Visiting Australia last week for the Guess global conference, Livingston said she noted that most Australian retailers were in a discounting cycle.
“It seems to me that everybody is in a discounting phase, seeing who can do it faster than the next guy. I’ve been through this phase in the US and what happens is you trade down your business and trade down the market and it becomes a vicious cycle of who can do it more,” Livingston said.
As a former retailer, Livingston believes constant discounting can be a risky business strategy. “You sell off [discount] all your good product and you’re left with all your ‘bad’ product and you’re still trading at 20 per cent off [sales]. The problem is that you should be running the slow stock at 40 per cent off and continuing to replenish good product,” Livingstone advised.
She says history shows that sooner or later everyone becomes more positive about the economy and “all the discounting will stop and business will come back really fast because you’re not continually trading down.”
Livingston joined the watch licensee group Callanen International in 1989 (now Sequel AG) - five years after its inception, and was promoted to president and CEO in 1997. She is credited with starting the international business for Guess Watches, now recognised as one of the largest licensed watch brands in the world. She is also credited with introducing Gc, the Swiss-made brand.
Livingston believes that the fashion watch category is seen by US retailers as matching the quality watch sector (mainly Swiss) so the US fashion watch category is relatively unaffected by brand discounting.
“No one in the US is discounting in the watch category because right now we’re in an up cycle. Maybe there’s some discounting going on in jewellery and handbags that aren’t selling but the watch category has remained pure.
“I think Australia is just in a different stage of the [business] cycle and when people get more positive [about the economy] someone will stick a stake in the ground and they’ll stop discounting and others will follow and business will start to increase again,” she added.
As president of the Swiss-based Sequel, Livingston was in Australia for the company’s annual global conference. Over 200 international distributors from 60 countries attended the global conference that was hosted by Australian distributor, Designa Accessories.
The four-day event included the launch of the Summer 2011 collection. Over 450 guests, including leading Australian Guess retailers, attended the season launch at Sydney’s leading independent rock venue, The Metro Theatre last Thursday night.
The night’s highlight was when singer Stan Walker performed a number of songs including his version of the Prince classic, “Purple Rain”. Purple is the key colour trend of the new 2011 Guess collection.
As part of the festivities, a group of almost 200 Guess and Gc Watch delegates climbed the Sydney Harbour Bridge in a global fundraising initiative, ‘Faces to Watch – Time to Give.’ Sequels arranged for a helicopter to film and photograph the bridge climb and Designa Accessories general manager, Justin Veil said the only other time that occurred was during Oprah Winfrey's visit.