Fashion

Vetements' CEO Guram Gvasalia Reveals Why the Label Purposefully Limits Its Supply

“If you can go to the store and get whatever you want, it’s not luxury.”

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Vetements' CEO Guram Gvasalia Reveals Why the Label Purposefully Limits Its Supply

“If you can go to the store and get whatever you want, it’s not luxury.”

As one of the most sought-after brands on the market now, you would expect to find Vetements well-stocked at some of the world’s most premium boutiques and stores. Well, that’s not the case. Once Vetements stocks up at any of their 135 stockists worldwide, it is almost immediately cleared off the racks, with zero possibility of a restock. To this, we have the label’s CEO, Guram Gvasalia to thank. In an interview with Sarah Mower at The Royal Institution in London, Guram revealed why the label practices such exclusivity, whether it be the supply of its products or its choice of stockists. The notion may still seem astonishing to some, but Guram proves to be a very smart businessman. One point that Guram stressed on is “luxury is scarcity,” further explaining the point by saying that he “[doesn’t] consider Louis Vuitton to be a luxury brand – yes, the quality is luxury, but if you can go to the store and get whatever you want, it’s not luxury.” Read the excerpt of the interview below or check out the full conversation on 1granary.

Luxury is scarcity

“Luxury was always something that was scarce. Today, I don’t consider Louis Vuitton to be a luxury brand – yes, the quality is luxury, but if you can go to the store and get whatever you want, it’s not luxury. For us, the important thing is that we don’t restock and once you come to the showroom, it’s the only chance you’re going to have to place an order. Once it’s sold out, it’s sold out. We had hoodies from the first season that sold out super quickly and we had thousands of requests to make the hoodies again. If we were to, we would probably be able to make a million in a day. It’s out of respect to the people that bought them first that we don’t.”

Start with the basics: supply and demand

“There’s a basic model you learn in business school. It’s called supply meets demand. There are two curves and the point where they intersect is how much you are suppose to produce. It always feels like everyone is ignoring this very simple thing. Because if something goes on sale, it means it was overproduced. We are always trying to change the supply curve, making it just a little bit less than the demand curve, to make sure that you sell out. It is always better to sell one piece less to a store and to be sold out than to sell one piece extra and to go on sale. Because once you go on sale, there’s no going back.”

Beware of the Italian market

“Something that people never talk about is the Italian market. There’s only one store in Italy that doesn’t do parallel business and that’s 10 Corso Como. Every other store in Italy does the fake market. There are amazing stores in villages with a population of 2,000 and the stores look fantastic – they have all the brands. Compared to somewhere like Antwerp, where a good store will have a turnover of €2 million a year, a store in that village in Italy will have a turnover of €200 million. What they do, is that they buy their merchandise and then sell it to people in Asia. Bigger brands are aware of the situation, but they like it because it increases the price of the shares on the stock exchange.”

You must be selective in order to grow sustainably

“It’s very important that once you start growing, you slow down the process of the growth. And you try to stay on a certain level. For us, we had a lot of men buying the clothes from the womenswear collection. It is also figuring out and understanding how many of those men are going down [to the shop] to buy menswear. Are they still going to buy women’s? The sales for women’s was insane last season. We delivered in the beginning of February and the sell-through has been between 70 and 80%. It is very high for industry standards. Then, the stores come and they want to give you a bigger budget, and you get a little bit afraid that you are selling too much. So basically, we reduced the men’s and just limited the amount of stores that can buy it. We put caps on women’s orders; for example, stores cannot buy more than ten pairs of jeans and Italian stores are not allowed to buy more than four pieces of jersey in one style. In November, Barney’s asked us what the minimum for the order was. And I said: there’s no minimum, but there’s a maximum. And they said that no one ever speaks about maximum.”

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Source
Racked
Photographer
Colin Dodgson/W Magazine
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