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Blog: The Rich and the Poor’s

S&P has downgraded the nation’s bond rating. And yet, luxury retail is thriving

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Strange days indeed, Mama. Standard & Poor’s has lowered the United States’ AAA bond rating for the first time in modern history. And the stock market goes up and down like the Coney Island parachute ride.

But it looks like the luxury retail market is alive and well again.

Not long ago, we were having to report how Neiman Marcus, Tiffany, Saks Fifth Avenue, Bloomingdale’s, Gucci, Ralph Lauren and the other members of the club were suffering. It was depressing, especially for a store design industry that has to keep moving to live.

Well, weep no more, my ladies. According to The New York Times, “Nordstrom has a waiting list for a Chanel sequined tweed coat with a $9010 price. Neiman Marcus has sold out in almost every size of Christian Louboutin ‘Bianca’ platform pumps, at $775 a pair. Mercedes-Benz said it sold more cars last month in the United States than it had in any July in five years.”

I guess we should have been anticipating this. We keep hearing how Wall Street profits are higher than ever. Banks seem to be doing great. Crazy bonuses are being paid again. And that’s only good news to Cartier, Lexus and Whole Foods Market.

The Times’ article contained a dizzying array of happy numbers and percentages. “Tiffany’s first-quarter sales were up 20 percent to $761 million,” wrote Stephanie Clifford. “Last week LVMH . . . reported sales growth in the first half of 2011 of 13 percent to . . . $14.9 billion. Also last week, PPR . . . said its luxury segment’s sales gained 23 percent in the first half. Profits are also up by double digits for many of these companies.

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“BMW . . . said it more than doubled its quarterly profit from a year ago as sales rose 16.5 percent; 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.”

Was it all good news? Maybe only on Rodeo Drive. “Apparel stores are holding near-fire sales to get people to spend,” the article went on to say. “Walmart is selling smaller packages because some shoppers do not have enough cash on hand to afford multipacks of toilet paper. Retailers from Victoria’s Secret to the Children’s Place are nudging prices up by just pennies, worried they will lose customers if they do anything more.”

But enough boo-hooing. As long as the wealthy keep shopping, architects and designers will be hired, fixtures will be built, mannequins will be needed, lighting and graphics and wallcoverings will be ordered.

After all, the rich are “the job creators.” Aren’t they?
 

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