Retail Detail. Luxury Retailers Get Lump of Coal This Holiday Season.

December 12, 2007 • Shopping


Check out why this holiday season is the worst for luxury retailers since 2002. Did you know there was a "Luxury Institute?" Isn’t that a gas?

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Retailers that cater to America’s richest consumers are losing their
least affluent customers – those who buy jewelry and designer scarves
only when flush with cash – during the biggest selling season of the
year. Falling home values are discouraging purchases in the fourth
quarter, a period that accounts for a third of retailers’ annual
earnings, according to the International Council of Shopping Centers,
or ICSC.

Neiman Marcus, whose customers have an average annual household
income of $250,000, according to Citigroup, said it faced "somewhat
challenging" client demand.

Sales growth at the six top U.S. luxury-goods sellers may shrink
further next year, with revenue rising 5% to 8%, down
from "high single-digit" percentage gains this year, the Luxury
Institute, a research firm in New York, said last week.

"You’re throttling back," said Milton Pedraza, chief executive of
the institute. "You ask yourself, ‘Do I buy that second home, do I buy
that expensive watch, do I take that super-lavish vacation?’ Now,
either you say, ‘No,’ or you scale back."

The slowdown is occurring among low-tier affluent shoppers, while
the richest Americans continue spending on designer merchandise, Neiman
Marcus, Saks, Nordstrom and Polo said.

Read "U.S. luxury retailers like Tiffany gird for disappointing holiday results"

Sources: Bloomberg Video & International Herald Tribune

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