Many companies today are lowering prices and offering sales in order to keep customers shopping in their stores. During the holiday 2008 season, the company stated that by cutting prices on their merchandise, they endangered the company image. Saks is known for selling high-priced, luxury items from designers such as Christian Dior, Prada, Louis Vuitton, and many more. The company believes that their image should not be tainted by the idea of slashing prices for the sake of business. On the other hand, there has been a trend of designers widening their price range and lowering the prices of some products. Christian Dior, whose handbag entry-level prices are usually around $1,500, will be selling handbags at an entry-level price of $950. In all, Sack Inc is hoping that by designers offering these cheaper prices, they will not have to resort to cutting their own.I believe that by Saks not lowing prices, they are in fact accepting that they are loosing their consumers. Many companies have had to make choices. They feel as if they are selling out, but the company lost $98.8 million last fiscal year because prices were too high. I believe that this choice was a way of salvaging the ego of company leaders. I do not know of anyone who can afford to spend $950 on anything, especially not on a purse. The economy may be on the rebound, but it will take a long time to get the economy back where it was before.
Article from: (http://www.reuters.com/article/newsOne/idUSTRE5326K020090403)
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