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No More $1,400 Handbags For You!

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By ERIC WILSON, The New York Times

Published: January 14, 2008

For products that are truly in demand, such as Wii game consoles, tickets to the Super Bowl or cans of corn Niblets on double-coupon day, it may seem reasonable to limit the number a customer can buy at one time.

But readers of the fine print on the Web sites of luxury retailers such as Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman may be surprised to discover that such a policy also now applies to designer handbags, such as Prada's latest ruched nylon styles, which cost $1,290; Bottega Veneta's signature woven leather hobos, at $1,490; and the new rectangular Yves Saint Laurent clutch that looks like a postcard addressed to the designer (with a $1,395 stamp).

"Due to popular demand," potential shoppers are warned, "a customer may order no more than three units of these items every 30 days."

Popular, the bags may be. But how many of the customers who can afford them really want more than one or, for that matter, three?

On its face, the policy sounds odd; that is because it really doesn't have anything to do with popular demand. Rather, it is the fear that foreign buyers, taking advantage of the severely weakened U.S. dollar, will hoard the bags, then resell them in Europe or Asia, where the same items in Prada and Gucci stores typically cost 20 percent to 40 percent more. The popular Yves Saint Laurent Downtown bag, which is restricted to three per customer at Saks Fifth Avenue and Bergdorf Goodman, costs $1,495. At Harvey Nichols in London, the same bag is 910 pounds (or about $1,796).

Foreign tourists who are treating American department stores as if they were a nationwide outlet sale have largely been viewed as beneficial to retailers, and by some estimates those shoppers were the only bright spot in what was otherwise a feeble holiday sales season.

But that spending power has not been so welcome to luxury companies such as Gucci and Prada, which have spent the last decade trying to reach those customers in their home countries by opening expensive new shops throughout Europe and Asia.

Now those companies stand to suffer a sting from increasingly educated comparison shoppers, if not a more serious blow from a gray market of designer goods resold from American stores.

Ron Frasch, the chief merchant of Saks Fifth Avenue, which has 54 stores across the country, said the number of foreign shoppers trying to buy multiple items in stores was "pretty minor," but he added, "it is certainly an issue that we watch." Besides restricting online sales, Saks may deny a customer's purchases of duplicate merchandise in stores on a case-by-case basis.

"What we try to do is use a lot of logic and common sense if we sense that someone is taking advantage," Frasch said. "We monitor at the store level and at the corporate level for any patterns. We are very sensitive, first and foremost, to serving the customer, but secondly to any potential for reselling by customers."

Quotas aren't just for handbags. In its online store, Apple is limiting customers to five iPhones per order.

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