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?
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,
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.
Sources: Bloomberg Video & International Herald TribuneSee the Top Ten Summer 2016 Trends for Women Over 40