Italian Luxury Fashion at a Discount: Italist’s US Expansion

Italist is tapping into the growing American enthusiasm for Italian luxury fashion with a strategic approach that blends seasonal discounts and curated selections.

By expanding into the U.S. market, Italist aims to capitalize on the demand for high-end Italian brands, offering a more accessible entry point for American consumers who seek both quality and value in their luxury purchases. This move reflects Italist’s intent to integrate Milan’s renowned fashion directly into American high-end wardrobes, transforming the way Italian luxury is experienced stateside.

Putting a Price on Italian Fashion

At the heart of Italist’s strategy is a unique pricing model that capitalizes on the seasonal inventory of Italian retail. This model enables the platform to offer luxury fashion items at discounts of 30% to 40% off traditional retail prices.

“We were able to offer new trends before everybody else,” Italist CEO Diego Abba explained in an interview with PYMNTS CEO Karen Webster.

This ability to present high-quality, contemporary fashion at competitive rates sets Italist apart from conventional luxury retailers, allowing it to attract discerning customers looking for both exclusivity and value.

Curated selection plays a significant role in Italist’s operations. Abba highlighted the platform’s rigorous brand curation standards, noting, “There’s a certain curation from our side as well.” Unlike competitors that form exclusive contracts with boutiques, Italist offers a diverse range of brands. This approach enables the platform to provide an extensive luxury product range.

Inventory Controls

Operating as a merchant of record, Italist has control over inventory and pricing, which contributes to a seamless shopping experience. “We control everything from inventory to pricing,” Abba stated, emphasizing the importance of this control in delivering a reliable customer experience.

In a market dominated by established names like Chanel and Hermes, Italist’s strategies make it a notable competitor. Abba recognized the ongoing success of these brands, noting that “Chanel and Hermes continue to post sales growth,” due to their exclusive distribution channels. He acknowledged that this exclusivity plays a crucial role in their sustained appeal.

Abba also discussed his views on the broader luxury market, expressing respect for past designers like Versace and Armani, who were known for their craftsmanship. “They were all very great at really cutting the dresses,” he said. He contrasted Gucci’s 70s-inspired style with his interest in Valentino’s future direction.

Multibrand Shopping Experience

In the context of industry trends, Abba highlighted Chanel’s successful expansion into cosmetics, stating, “Chanel has a very strong profit line with cosmetics.” He stressed the importance of such strategies for new luxury entrants. Abba’s own philosophy of luxury, focused on quality akin to high-end gastronomy, aligns with the values of brands like Hermes. “For me, luxury is really the passion for quality,” he explained.

For the second quarter, Italist reported an 8% increase in revenue compared to the first quarter. The company manages inventory from more than 2,500 brands, primarily Italian, and deals with challenges such as product authenticity and customs complexities.

Despite rising costs and unpredictable customs fees, Italist maintains a four-day shipping standard. However, its aggressive pricing strategy and no-return policy have raised concerns about long-term profitability. “Pricing is a combination of what the brand agreed to sell it to us and what we decide to sell,” Abba noted, adding that high return costs due to international shipping and customs mean the company cannot offer free returns. “We always recommend to check carefully before purchasing. The risk of returning is high.”

Looking ahead, Italist’s success will depend on its ability to integrate advanced technology to streamline transactions and enhance customer experience. Abba’s strategy combines tradition with innovation, positioning Italist to adapt to the evolving luxury market and meet the growing demand for personalized and high-quality offerings.