09/17/2020

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Amazon Plans to Launch Luxury Brand Marketplace



Brands Will Have Control Over Many Decisions

Amazon (AMZN) is making plans to launch a luxury brand platform in September as fashion show season begins. The platform will showcase high-end brands from the US and Europe.

Each brand will operate its own part of the site in a model similar to fashion marketplace Farfetch. Brands will control how their online stores look and feel. They will also be in charge of how much they sell, and will make their own choices about pricing and markdowns.

Leveraging Amazon’s Networks

Luxury brands partnering with Amazon will be able to benefit from the company’s extensive warehouse and delivery network. Amazon began constructing a new warehouse in Arizona specifically for its new luxury brand operations, and is launching a $100 million marketing effort.

To begin, the service will only be available in the US. Amazon has worked to break into the European fashion industry and faced pushback—but if the service is successful in the US, it could act as a blueprint to expand internationally.

Amazon’s Fashion Strategies

Amazon has had its eye on the fashion industry for nearly a decade. It experimented with buying companies, creating brands, and other strategies. It recently launched the Common Threads/Amazon Fashion project as a way to help designers like Anna Sui, Thakoon, and Tabitha Simmons keep their sales up during the pandemic.

Amazon has high hopes for its newest foray into fashion. The luxury brand marketplace was originally supposed to be rolled out in the spring, but the launch was delayed until September because of the pandemic.

It is still a strange time for the fashion industry. Many shows are taking place virtually, plus consumers working from home are wearing more casual clothing. Amazon’s new platform is just days away from going live, and investors and designers will be eager to see how consumers respond to it.


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