Welcome to News Bites, BoF's regular feature of the stories that get the industry talking.
Amazon takes on Stitch Fix with Prime Wardrobe service.
Members of Amazon Prime already get benefits like free two-day or same-day shipping and unlimited access to Amazon’s on-demand movies and TV shows. Now the e-commerce and cloud computing giant, fresh off a bid to acquire organic grocery chain Whole Foods for $13.7 billion, is adding a new fashion-related feature to the programme. The move is part of a wider effort to add value to Amazon Prime and transform it into what some have called a complete "life bundle" as well as drive increased sales of fashion via the Amazon platform.
Called Prime Wardrobe, the feature is a box service that allows Amazon Prime members to try clothing at home before purchasing, and return unwanted pieces for free. Unlike Stitch Fix, a subscription box service that selects clothing for customers based on budget and lifestyle through a combination of algorithmic and human stylists, Prime Wardrobe allows customers to make their own selections across women's, men's and children's clothing and accessories. Prime Wardrobe also incentivises consumers to buy several items at once, by offering a 10 percent discount on three or four kept items and a 20 percent discount on five or more kept items.
Customers who enjoy the ease of Bonobos Guideshops, for example, where the company's products are available to try on before being sent directly home, might find Prime Wardrobe appealing. Amazon is increasingly facing off against Walmart, the world's largest retailer, which announced its acquisition of Bonobos for $310 million on Friday.
The box model has also proven it can be lucrative. With an annual revenue of $730 million, Stitch Fix is eyeing an IPO, according to tech industry site Recode. The company currently offers mid-priced women's and men's clothing, but has plans to add higher-end brands to the mix. So far, such try-before-you-buy services have stuck to the mid-market, though there is potential to extend the idea to the luxury segment, where leaders like Net-a-Porter and MatchesFashion have focused on faster delivery. Net-a-Porter's "EIP" (Extremely Important People) customers can already use the company's “you try, we wait” service on same-day orders. — Chantal Fernandez
Kering responds to 'made in' allegations
The French conglomerate has denied allegations by Selima Optique, a designer eyewear retailer, which claims Kering falsely advertises Chinese-made eyewear as "Made in Italy."
“Kering Eyewear denies all allegations made by Selima Optique,” said a statement issued by the company. “Kering Eyewear luxury products are made in Italy and are labelled in compliance with all applicable law.”
The claim from Selima Optique — which sells both its own eyewear as well as third-party brands at stores in New York, Paris and Los Angeles — was filed in federal court in New York on Monday and follows a similar report that appeared in The Guardian on Saturday which said that many of Louis Vuitton’s shoes were made in Romania and stamped as “Made in Italy.”
In its filing, Selima Optique alleged that Kering's "products, or substantially all parts of their products, are made in China, and (at best) shipped to Italy for final assembly and packaging, and then exported,” calling the mislabelling a “deceitful bait-and-switch scheme.”
The practice of manufacturing products in countries with low labour costs, then finishing them in Italy to attain "Made in Italy" labelling, is a fairly common practice in the luxury industry.
A spokesperson for Kering told BoF the lawsuit stemmed from a dispute with a wholesale account and acknowledged that company had made a mistake, saying Kering was still investigating the matter but believed the issue to be contained to 21 items, which were stamped with "Made in Italy" and then mistakenly stamped again with "Made in China." One of these was distributed to Selima Optique while the remaining 20 went to other wholesale clients. — Limei Hoang
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