Traditionally, a ’boutique’ within a North American department store was simply a space dedicated to displaying a brand’s merchandise. The department store operated the shop, including its staffing, merchandising and displays.
The trend of the designer brand-owned concessions is changing this, however what is a concession?
A concession is essentially a miniature store operated by the brand, and located within a larger store. Under this model, brands occupy space within the larger department store in return for paying a lease and a percentage of their sales to the larger store. Apparently, this relationship provides luxury brands with a number of significant advantages.
Piaget and David Yurman are the latest luxury brand to begin operating its Canadian shops-in-stores as leased concessions.
Piaget first Canadian location as a concession boutique at Saks Fifth Avenue Toronto Queen Street
For years, luxury brands have played key roles within upscale North American department stores, and this relationship is evolving towards the concession model. The current tendency is that more brands open their owned concessions as leased boutiques within North American leading luxurious department stores, including Saks Fifth Avenue, Holt Renfrew, Neiman Marcus, Barneys New York, as well as the more high-end flagship of some mid-priced department store, such as Bloomingdale’s, Hudson’s Bay and Nordstrom.
Holts Yorkdale Concessions
It is manifest that operating stores as concessions instead of opening free-standing bounties are more sustainable. The most important point is that larger department store shares the same resources with concessions such as floor, Loss Prevention Team, light, POS system, receipts concierge service, other infrastructure like washroom. Also, it has better operational feasibility. On top of that, concessions have the same atmosphere and standard of display as fee-standing boutiques but less construction area needs to be done before grand opening day, as well as repair and protection fee which means less operational costs needed. Moreover, according to different leasing agreements, some brands’ concessions may share the same packaging with department store, of example Burberry’s concessions within all Holt Renfrew stores use the same paper bay as what Holts use. This is a good way to save resources as well.