"Vente-privee.com Refashions Closeouts"

(Article taken from Business Week and was published on January 11, 2008)

Vente-privee.com is a six-year old French company that holds invitation-only closeout sales over the Internet—and attracts a million unique visitors a day who buy, on average, 40,000 items daily. It is named for the frenzied invitation-only private designer overstock clothing sales that are held in Paris and known as ventes privees. Fashion houses had found ventes privees as a reliable and time-tested way to get rid of overstock. But now such luxury labels and even consumer products companies are increasingly turning to the online alternative for such inventory-clearance over the Internet proving to "have created an entirely new channel for brands". The company has already attracted more than 600 brands including such names as Givenchy, Dolce & Gabbana, and Armani Casa. Now such exclusive brands are being joined by mass-market sellers such as Adidas, Swatch, and Mattel. For such brands, the lure is a greater control over protecting their brand image thanks to Vente-privee.com's exclusive merchandising contracts along with greater efficiency while also earning twice the margins than would have been earned via more traditional closeout sales methods.

Overstock is unavoidable in manufactured goods, thanks to everything from fashion misses to production planning mistakes to unexpected weather. On average, it amounts to between 5% and 10% of all merchandise—and sales of inventory closeouts top $30 billion annually in the U.S. alone. With a neverending supply of overstock along with Vente-privee.com's unique combination of exclusivity, selection, price, and value-added merchandising is paying off for the company. Realizing the opportunity within this niche, others are trying to jump in on the game, however, having built up strong relationships with brands, Vente-privee.com is expected to continue outshining all others (competitors) that try to follow their lead. In fact, the company even claims to be 30 times larger than its nearest rival.

It is important to continually keep up with the latest retail trends, in particular, those that relate to fashion. Good to know how designer brand overstock is redistributed in a timely yet profitable manner. Such e-commerce is only going to continue growing in the future.