Double The Retail! – The Next Big Thing

Hermes: Marketing Genius or Mafia Boss?

While luxury giants like Louis Vuitton and Gucci are experiencing a “luxury lull,” with sales dropping 5% and 25%, respectively, Hermès is defying the trend. Their latest earnings report reveals a 14% increase in sales, with stock prices up 18% this year. In fact, Hermès is so hot right now that its most expensive product, the Birkin bag, accounts for 25% of its sales.

The Birkin bag, named after singer Jane Birkin, is the epitome of luxury and exclusivity. Each bag takes 20 hours to craft by a single artisan and is priced between $10,000 and $100,000. But there’s a catch: you can’t just walk into a store and buy one. The fashion house has a waitlist that can take years. It gets more intense- According to a recent lawsuit filed by three Americans, this list is allegedly rigged. The plaintiffs claim that to move up the waitlist, you have to purchase other Hermès products. For instance, a $1,000 scarf might nudge you up a few spots, and a $10,000 watch even more. They argue that this “tying” of purchases is an antitrust violation, essentially accusing Hermès of operating like a mob boss.

But the real question is, why is Hermès thriving while others are struggling? The key lies in its unwavering commitment to exclusivity and scarcity, a strategy that extends even to its store locations. Unlike competitors Gucci and Louis Vuitton, each having over 500 stores worldwide, Hermès operates just about 300 stores. Despite having fewer locations, Hermès is now valued at around $250 billion, making it the fifth most valuable retailer on Earth and boasting the highest valuation per store in the fashion industry. Wowza!

It appears that Hermès is getting attention by not seeking attention. While other luxury brands balance exclusivity with broader availability—often introducing lower-priced, entry-level products to boost sales—Hermès doubles down on scarcity. They don’t do collaborations like Louis Vuitton or flashy gimmicks like Gucci. Instead, they focus on waitlists, limited availability, and maintaining a sense of unattainable luxury. This strategy has made them stand out in a crowded market, proving that in the world of high fashion, less can indeed be more. Hermès is winning because it’s the only luxury brand absolutely committed to scarcity, creating a desire that keeps customers clamoring for more—even if they have to wait years to get it.

Uniqlo Is Taking Fast-Fashion Back To Basics

Although labeled as a fast-fashion brand, Uniqlo follows the “old-school” fashion calendar using seasonal drops. Unlike brands who churn out weekly trends, Uniqlo is not trying to sell you the next big thing; they choose to focus on the always big thing, and their brand has been better for it. With best-selling wardrobe staples like white tees and gray sweats, and collaborations with celebrity designers, they are not exactly playing in the minor leagues.

The brand offers 75% luxury quality at 50% of the price and has doubled sales this past summer—a wild feat for any clothing company in a saturated market. As a brand, Uniqlo isn’t aiming to be the fanciest or the cheapest; it aims to maintain a sweet spot between quality and affordability. This playbook has been used by other brands before, like Old Navy under Gap’s umbrella, and guess what? Old Navy now makes three times more revenue than Gap itself.

For Uniqlo, it’s not about being the best or the cheapest—it’s about being the best deal. And in a world where fashion trends come and go faster than you can say “pumpkin spice latte,” Uniqlo’s timeless basics and smart pricing are a slam dunk. Looks like sticking to the fundamentals isn’t just good advice for basketball—it’s a winning strategy in fashion too.

Ferrari’s Pricing Power

Did you know that Volkswagen manufactures more cars in a single day than Ferrari does in a year? Yep! While Volkswagen produces 9 million cars annually, Ferrari makes just 12,000. Yet, Ferrari’s stock is up 30% this year, valuing the company at $82 billion. Insane! In their latest earnings report, Ferrari announced $1.8 billion in revenue and $400 million in profits from selling just 3,000 cars in three months.

A deeper dive shows that a significant driver of this success is the customization options they offer. One-fifth of Ferrari’s revenue now comes from bespoke features that buyers add to their cars. From unique paint colors costing $15,000 extra to a panoramic roof for an additional $20,000, the options are as extensive as they are expensive. But the pièce de résistance? A six-inch yellow Ferrari racing shield painted on both doors—for a cool $13,000. Yes, that’s $13,000 for what is essentially a glorified sticker. But customers are willing to pay for these personalized touches, and it shows.

At the end of the day, pricing power is Ferrari’s superpower. In an industry where most companies can’t significantly raise prices without losing customers, Ferrari defies this norm. Their unique brand and wealthy customer base allow them to charge premium prices without denting demand. This exceptional pricing power translates into substantial profits, with Ferrari making about $108,000 in profit per car. It’s a rare feat, but Ferrari demonstrates how strong pricing power can drive extraordinary success.