Experts assume that due to the economic lockdown, more than 100 million luxury items like textiles, shoes, fashion accessories and handbags will be on stockpile worldwide by the second half of 2020. This puts many brand manufacturers and retailers in dire straits. Many of them will be forced to sell their products at high discounts to clear their stocks, secure liquidity and make room for new collections.
For some bargain hunters this may sound tempting at first since there will be ample opportunity to get hold of exquisite pieces at a discount. Factory outlets will be flooded with such bargains. But there is also a reverse side: Brands with a strong image carefully cultivated over the years will swiftly lose both image and value through clearance sales. Future collections will also be permanently affected once a brand's prestige has suffered.
In this challenging situation, in contrast, SEKRÈ consistently follows its strategy of sustaining value and continues to build on the rarity of its products. Admittedly, the prices of some of our editions have slipped slightly, as the valuation algorithms we use also take into account the slump in sales on the markets. However, so far the value performance of SEKRÈ handbags has been much better than that of many financial investment or tangible assets.
In order to keep it that way, we have temporarily stopped our production and deferred the launch of upcoming editions and new bag models. Due to strictly limited numbers, our present editions are still rare and therefore attractive both for collectors and investors. We maintain a well balanced stock of goods, which can also be purchased through our online shop. There is no excess stock that could force us to sell off later under price presure. Furthermore, our concept of not following any current vogues is now paying off. The classic design of mystery bags never goes out of fashion, therefore its attractiveness is not afffected by seasonal trends or economic shocks such as the Corona crisis.
Especially in times of uncertain economic prospects, many investors are looking for stable investment opportunities that are less sensitive to short-term market fluctuations. As experience has shown, first-class premium products which are only available in limited quantities, perform particularly well in times of crisis. This is why our business strategy benefits all customers who also purchase our bags under the aspect of a stable investment.
We will rather forego short-term sales than question our basic principles. Because any SEKRÈ is intended to remain rare and desirable for years to come. Just how much our philosophy pays off became evident only recently in March this year at an international auction of luxury goods - at a time when Corona lockdown measures had already begun. For the first time, a second-hand SEKRÈ mystery bag was auctioned off for a 5-digit price.
We consider this an important vote of confidence in SEKRÈ and are well prepared to continue our strategy of consistently high-quality brand management in the future.