US clothing retailers test full-price strategy as rich shoppers keep spending

Aritzia

05/09/2025 11:00

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      Retailers see little pushback on full-priced clothes so
far
    

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      Stock market gains buoy wealthy shoppers' pockets
    

  
    By Siddharth Cavale
       NEW YORK, Sept 5 (Reuters) - A handful of apparel
retailers including Levi's and Aritzia are teasing more
full-priced products, testing how much wealthier shoppers are
willing to pay despite the sobering effect of tariffs.
    They have not been disappointed so far.
    Levi Strauss  LEVI.N , for instance, raised prices on some
products in July but saw no slowdown in demand, the denim
maker's chief financial officer, Harmit Singh, said at the
Goldman Sachs Global Retailing Conference in New York on
Wednesday.
    "We are making a full-court press in selling higher
full-price than we have done in the past," he said. "The Levi's
consumer largely earns $100,000 and over. And that consumer we
are seeing is generally resilient."
    Aritzia's  ATZ.TO  finance chief echoed that, saying there
had been minimal impact on how much the U.S. customer was
ordering after the high-end clothing maker raised some prices
earlier this year.
    The company, whose clothes are worn by celebrities including
Beyonce, Bella Hadid and Pamela Anderson, does not plan to chase
promotions and discounts this holiday season, offering instead
just one week of sales during Black Friday and then going full
price after Cyber Monday for the rest of the season.
    "With every passing week we become more confident that
consumer resilience is going to hold," the Canadian retailer's
CFO Todd Ingledew said at the conference on Wednesday.
    While lower-income households are hunting for bargains as
U.S. President Donald Trump's trade war has forced companies to
raise prices, wealthier consumers are buying steadily, largely
unaffected by the cooling labor market.
    Stock market gains and low credit card debt have bolstered
the finances of the affluent. According to Moody's Analytics,
the richest 10% of Americans - those earning at least $250,000 a
year - now account for half of all consumer spending.
    
    LOYAL SHOPPERS 
    Ralph Lauren  RL.N , Under Armour  UAA.N  and Abercrombie &
Fitch  ANF.N  are also leaning into a more full-price strategy,
they said in recent earnings disclosures.
    "We've been shifting our business towards a more elevated
full-price consumer base, and this has served us well as our
core consumer around the world remains resilient," Ralph Lauren
CEO Patrice Louvet said in early August. 
    Under Armour's CEO Kevin Plank said in August the company
was considering bumping up prices for the "embedded consumer who
we do have pricing power with," referring to loyal customers.
"We're seeing success testing new key items at full price,
including our $45 Self-form hat and our heat gear collection are
both strong examples."
    Due to better consumer-tracking technology now, retailers
are able to pivot quickly and offer targeted promotions if
stocks don't sell, helping retailers better maintain profit
margins, said Kate McShane, managing director at Goldman Sachs. 
    "In the old school way of doing things, you would get a
circular saying everything is 25% off ... Now if they're selling
North Face fleece jackets and it's 60 degrees in New York, they
can offer it on sale only for a couple of days in New York," and
keep prices the same elsewhere, she said.
    Many companies have absorbed a lot of the tariff costs
already, analysts said, and will try to discount as little as
possible through the holiday shopping season, compared to years
past when they discounted any extra items held in inventory.
    "If you look at Summerween and back-to-school this year, the
strategy there was to put the seasonal items on the shelves at
full price to start," said Alison Furman, a PwC retail
consultant, referring to Halloween-in-summer shopping. 
    "You're kind of testing the waters around what a consumer
will pay full price for. And then when it doesn't move, you very
quickly go into your promotion strategy." 
    

 (Reporting by Siddharth Cavale; Additional reporting by
Aishwarya Venugopal in Bengaluru; Editing by Sayantani Ghosh and
Sonali Paul)
 ((siddharth.cavale@thomsonreuters.com; +1 646-288-4330;
@sidcavale.bsky.social))