before being sent to outlets. CEO Rich Cusick argues that the recession doesn’t dampen people’s interest in buying high-end goods, but simply forces consumers to find better deals. “If you look at general retail, the low-price stores like Loehmann’s and TJ Maxx are doing really well,” he says, “People want luxury upscale brands but they don’t want to pay full price.”
Since January, Regent’s Secret’s membership has grown to 60,000 members and the Los Angeles-based site holds three sales per week. “I think this will be a huge trend …it fits with consumer appetites for luxury brands,” says Cusick. Keeping the business invite-only ensures the audience is fashion-forward. Members are allowed to invite friends to join, and as an incentive, for each referral, the member receives five percent of their friends’ purchases in cash back.
Featured designers have included Dolce & Gabbana and Roberto Cavalli. “The more exclusive the brand, the better it does,” Cusick says. As for products, denim and accessories have attracted the most interest, possibly reflecting what consumers are most comfortable purchasing online.
The company’s next steps include a website re-launch in November, with a lighter and more contemporary look. Developers also want to expand the viral nature of the site, including special rewards to frequent buyers, and creating consumer media, with features about what’s hot and what’s not.
Photo Courtesy: Regent’s Secret