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Sep 15, 2020

Amazon launches luxury store on app with just one brand so far

Notable Calls: Amazon, Eli Lilly and Peloton

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Amazon.com Inc. has launched a “Luxury Stores” platform in a bid to persuade upscale brands to sell their wares on the e-commerce giant’s marketplace.

Oscar de la Renta is the first and only brand so far, though the company says more are expected to join in the coming weeks.

The new shopping experience will be available on Amazon’s mobile application by invitation only to eligible Prime members. Customers can view products in 360-degree detail on different body types and skin tones. Invites will be extended to other shoppers over time, the company said.

Amazon has long struggled to attract couture labels, even after participating in fashion shows and hiring executives from style hubs such as Vogue magazine and Ralph Lauren. Fashion labels generally prefer carefully curated selections and direct relationships with their customers, in contrast to Amazon’s marketplace format.

By some estimates, Amazon recently surpassed Walmart Inc. as the largest seller of apparel and footwear in the U.S. But analysts say much of those sales are basic clothing items, not high fashion.

KeyBanc Capital Markets Analyst Edward Yruma said he was expecting a “larger brand or a collection of smaller brands” for the launch.

“The partnership with Oscar de la Renta is somewhat surprising,” Yruma said. “Oscar’s apparel presence in the traditional wholesale channel has waned over recent years and the brand has been increasingly reliant on its jewelry and fragrance offering.”

Amazon’s foray into luxury fashion could be a further blow to struggling department stores and boutiques left reeling from the pandemic, he said.

Luxury labels have been hesitant to partner with Amazon, turned off by counterfeiters on its third-party marketplace and the e-commerce giant’s reputation for giving brands less control over how their wares are marketed than physical retailers. Amazon has tried to allay their concerns for years, with pledges to crack down counterfeiting and tools to help brands curate their own corners of the company’s sprawling retail site.

In China, Alibaba Group Holding Ltd.’s Tmall has lured more than 180 brands to its Luxury Pavilion platform, including Chanel, Bottega Veneta and Cartier.

Amazon routinely launches retail experiments, folding them quietly if they don’t pan out. Abandoned efforts include MyHabit, a flash-sale fashion portal, and the Echo Look, a camera Amazon had pitched as a way for shoppers to get algorithmically-powered advice on their look.

--With assistance from Matt Day.