Have high-end clothing stores turned into museums?

A recent NYT article compared luxury department stores right now to museums: the merchandise is on display, but people aren't touching anything.

I wanted to see if there was any truth to this, so I set out for Henri Bendel in New York. Now a trip to Bendels even before the recession is like a trip to the museum, anywhere from the gold leaf detailing on the powder room door to the rich marble elevators. I feel like I'm entering into another time period each time I walk through their heavy, ornate doors.

On one floor a room full of staggered mannequins wore Herve Leger dresses, not a real person in site. The dancing mannequins were displayed like a retrospective exhibit on the craft of the bondage dress, minus the multi-thousand dollar price tags. A corner on the ground floor sold Blair Waldorf headbands priced in the double and triple digits. The bright rainbow of bands were artistically displayed, appealing to the color we need in our recessionista lives. Meanwhile, the saleswoman was on the lookout for customers.
While the clothing sections were pretty cleared out, the makeup floor was as packed as Grand Central at rush hour. Blame the recession -- women are known to buy more lipstick in times when they need to boost their spirits. But this was also due in part to a special event, boasting the last personal appearance ever by the retiring makeup artist Laura Mercier. Her die-hard fans paid $100 for a personal Q&A with the French master, and a makeover where afterwards they could spend the $100 on products. One woman, a tried and true Upper East Sider, regarded herself in the mirror and proclaimed, " I'm going to buy every product they put on my face!" And the cashier rung her up for another $400.

I queried a friend who works at Bendels on the subject. Let's call her Joan. "It's not becoming a museum, I'll tell you that," she says. And while she says it has been dead for awhile, it has been picking up slack a bit lately. And part of the answer lies in promotions like the Laura Mercier event.

Joan didn't see the effect really, until around January at Bendels. For the first time ever, people were asking about prices. "Before those Upper East, Upper West Siders just kept trying card after card till they found one that worked and paid no mind," she says. People are finally batting an eye at a $300 pair of jeans. "We had a huge Adriano Goldschmied jean event last week, and people were flipping out about the prices."

And it's not just the department stores that are changing their strategies. Carrie Glenn Campbell, is owner and president of Asupremeagent, a marketing company that sells to outlets like Urban Outfitters, Madewell, and other luxury boutiques across the country. Like everyone else in the industry, Campbell is working harder and harder to win back consumer confidence. "We definitely saw a decrease in the risk factor. People are a lot less likely to buy into a product that they've never seen or heard of, which put my business in a tough position because we work with newish brands." One of Campbell's key brands, Bensimon, has been around for 30 years internationally, but in the U.S. is a relatively new brand.

"Two or three years ago, people could afford to try new things. But there's no way to talk a person into a product they don't feel comfortable buying," says Campbell. "Now stores are waiting for customers to start asking for things, which makes floors pretty boring." Indeed, Joan says that when it comes to the basics, shoppers are sticking to the brands they know, which at Bendels means J Brand jeans, Diane Von Furstenberg wrap dresses, and Splendid t-shirts. So the challenge becomes how to make Bensimon tennis shoes, for example, a wardrobe staple. Aside from building brand recognition, they might just have to wait till the storm blows over.

Campbell doesn't think normalcy will return until Fall of 2010. When it comes to retail, "It's 100% a buyer's market," she says. "They're making all of the rules. It's hard for a salesperson or a sales agency to have leverage." She sees a lot of the businesses she works with not placing orders, because they don't know where they're going to be in six months. "Every week while making sales calls," she says, "I find at least one store that is going out of business."

The Times piece said customers are holding onto their wallets, waiting for those clear out sales that dropped around Christmas. But the fact is, those sales never went away. "They turned into every type of sale you could think of, a weekend sale, a Monday sale, whatever excuse a retailer can have to put a sign on a window," says Campbell. "You can walk into any given store and find good products on sale.

Bendels, like Saks Fifth Avenue, Bloomingdales, Neiman Marcus, and the rest of them are having a few more promotions and sales than usual. "And when things are going on sale," says Joan, "people are more curious about how things are made and the quality. They're putting things on hold. It takes a bit of pushing, telling people, 'you'll get so much use out of it' or 'it will be a classic in your wardrobe.'" They keep customers interested by showing as many options as possible.

If shops are going to survive, "customers will need to be retrained into feeling comfortable paying for things again," says Campbell. "Last year everything was so watered down, customers expected to find everything on sale." The one positive coming out of all of this, she says, is that the quality brands with smart business practices, like Bensimon, are going to float to the top. When one item is trendy, 20 people can make the same thing and make it cheaper, which leads to over-saturation. "Right now it's survival of the fittest, and people will be limited to buying in select stores. But in a few years it'll be back to over-saturation."
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