1. Welcome to VegasMessageBoard
    It appears you are visiting our community as a guest.
    In order to view full-size images, participate in discussions, vote in polls, etc, you will need to Log in or Register.

How do those designer stores stay open?

Discussion in 'Misc. Vegas Chat' started by Mr_Vegas, Oct 22, 2014.

Thread Status:
Not open for further replies.
  1. Mr_Vegas

    Mr_Vegas Newbie

    Joined:
    Jul 12, 2012
    Messages:
    6
    Trips to Las Vegas:
    15
    i'm always wondering how do those high end designer stores stay open? The rent must be outrageous in places like Crystals, the forum shops, etc. I own a small store in the Chicago suburbs and my rent is $1300 for a 500 sq ft retail space. I'm guessing a vegas store must be ten times that much. It never looks like there is any customers in the stores when I walk by or if there are customers they never seem to be buying anything.
     
  2. wishman35

    wishman35 VIP Whale

    Joined:
    Mar 24, 2010
    Messages:
    1,024
    Location:
    Chitown
    Trips to Las Vegas:
    15
    A question many of us Vegas regulars also wonder...
     
  3. DMSCR

    DMSCR High-Roller

    Joined:
    Oct 31, 2011
    Messages:
    551
    Trips to Las Vegas:
    22
    The Vertu store at the Wynn. Or any Vertu store for that matter in particular. I can understand a luxury watch store like Rolex and Omega. I think Pareto's Law come into play when thinking about how these real high end shops can stay open. Don't think they need the high traffic of consumers coming into their stores. Maybe two or three sales a day will suffice. Also with those real extreme high rollers and the money they throw down I am sure the casino can comp say a Rolex as a gift for them visiting. Especially at the City Center in all the times I pass by I have never seen even one shopper stepping inside that watch store.
     
  4. bjpcyclone

    bjpcyclone High-Roller

    Joined:
    Apr 20, 2013
    Messages:
    871
    Location:
    NE Oklahoma
    Trips to Las Vegas:
    15
    Yep, that's all you need to know about the profit margins on luxury items.
     
  5. lotso-bear

    lotso-bear VIP Whale

    Joined:
    Jan 21, 2013
    Messages:
    1,215
    Trips to Las Vegas:
    111
    I have a feeling they have an agreement with the rent if a guaranteed foot traffic # isn't met each month..
     
  6. Turtleman

    Turtleman VIP Whale

    Joined:
    Apr 8, 2005
    Messages:
    3,257
    Location:
    Atlanta, GA
    Trips to Las Vegas:
    101
    I'm glad to see I'm not the only one who wonders how these high-end stores survive, as I hardly ever see anyone in them whenever I walk by. (I sure don't go inside!)

    Gee, I wonder if Romney heard of Pareto (regarding his 47% comment). (Just kidding – I'm not trying to get political!)
     
  7. jimboguy

    jimboguy Blubbery Whale

    Joined:
    Nov 15, 2010
    Messages:
    1,338
    Location:
    Salt Lake City, UT
    Trips to Las Vegas:
    20
    One of these usually does the trick...:evillaugh
    doorstop1.jpg

    Of course a high-end, designer store may use something more akin to this:
    gold-door-stop.jpg

    Yes, I regret my sense of humor too. :wave:
     
  8. schmalen1

    schmalen1 Low-Roller

    Joined:
    Feb 25, 2013
    Messages:
    136
    Trips to Las Vegas:
    6
    Last year I've seen 3-4 chinese ladies set step into Chanel at Wynn... they closed the doors behind them for let them shop alone... rent paid for the next months i guess! :whistle:
     
  9. leo21

    leo21 VIP Whale

    Joined:
    Jan 9, 2010
    Messages:
    4,712
    Location:
    Chicago South Suburbs
    Trips to Las Vegas:
    14
    When people started questioning if Crystals was successful considering the light traffic, the response was that many of the stores have high end VIP customers who shop in private and after hours. I can see that working for some of the smaller boutique shops but for some of the larger storefronts, I wonder if that is even enough. It wasn't enough to impress anyone into buying that mall.

    Personally, when I have a nice run and I want to top it off with some retail therapy, something about those stores turns that mood around quick. Even if I had the stash, I don't want to spend it in a pace like Crystals or to a lesser extent the Forum Shops.
     
  10. bswim

    bswim High-Roller

    Joined:
    Jan 22, 2013
    Messages:
    898
    Location:
    Western WA
    Trips to Las Vegas:
    7
    It's probably a combination of insane markups and I would imagine a large portion of their business is probably comps for the high rollers staying at MGM properties. Their wives have expensive taste and without those shopping options they'd be taking their bankrolls down the street.
     
  11. smartone

    smartone VIP Whale

    Joined:
    Jul 17, 2011
    Messages:
    5,264
    Location:
    Northern Nevada
    Trips to Las Vegas:
    204
    In many ways for many people Las Vegas is about doing things you wouldn't do at home... gambling, drinking to excess, eating fine meals and splurging. I know it comes as a shock to most here on the board that consider it a sin to eat the $12 peanuts in the mini-bar or would rather die of thirst before cracking open the $8 bottled-water, but an awful lot of folks want to come home with something special from their trip. For many, it's a $1,000 handbag or $500 sunglasses. I find it somewhat humorous that some of those who find it so easy to shove $1,000 into a slot machine and go home with really nothing to show for it but an empty wallet and a hangover have such a tough time "getting" people who buy $1,200 shoes or yet... dare I say it? The evil "bottle service"!

    Plus... there are those who have money most of us can only dream about who shop these stores like we shop Famous Footwear.
     
  12. Joe Strummer

    Joe Strummer VIP Whale

    Joined:
    Apr 4, 2006
    Messages:
    3,148
    My wife + I were staying at Red Rock -
    every time we went to the casino we would pass
    one of these luxury boutique stores - with no one in it.
    However, my wife would ALWAYS comment on this flashy,cheaply made
    women's belt in the window - priced at $200.
    "Who would buy such a cheaply made thing ?"
    So, I would get her going about it the rest of the day !!!
    "I can't believe that belt !" I say, in the casino....or at lunch....or at dinner.....etc.
     
  13. Snidely

    Snidely VIP Whale

    Joined:
    Nov 2, 2012
    Messages:
    1,967
    Trips to Las Vegas:
    20
    Those high end retailers cater to a very fickle clientele. Right now, Louie Vuitton is very popular;those stores do quite well. I don't think Fendi or Chanel are nearly as popular as they once were. They might be hurting. A lot of people expect to lose a lot of money in Vegas and if they win, they consider it found money so they spend it on high end items. Other people just don't have these types of stores where they live so they plan some high-end shopping into their Vegas vacation.
     
  14. Snidely

    Snidely VIP Whale

    Joined:
    Nov 2, 2012
    Messages:
    1,967
    Trips to Las Vegas:
    20

    We share the same sense of humor.
     
  15. dutchvelvet

    dutchvelvet VIP Whale

    Joined:
    Mar 5, 2014
    Messages:
    1,123
    Location:
    Wisconsin
    Trips to Las Vegas:
    4
    The margin of a luxury retailer is going to be 50-80%. For example, I just looked up Tiffany, a publicly traded luxury retail, and they showed gross margin for the quarter I looked at as 58.2%. Gross margin for Coach hovers at 70% or so. The holding company for Louis Vuitton, which owns several luxury brands, shows a gross margin of 65%, and it would not surprise me if the margin for the Louis Vuitton retail unit is 10 points higher than that.

    So compare that with a Wal-mart that has a gross margin right around 24%. To make $2,000 on selling purses, Walmart needs to sell 333 purses at $25 bucks a pop. Coach needs to sell 4 bags at $700 each. Coach maintains a net profit margin of about 20%. So, presuming they average only those four bags a day for a month their gross profit is $60,000. They want to net out $16.9K or so to maintain their historic 20% net profit margin, so they have $43,200 to pay operating costs, including staff costs and rent. Assume each full time employee there will cost you about 3K a month, and the store manager 6K. Even if other costs eat into your operating budget, you still have quite a bit of money left to pay monthly rent.

    TL: DR Luxury Retailers can survive on high margins. They usually don't emphasize volume.
     
  16. smartone

    smartone VIP Whale

    Joined:
    Jul 17, 2011
    Messages:
    5,264
    Location:
    Northern Nevada
    Trips to Las Vegas:
    204
    Well Done!!! :nworthy:
     
  17. Hobofrank

    Hobofrank Prime Minister of Idiocracy

    Joined:
    Jul 29, 2014
    Messages:
    3,234
    Location:
    Porter Ranch,CA
    Trips to Las Vegas:
    100
    look at the big brain on DV! :haha::haha: j/k

    a friend works at a dealership that sells Bentley and Porsche, if he moves 5 cars/month...he's killing it
     
  18. leo21

    leo21 VIP Whale

    Joined:
    Jan 9, 2010
    Messages:
    4,712
    Location:
    Chicago South Suburbs
    Trips to Las Vegas:
    14
    Sometimes the problem is those of us who gamble and are open to luxury goods don't see the point of doing the latter in Vegas. In this age of airline hassles, I can't be bothered to arrange my luggage to bring more stuff home.
     
  19. dankyone

    dankyone VIP Whale

    Joined:
    Oct 15, 2011
    Messages:
    1,449
    Location:
    Los Angeles
    Trips to Las Vegas:
    105
    Great analysis. The short answer is--the stores stay open because people do buy things and they do make money.

    My guess is that margins at Chanel and Hermes are even higher than at LV and Coach. They don't need to sell many items.

    - - - Updated - - -

    Great analysis. The short answer is--the stores stay open because people do buy things and they do make money.

    My guess is that margins at Chanel and Hermes are even higher than at LV and Coach. They don't need to sell many items.
     
  20. 1LuckyMomma

    1LuckyMomma Low-Roller

    Joined:
    Dec 28, 2012
    Messages:
    461
    Trips to Las Vegas:
    17
    I've seen the doors unlocked for private shoppers as well. The stores are there for a reason. As much as I love to drool over Coach purses, I don't have one, nor will I buy a fake one.
     
Thread Status:
Not open for further replies.