What Happened: Victoria Beckham is now banking on a pricing restructure and consolidation to attract new consumers. The brand told BoF it plans to lower average prices by 40 percent on dresses and merge its main collection with its diffusion line. This new accessible direction will launch in November with a Pre-Spring 2022 collection. According to the accomplished celebrity turned designer, the new direction is a “rebirth” while stating that the new collection will maintain the same high-quality her namesake brand is known for.
The Jing Take: The COVID-19 pandemic has caused an upending of the traditional fashion system, forcing brands and fashion platforms alike to rethink their business models. Scaling back or consolidating lines is one way; price increases are another. Recently, the Italian house Valentino also announced it will phase out its more-affordable “RedValentino” sub-brand, while Chanel, Hermès, Bottega Veneta and Louis Vuitton have all applied successful markups. Indeed, price increases have proven to be a good way to maintain brand equity, especially in China’s vast luxury market.
Perhaps the real issue for Victoria Beckham’s label is an overall failure to leverage Chinese social media and KOLs effectively on the mainland; instead, it’s relied on the namesake founder’s one million Weibo fans for amplification. Clearly, this is not enough. For example, on Little Red Book, it has only 2,800 UGC mentions. Combine this with an understated, logo-less design ethos makes for a hard sell on the mainland. The transition to affordable luxury, however, could well entice China’s price-savvy shoppers, but it also places the brand in a deeply competitive market. Without a proper China strategy that complements rather than relies on Victoria’s status, it’s not hard to imagine that the brand will continue to miss out on profits — regardless of the price.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.