Dear friends returned with big smiles and fat packages after a trip to Las Vegas prior to Christmas. Ulf and Andrea walked into the Saks Fifth Avenue store on Las Vegas Boulevard–and encountered rack after rack of clothing discounted up to 80 percent off.
These were sales never seen in the weeks before Christmas, and they happily bagged up their luxury bargains and returned to Southern California.
They are also Realtors, and it’s some comfort that the luxury home market is suffering a far less precipitous decline compared to luxury retailers, but that’s probably because people stay in their homes far longer than they do a $500 pair of jeans or Jimmy Choo heels.
And as today’s San Diego Union Tribune reports, Neiman Marcus saw its December same-store sales fall 27.5 percent, while sales at Nordstrom, Saks and Abercrombie & Fitch also dropped into the double digits. Even Chanel at rue Cambon is shedding 200 jobs, or almost 10 percent of its work force in a move that should send shudders down the backs of luxury retailers and other haute couture houses.
The Luxury Consumption Index shows a chilly decline of 41.7 percent year-over-year in a December survey of 1200 consumers earning an average of $200,000 per year. Some of the drop is attributable to investment and income declines, but much also comes from a drastic attitude shift from conspicuous consumption to one of fear and conservative saving.
Buying attitudes may be shifting toward hiding money under the proverbial mattress, but I am inclined to sharpen the pencil and consider once again Baron Rothschild’s advice to “buy when blood is running in the streets.
Blue chip luxury real estate and securities are soooo attractive covered in red–at least for buyers.