Cut back on luxuries

The free biscotti are gone and designer water is disappearing. The fact is, even the toniest of merchants no longer can afford to offer complimentary treats to browsing customers.

Perhaps for the first time ever, luxury and upscale retailers are being fashionably frugal, forced to remember that they are subject to the same vagaries of the marketplace and operational issues as their more downscale brethren. To remain viable businesses and match the new mind-set of their customers, they must adopt the attitudes and practices being used by other retailers.

Faith Hope Consolo, who oversees the retail operations of New York City-based Prudential Douglas Elliman Real Estate’s 50 offices around the United States, has worked extensively with luxury retailers such as Cartier, Versace, Giorgio Armani, Salvatore Ferragamo, Judith Leiber and Baccarat.

She offers the following dollar-saving advice to upscale retailers:

Look at rents. 

“Landlords who still want the prestige of a luxury brand are becoming flexible. Now is the time to ask for immediate reductions in rent or common charges lasting anywhere from three months to a year. Retailers located in office buildings can ask for help in defraying extra costs such as air conditioning,” advised Consolo.

Reduce operating hours. 

Depending on your merchandise, cut back your operating hours. “For example, certain merchants in lower Manhattan, which is still largely geared to financial district workers, have no or limited hours on weekends,” Consolo noted. “And, outside of major resorts like Las Vegas, no one buys a diamond necklace at 9 p.m.”

Trim or reallocate staff. 

Luxury shoppers increasingly are shopping by phone or the Internet, and retailers should move personnel to appropriate positions to serve these channels. Even the most fashionable, offline real estate can be used for supplemental selling.

Cut back or eliminate the frills. 

A store may be high-end, but in today’s economy, the accoutrements can be reduced. “The glass of Champagne, the cookie and the bottle of imported water from a well-stocked fridge should be replaced by a glass of water from a cooler in the back to maximize productive space,” said Consolo.

While it might be easy to bemoan the loss of these little luxuries, such cost cutting may help the bottom line during a challenging time. And employing any or all of these strategies ultimately will make luxury retailers smarter, more profitable businesses, according to the real estate expert.