The snob factor In 2008, for example, the Vuitton Damier Graphite Canvas Daniel MM N58029 expensive Louboutin item that Saks sold was a $1,575 pair of suede boots. Now, it is a $2,495 pair of suede boots that are thigh-high. Creme de la Mer, the facial cream, cost $1,350 for 16 ounces at Bergdorf Goodman in 2008; it now costs $1,650. “I think that Vuitton Damier Graphite Canvas Ieoh N45252’s willing to pay whatever price the manufacturer and the retailer deem appropriate, if she sees that there’s intrinsic value in it,” Katz said. Part of the demand is also driven by the snob factor: At luxury stores, higher prices are often considered a mark of quality. “You just can’t buy a pair of shoes for less than $1,000 in some of the luxury brands, and some Vuitton Damier Graphite Canvas Ieoh N45259 the price points have gone to $2,000,” said Jyothi Rao, general manager for the women’s business at Gilt Groupe, a website that sells designer brands at a discount. “There’s absolutely a customer for it.” Jennifer Margolin, a personal shopper in San Francisco, said Vuitton Damier Graphite Canvas Iphone Case N62667 had noticed changes in her clients’ attitudes about spending thousands of dollars on just one item. They “pay price if they absolutely love it,” she said. “Before it was almost completely shying away, where now it’s like, ‘OK, I’m comfortable getting a Goyard bag,’ but they get it for the quality.”
Too many items were chasing too few Vuitton Damier Geat Canvas M58038(Coffee), and high-end stores began cutting prices. As a result, consumers waited for 70 percent discounts rather than buying right away. Sales of luxury goods dropped 17.9 percent in Vuitton Damier Graphite Billfold N61711 2008 from a year earlier, according to SpendingPulse, and double-digit declines continued through May 2009. Now, many stores are stocking up on luxury merchandise, as Vuitton Damier Graphite Canvas Computer Sleeve 13 Inches N flock to racks of expensive goods. “They’re buying the special pieces, whether it’s the exotic leathers, the more fashion-forward pieces,” said Stephen I. Sadove, the chairman and chief executive of Saks Fifth Avenue. “There’s a dramatic decline in the Vuitton Damier Graphite Canvas Computer Sleeve 15 Inches N of promotions in the luxury sector — we’re seeing higher levels of full-priced selling than we saw prerecession.”
Targeting a key group The success Vuitton Damier Geant Canvas Messager NM M93226(Coffee) retailers are having in selling $250 Ermenegildo Zegna ties and $2,800 David Yurman pave rings — those encircled with small precious stones — stands in stark contrast to the retailers who cater to more average Americans. Apparel stores are holding near fire sales to get people to spend. Walmart is selling smaller packages because some shoppers do not have enough cash on Vuitton Damier Geant Canvas Messenger M93030(earth) to afford multipacks of toilet paper. Retailers from Victoria’s Secret to The Children’s Place are nudging prices up by just pennies, worried that they will lose customers if they do anything more severe. While the free spending of the affluent may not be of much Vuitton Damier Geant Canvas SOUVERAIN M93015(earth) to people who are out of jobs or out of cash, the rich may contribute disproportionately to the overall economic recovery. “This group is key because the top 5 percent of income earners accounts for about one-third of spending, and the top 20 Vuitton Damier Geant Viktor M30142 accounts for close to 60 percent of spending,” said Mark Zandi, chief economist of Moody’s Analytics. “That was key to why we suffered such a bad recession — their spending fell very sharply.” Just a couple of years ago, luxury goods retailers were suffering.
“Overall, you want to wear less branded Vuitton Damier Geant Canvas Couguar M93083(earth),” she says. “If you have the wherewithal to spend, you never want to be showy about it.” Still, she says, she is quick to buy at the beginning of each season. “I buy things that could sell out,” she says. The recent earnings reports of some luxury goods retailers and Vuitton Damier Geant Canvas Loup M93077(earth) companies show just how much the high-end shopper has been willing to spend again. Tiffany’s first-quarter sales were up 20 percent to $761 million. Last week LVMH, which owns expensive brands like Louis Vuitton and Givenchy, reported sales growth in the Vuitton Damier Geant Canvas Loup M93079(black) half of 2011 of 13 percent to 10.3 billion euros, or $14.9 billion. Also last week, PPR, home to Gucci, Yves Saint Laurent and other brands, said its luxury segment’s sales gained 23 percent in the first quarter. Profits are also up by double digits for many of these companies. BMW this week said it more than doubled its quarterly profit from a year ago as sales rose 16.5 Vuitton Damier Geant Canvas Messager NM M93225(Black); Porsche said its first-half profit rose 59 percent; and Mercedes-Benz said July sales of its high-end S-Class sedans — some of which cost more than $200,000 — jumped nearly 14 percent in the United States.
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