WWD: Amazon to sell luxury fashion

Dive Brief:

Amazon is planning a luxury apparel platform — to be introduced first in the U.S. and then expanded internationally — and is already working with 12 unnamed brands, according to a report from Women's Wear Daily citing unnamed industry sources.
Not to be among them is French luxury conglomerate LVMH Moët Hennessy Louis Vuitton, which was approached by Amazon but refused to participate, according to the report. The e-commerce giant is said to be building a warehouse in Arizona dedicated to the project and planning a $100 million campaign to market it, WWD also said.
Amazon through a spokesperson declined to comment, saying in an email to Retail Dive, "I can't comment on rumors or speculation."

Dive Insight:

If true, a move into luxury fashion would be a far cry from Amazon's apparel trajectory so far. Despite significant moves to develop its own private label clothing, the e-commerce giant at the moment sells mostly generic brands, largely in basics and activewear, for the most part through its third-party sellers, according to a Jan. 8 Amazon apparel update from Coresight Research.

The number of nonbranded or "generic" apparel items sold by Amazon in September 2019 grew 906% year over year, and topped their ranking, Coresight researchers found. Among 2,633 brands selling on Amazon, meanwhile, the top three are InterestPrint (which sells printed apparel basics), Hanes and Gildan, according to Coresight's report, which was emailed to Retail Dive. And most apparel products (including, for example, Nike) are sold through Amazon's Marketplace: Those sellers were moving 87% of Amazon apparel items as of last September, up from 84% the prior year, Coresight said.

Amazon's history with bigger names is decidedly mixed. Some, including Birkenstock and most recently Nike, have joined, then left. In 2016, Birkenstock cited counterfeit concerns when it left, a problem that has hardly been rectified. Nike, in announcing its departure in November, characterized the move as simply dropping a distribution partnership, though some analysts believe the sportswear giant desires more control over its brand than Amazon now offers.

Amazon has apparently taken that note. Its luxury apparel platform would give brands "full control" over their pages, including how much they sell and at what price, while providing access to Amazon's super-efficient fulfillment and customer service chops, according to WWD's report.

Such an effort could boost Amazon's take in the market, according to some analysts. "Brands want a controlled US marketplace (like Tmall)," Credit Suisse analyst Michael Binetti wrote in a Jan. 8 client note. "Unclear if [Amazon] would offer the data sharing that brands like [VF Corp., Nike or Estee Lauder] crave, but could re-accelerate [Amazon's] share gains in softlines beyond lux."