[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 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"
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.
Just in case some of you like Liz Claiborn, there is some bad news and big trouble ahead for them. The retail giant Liz Claiborne published their fourth-quarter reports and released numbers that reported a 828.9 million dollars net loss. This net lost was increased sharply as the retailer took $693 million in write-downs and its revenue fell 22%. Chief Executive Officer of Claiborne, William McComb called the quarter “the most challenging environment the company has experienced in decades.”
The fashion company posted a net loss of $828.9 million, or $8.85 a share, compared with a loss of $435.7 million, or $4.55 a share, a year earlier, when results also included write-downs. Excluding those and other items, Liz Claiborne would have posted a loss of four cents a share, compared with earnings of 20 cents a share a year earlier.
The U.S. economy continued to hemorrhage jobs in February, bringing total job losses over the last six months to more than 3.3 million, and taking the unemployment rate to its highest level in 25 years.
The government reported Friday that employers slashed 651,000 jobs in February, down from a revised loss of 655,000 jobs in January. December’s loss was also revised higher to a loss of 681,000 jobs, a 59-year high for losses in one month.
Economists surveyed by Briefing.com had forecast a loss of 650,000 jobs in February.
The unemployment rate rose to 8.1% from 7.6% in January. It was the highest unemployment reading since December 1983. The survey of households found 12.5 million people are now unemployed, the highest since records started being kept in 1940.
With all of this happening we all have to work hard and add new skills so we can leverage that against the current and future market.
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)
Once upon a time, say about a decade ago, Milan was jammed with American tourists whose mighty dollar earned them bargain basement deals on luxury goods against Italy’s puny lira and, later, against the euro in its slumbering infancy. The Americans were easy to spot as they conspicuously swung Tod’s and Gucci shopping bags along Via della Spiga and Via Montenapoleone and jabbered away in their alien tones.
Now it would be difficult to find an American shopper in Milan’s luxury quadrilateral, apart from the four times each year when fashion shows lure editors and buyers from their desks in New York. The dollar, limping sadly since 2003, and the recent economic crisis, have all but eliminated their presence. Also dwindling noticeably are the Japanese, who once seemed poised to take over the world, one Prada store at a time.
Who’s buying, then? One need not look further than the airport office where tourists submit their receipts for a tax refund before heading home. This data, tracked by the company Global Refund, gives a snapshot of who bought how much: Russians are Milan’s largest national group of fashion shoppers, commanding 38 percent of the tax-free pie in 2008, despite their own economic woes back home. By contrast, the United States claimed a mere 4 percent.Ukrainians make up 6 percent of Milan tax-free fashion sales and bear the distinction of being the biggest spenders per purchase: Their average receipt is €1,556 compared with €968 for Russian buyers, €925 for U.S. buyers and €789 for China buyers. But when the statistics are pared down to just jewelry, the Ukrainian average receipt is an impressive €12,000.
Russians, Arabs, Ukrainians and Chinese all posted healthy increases in fashion purchases in 2008 versus 2007. And, not surprisingly, the two countries that took nose dives were the United States and Japan - dropping by 38 percent and 24 percent, respectively.
Over all, Milan’s tax-free shopping increased 2 percent in 2008, despite the effects of the global economic crisis that deepened in the fourth quarter of the year.
Milan is by no means immune to the downturn, although the city’s stores are not resorting to the drastic discounting seen in New York and London.
Just before Christmas, the streets of Milan were blanketed with snow instead of shoppers, and it seemed that the locals were on a holiday fashion detox. There were, however a few notable exceptions, including the storefronts of Tiffany, Moncler and Hogan, all of which were swarmed with unusually high numbers of people. “Hogan has been a total phenomenon,” remarked Della Valle. “It’s a product that is really working well right now.”
Perhaps that is because, like Tiffany and Moncler, Hogan has a cachet name that is affordable. And those €300 rubber sole lace-ups (not to mention a fox-trimmed Moncler puffa jacket) sure come in handy when the streets are slick with slush. According to Della Valle, Italians are still buying but the days of frivolous spending are over. “Now they’re more attentive,” he said. “They’re looking at the product with different eyes.”
The Russians, it seems, also have a new viewpoint. A Fendi saleswoman said they are still big customers and display a continued appetite for big-time furs. “But they’re not dropping €150,000 on a sable like they used to,” she said. “Now it’s usually just a fox for around €70,000.”
