Sheer Elegance

With the huge run-up in the markets this year, the rich are getting richer.
They’ll need to find luxury items to spend their money this Christmas —
making such companies as Montblanc, Rolex and Versace very merry indeed.
In fact, the market for luxury goods is about $133 billion.

There is a way for the rest of us to participate, though: (ASFD)
. In less than two years, the company has built a comprehensive
product line that includes leather goods, handbags, fragrances, sunglasses,
products, jewelry, diamonds and watches.

There are several characteristics to the luxury market. First of all, it
fragmented. In other words, there is no one luxury superstore. By
centralizing online, can realize cost-savings. Second, there is
little price sensitivity and the average purchase is relatively high.

Such advantages are already benefiting For example, sales are
beginning to sparkle. In its latest quarter, they were $4.4 million, a 21 percent
sequential increase from the prior quarter. The customer base has
zoomed from 2,411 last year to 26,971 this year, with repeat customers
accounting for 16 percent of sales.

A major part of the growth came from key strategic distribution agreements.
In the Yahoo! deal, is a premier merchant and at AOL, is an anchor tenant at Jewelry & Watches and Accessories. takes customer service very seriously, which is of paramount
importance in selling luxury goods. Customer service reps are available
via phone, e-mail and online chat from 7:00 am to 9:00 pm, Monday through
Friday and 9:00 am to 5:00 pm on Saturday.

The site has many whiz-bang features, as well. For example, a
can do a virtual “Try It On” feature; that is, click a tie and place it on
a suit. Next year, users will be able to submit pictures
of themselves and do the “Try It On” feature.


What’s interesting is that has little competition in the luxury
market. Like eToys last year, is in a great position and
should have a tidy windfall. What’s more, can use its
first-mover advantage to tie-up exclusive agreements with product
suppliers. For example, of the 270 brands on, 50 are

Right now, is selling like a cheap suit at K-mart. However, as
the growth continues, it will look more like an Armani.

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