The controversy over just what the U.S. Supreme Court's ruling on Leegin v. PSKS means is still fueling debate. Hedda Schupak, Editor-in-chief of Fine Jewelry publication JCKwrote in with her impression on just what the ruling will mean for high end retailers.
She seems to think that price-flooring has been going on for a long time and that the new ruling won't change those practices that drastically: "We hear that some designer jewelry companies and high-end watch companies do go out and inspect retailers' shops before agreeing to supply the line, and that they'll also send mystery shoppers out once the line is installed to see if it's being discounted. If either the store doesn't pass muster, or the jeweler is found to be discounting--whether blatantly or quietly--they risk losing the line."
Schupak responded to my questions about just how off-price discounters likeT.J. Maxx will be impacted since these companies may not be able to markdown the prices on goods that they are supplied by vendors: "Since I can't see a lot of manufacturers being willing to buy back scads of unsold goods--or retailers of a hard-to-get brand willing to admit they can't sell it--I suspect you'll continue to find a fair bit of it being offloaded at the end of each season, either to after market discounters (like TJX and the like) or sold on eBay . In the fine jewelry industry, we at least have the advantage of being able to melt down the metal and reset the stones, but most retail categories don't have that option, and the goods have to go somewhere."
Schupak is right to point out that the backlog of apparel inventory could become a problem. I would expect the market to find a way to manage inventory more efficiently so as to lessen the impact of that backlog of product. These days the game in retail is changing and managing inventory of orders and inventory of product in store is becoming the deciding point for just which retailers protect their margins the best.
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