World Retail Congress: Saks Global/Authentic Say JV means that “Luxury on Amazon” will become very natural

The Saks Global and Authentic Brands Group association has been a great topic of conversation in recent times, so it was a good time that the Authentic CEO, Jamie Salter, and Saks executive president Richard Baker, were on stage together on the second day of the Morlete Congress of London this week.

They said that they believe that the authentic JV luxury group could increase the margins, remove control of luxury away from suppliers and to retail trade and make the most of the strength of the Saks brand to boost global associations.

Authentic is well known as the purchasing buyer of brands such as Nautica, Volcom, Aéropostale, Lucky Brand, Nine West, Ted Baker, Juicy Couture and many more. But while he had a presence at the upper end, his 50/50 joint business link with Global Saks The past fall was key.

“We wanted to enter the luxury space, but it's about distribution,” said Salter. “When we look at the brands, what is really important with us is that they can make the right margin. If you observe the business model today, the margin is everything. Meeting with Saks was fundamental for us. If you are not dropping at 60 years on the margin maintained, it is very difficult.”

Baker also commented on the justification of the association, saying that in premium and luxury, there were too many suppliers, too much discount and not enough margin. “We had to do it, or there would be no industry in the United States.” With more than $ 9 billion in GMV, the control of more than 60% of the luxury market of the United States, and the support of Amazon, Salter and Baker believe that they are creating a next generation model where retail, data, licenses and media converge.

The JV has bold ambitions and Salter said: “The model really works. But we are not only in retail, we are also in the hospitality business, we will see that the residences of the SAKS brand, which also means that people will buy home products for those.

For now, a key part of the agreement is the recently launched Saks store inside Amazon, a digital “garden” that preserves the integrity of the brand while giving access to the global audience of the size of Amazon. Salter said that with Amazon building similar luxury platforms in the United Kingdom, Japan, India and the Middle East, in five years “the luxury on Amazon will be the most natural one that you have ever imagined because they have the most elegant execution and the greatest reach of any person in the world online.”

The link between the two also sees them by reviewing the Saks business, reducing low performance brands and prioritizing premium associations.

And customer data helps them in this process, since they share more than 250 million customer profiles in their businesses, offering them an updated vision of who is buying what, where and why.

With that weapon to exercise, Saks is likely to edit the 500-600 brands and change to “controlled brands”, with a major margin, with the aim of about 20% of the sales of these products of products.