[P]rices are often open to negotiation. As one Lord & Taylor salesperson said when a shopper inquired about the length of a sale: “There’s always a sale!”
So when exactly did it become okay to negotiate prices at a department store? They might as well get a fold out table and set up shop downtown in Soho or Beverly Hills, if things are getting this bad! Oh well, it looks like it will all work out great for us consumers. Why wait for a deal when you can make your own?
The Wall Street Journal’s magazine, WSJ., asks a question that my self have been wondering: Will and can the luxury-retail market survive the recession and the resulting everything-must-go 70 percent off sales that consumers are growing accustomed to? When was the last time you paid full price for anything designer? If I think back to the big Saks sale last year, at first, everyone was scandalized at just how low the prices fell. And now, we all expect it. Frankly, we won’t pay old-economy prices for our bags again(I know I won't). So what will happen to the high-end stores of yore? The Journal doesn’t really answer this, of course. Who can, unless they have one helluva great Magic Eight Ball. But the article does look at the new world of shopping, which isn’t really new to most fashion fanatics. Net-A-Porter changed the way houses looked at web retail, after Natalie Massenet started bypassing runway shows and buyers — with RM and Halston selling directly on her site. And she recently launched theoutnet.com, her outlet site, with which everyone is a touch obsessed. WSJ. also explores the glorious world of online sales at Gilt Groupe, and those traditionally gauche places, outlet stores. (Our best shoe finds ever were from the Neiman Marcus outlets in Dallas. Just saying.) All of these sites and stores are changing fashion dramatically. Some designers are digging in their heels and not dropping their prices. But others are adapting and giving consumers what they want. Shocking idea. Balenciaga has a new outlet at Woodbury Common, and Oscar de la Renta launched an outlet section on the company’s website. And though designers were furious about the steep markdowns at department stores late last year, consumers loved them. You can’t really argue with what the customer wants. So while consumers may not pay full price again, luxury can survive this economy. That is, if, like everything and everyone else right now, it learns to adapt. Welcome to Darwinism!!!
NY Magazine’s Daily Intel is hypothesizing that the mystery TARP wife is Liz Peek, wife of CITI Group’s Jeffrey Peek. I’m not trying to be hard on ‘TARP’ wife. In fact I think its sweet that she’s sticking with her TARP husband and all. There are perhaps a few ladies out there that would have jumped shipped on their significant other during this time period. Anyone who returns lavish birthday presents from her husband to save money and doesn’t share that burden of information with him to save his ego and emotions, has to be a good person. And while I released a flurry of sarcastic comments in the first paragraph, I do feel some empathy for this lady. Sure, she’s still living a life that even by her own admission is still wealthy but her life HAS changed and it is different from the life that she has known; thus her new life requires some adjustments that she is not used to.
It wasn’t long ago that America celebrated successful companies and the people who run them. My husband, CEO of one of the biggest TARP recipients, has received more than his share of accolades (in my opinion, well deserved). But because of a few tin-eared nitwits who failed to notice that their industry was under siege, the entire country now thinks that TARP bankers are greedy incompetents dedicated to ripping off taxpayers. “TARP Wife”
This is reminiscent of a ‘damned if you do, damned if you don’t situation’. And not matter what TARP wife says or does we will still bitterly criticize and judge the comments of this privileged woman who reaps the benefits of her Wall Street husbands riches. TARP wife should realize that there are repercussions to EVERYTHING. So yes, you live a plush life but you must understand that harsh judgment and less empathy are your bed mates. If the judgment and apathy one encounters with a plush life are too much of a nuisance I suppose you could always downgrade your income and supplement it with all the understanding a middle class income can give you.
"G"
The slide in the luxury goods market is set to continue for a bit longer. That’s the data to be gleaned from the semi-annual update to Bain’s “Luxury Goods Worldwide Market” study. The study shows that the luxury goods market will experience a 15-20 percent decline during the first two quarters of 2009 down from 170 billion euros in 2008 to about 153 billion euros this year.
But the study does see the proverbial light at the end of the tunnel. It predicts that the luxury market will start to even out in the second half of the year ending up with a net decline of 10 percent for 2009 overall. Like other studies, this one looks to China and the Middle East for signs of hope, seeing a projected growth of seven percent in China and two percent in the Middle East.
Overall all luxury shoppers are feeling more tentative and spending less. Luxury, however, remains a stratified industry with several different types of spending behavior. The lower tier of luxury consumers switching to less expensive brands and the more affluent luxury shoppers switching their focus to the intrinsic quality of materials.
via(Thrasherfunds)
"Just in case you guys did not know, the luxury goods sector is a great way to forecast a recover in the retail market thus signaling greater consumer confidence. Being the country will be getting back in its feet hopefully next year! So stay on your grind and pray"!!
"G"
This does not mean clothing stores will take over all the vacant ground-floor commercial real estate in the city, sadly. Just because there’s more, cheaper real estate doesn’t mean everyone’s not broke anymore. Stores have plans for the year of how many stores they’re going to open, and they’ll probably stick to those plans. Many stores are probably just looking to move to better locations.
So who knows how many of these deals will go through. Because no matter what the market’s like, looking for real estate in Manhattan is always basically the most difficult and loathed activity in the entire world.
I'm glad that I have been blessed to own some property in Manhattan, only because the value almost always goes up no matter what. Knowing that people are starting to spend helps people else where because if companies and investors are spending on real estate in Manhattan and finding deals, there are crazy deals available else where around the country. So if you have the cash on hand to invest this is the best time to because the values have pretty much bottomed out.
For some, the economic downturn means saying goodbye to that icon of American prosperity: their car.
“What am I cutting from my budget? Something sad … my car,” said college student Kyle Aevermann, who is trying to sell his Nissan Sentra.
Aevermann is having trouble finding a job and knows that selling his car will save him money in multiple ways. Not only will he no longer have a car payment, he won’t have to pay for gas, insurance or maintenance. He estimates that gas and insurance alone cost him around $3,000 a year.
“For a college student, that’s a lot of money,” he said.
Aevermann plans to use Zipcar, a short-term rental service, when he needs to drive, and to walk everywhere he can.
“Stores are only a mile away. I have legs. I can walk; I can ride my bike,” said Aevermann.Another person doing a lot of walking is Hilary Ohm. She’s cut her driving down as much as possible since losing her job in October. She no longer drives to work, of course, and since she lives in the small town of Colville, Washington, she’s able to walk to go shopping and meet up with friends.
She suggests that people who are looking to save money consider moving to an area where most stores and other destinations are within walking distance. “Think about how much gas you use each month. It adds up.”
“I haven’t filled my tank since the middle of December, and I still have about half a tank,” she added. It recently snowed in Colville, leaving her car covered in about a foot of snow, but Ohm says she could have just as soon left it that way until spring.
Many others are cutting smaller entertainment luxuries, such as restaurants, shopping, vacations and cable TV, out of their budget.
Matthew Colver and his wife love to travel — they generally go somewhere on vacation three or four times a year — but in the next year or so, they’ll be staying closer to home.
“My wife and I were talking about ways to cut back, and she said we take too many vacations. In fact, we’re getting on a plane to Hawaii tomorrow,” he said. “I like taking lots of vacations, but we’ve got a lot of bills, so that’s where we’re going to cut back. We don’t have as much money to spend.”
Colver says their 2009 vacations have already been planned and paid for, but in 2010, they’ll probably only plan one.
Johni Redd says she’s saving thousands of dollars a year by cutting premium features out of her cable and phone services. She still has cable and a cell phone, but has gone down to the basic level of service for both. She also got rid of her land phone line.
“I had way too many features on [the cell phone],” said Redd. “I had gotten into excess consumerism. And did I really need 150 channels that had nothing on them?”
Redd also moved closer to work to save on gas money. She estimates that her total savings from all these cutbacks will be close to $4,000 a year.
Gina Bock and Jill Pearson are saving by cutting back on all sorts of little luxuries, such as shopping and eating out.
“I don’t shop anymore … I really love to shop a lot, so that was the hardest,” said Bock, who lost her job three months ago. “My groceries are limited. I only buy bread, milk, cereal.”
“Cut backs have come in the form of many things, from not eating out nearly as much, to price checking at the grocery store, to no more nail salons or high-end hair salons,” said Pearson.
She and her husband own a construction company, and she says business has been slow. “Basically, we have cut back on things that are unnecessary. We used to just buy something if we wanted it, now we don’t. We have everything we basically need, so we are cutting back on the discretionary spending.”
Others tried to give up expensive luxuries, only to find that these luxuries had become essentials. Case in point: Robin Savage, who decided to give up something many in the Information Age cannot do without — her cell phone.
Fed up with hidden fees and high prices, Savage let a friend take over her Blackberry and service plan. The adjustment proved difficult. After only a few days without her phone, Savage said she was going through “complete torture.”“They say cigarettes are addictive, but I’m telling you, I think cell phones could be just as bad,” she said. “I’m actually losing sleep over it.”
In the end, the hundreds of dollars Savage said she would save turned out not to be worth it. After just five days without her phone — “the longest days of my life” — she gave in and got it back. She said an incident where she went to the wrong restaurant to meet up with friends and then couldn’t reach them was the last straw.
We knew Saks wasn’t doing well, but we didn’t expect them to lose $99 million in the fourth quarter. That brings the net losses for the year to $154.9 million. So most of the losses occurred over the holiday season when Saks aggressively marked down merchandise to get people to shop. The 70 percent off sales angered designers, including CFDA president Diane Von Furstenberg, who had no say in the markdowns and had to figure out how to get customers to pay full price for goods in freestanding stores when they were getting things at Saks practically for free. Saks chairman Stephen I. Sadove finally addressed rumors that the chain is nearing bankruptcy:
“Although it is policy not to comment on bankruptcy rumors, all of the actions [Saks is taking] are ensuring we are free cash flow positive in 2009. Bankruptcy would destroy shareholder value. Our intent is to insure and enhance shareholder value.”
So they intend not to go bankrupt. Who knew? Sadove also addressed the obscene 70 percent off sales. He said they had no choice because they had to reduce inventory, and they feel good about the results. WWD reports:
“In hindsight, I think we had to be more promotional,” Sadove said. “We bought these products nine months in advance when we were growing double digits. We didn’t jump the competition. We made the decision we would follow, but we would be much more aggressive once we followed.”
He added that he thought they could have “gotten away with” marking shoes and handbags 55 to 60 percent off instead of 70. Saks also contends that relationships with designers remain good, and now that inventories are down, Saks doesn’t expect to have to discount as deeply in the coming year.
Although they lost $99 million in the fourth quarter and laid off 1,100 employees, Saks is working on opening an upscale men’s store in Palm Beach (to replace an old one) and spending “tens of millions” of dollars to renovate the third floor of the Fifth Avenue flagship. This is meant to, as WWD puts it, “underscore its continuing stake in luxury.” Tens of millions on one floor of one store. And they’re $155 million in the hole.
via(WWD)
Retail Giant Macy’s will be laying off an additional 7,000 people soon. This news comes right on the heals of Macy’s recent closure of 11 stores last month as well. 5,100 hundred of the most current lay offs will affect store employees and the remaining number of layoffs will affect the corporate employees who will have the suffer with the confusion of coporate operations becoming centralized in an effort to reduce cost in the midst of an increasingly difficult retail sales quarter.
To add further to Macy’s economic troubles, the projected earnings for the fiscal year are well below what analysts even hypothesized at the beginning of the year.
It should be noted that same-store sales fell 7.5 percent during the combined November and December holiday period. Macy’s said the holiday season ended with improving sales in the fourth and fifth weeks of December but that sales were sluggish before that.
Employees who are laid off will be given the opportunity to apply for new jobs currently open in the economy. However, when a company encounters heavy reorganization within its structure - and has to cut back on previously planned expenses; I’m not so sure if these current openings within the company will actually be filled.
First Jim Cramer (host Mad Money on CNBC) then JP (Thrasher Capital) and now Me, all agree that McDonald's is going pretty strong in this declining market.While most business are closing stores and laying off employees, McDonald's will be opening 1,000 new stores this year. Even though McDonald’s fell short of Wall Street’s expectations, they posted stellar quarter profit earnings this Monday.
I guess the low priced value of the dollar menu has been a beacon of light to many consumers in this dark period.
I find this interesting that despite high unemployment rates and a recession causing the US poulation to tighten their belts, people are still spending money eating out.
Man, we could all use some more of this right now. With people losing their jobs and banks begging for TARP money what is there for the American consumer to do. With the Credit Market all but dried up and the housing market damn near gone how do people safe guard our money? I have the answer, we save and invest in the market. I have been studying the Financial Markets for awhile now and things will get better. I am blessed to have a few ventures going so I have money to invest and I know where to put it. But for the rest of you Gen Yer's and some older people in Gen X I will introduce to you Thrasher Capital "Where Making Money Never Goes Out of Style". The people over there are financial mavens and I trust them with some of my money. I will have video from them weekly that will help everyone understand money and how what happens in culture, fashion, music and politics affects our money.
