Exhibit 6 | Best-Practice Luxury Brands Customize Assortments to Individual Cities Pricing at luxury monobrand store in New York City (% by price range) Pricing at luxury monobrand store in Houston (% by price range) 100 100 80 80 60 60 40 40 20 20 0 20 Apparel 40 60 Shoes Bags Prices (US$) <4,000 <2,000 <1,000 <500 <300 <100 <50 80 100 Jewelry Small leather Misc.1 goods % of assortment 9% 22% 30% 22% 17% 0% 0% 31% 69% 0 20 Apparel Bags Prices (US$) <4,000 <2,000 <1,000 <500 <300 <100 <50 40 Shoes 60 80 Jewelry 100 Misc.1 Small leather Fragrance goods % of assortment 1% 13% 24% 31% 26% 5% 0% 14% 81% 5% Source: BCG store visits and analysis. 1 Includes hats, gloves, ties, socks, scarves, and underwear. is having to contend in China with a growing gap between consumer spending in major urban centers like Shanghai and Beijing and in secondary cities where luxury brands are still a novelty.”1 isting cities—moving stores as well as renovating and expanding existing locations. The phenomenal proliferation of tourism will continue to drive growth for brands. With localized go-to-market strategies comes a need for simplicity of branding. Early efforts are under way: in 2012, Dolce & Gabbana folded its secondary D&G brand into the main label. Similarly, U.S. department store Barney’s has decided to rename all the Co-op stores as Barney’s, even though it may mean that smaller-format stores offer different assortments than those at the flagship stores. Gucci’s tiered approach to retail and merchandising means that in cities where the brand already has good business, the full product offering is available. By contrast, in new locations Gucci will offer “entry-level leather goods and accessories before gradually introducing ready-to-wear and other accessories as consumer tastes mature.” In addition to the new tiered model, the brand will pay more attention to optimizing within ex- Develop aggressive strategies for reaching tourists. The phenomenal proliferation of tourism will continue to drive growth for brands. Brazilians, Chinese, and Indians have been especially keen spenders while on vacation abroad. China is set to become the largest “source market” for outbound travel; tourists from that country are now the world’s biggest group of tax-free shoppers. By 2020, its overseas vacationers will constitute roughly 10 percent of the inbound tourists in 17 | Shock of the New Chic 20 Fondation de la Haute Horlogerie 59