As an estimated twenty percent of the US population are still unemployed or working part-time, the
recession is still a reality for many of us. Most of us are still looking for the best bargains and being frugal with our dining expenses. So it was a bit of a surprise when we heard that despite the economic state, the luxury market is actually doing better than expected.
Richard Hastings, retail strategist at Global Hunter Securities,
estimates that about half of the 80% of Americans fully employed are
not affected by the economic state. As they are less concerned about the
stability of their jobs, many have begun to comfortably open up their wallets. And it's not just casual spending, we're talking about a return to high-end luxury goods.
Retail companies from all angles have reported sale increases. Tracey Travis, chief financial officer of Polo Ralph Lauren, states that he has "begun to see the gradual return of our core luxury customer," including buyers of their $4,000 couture dresses. Representatives of the Louis Vuitton Las Vegas boutique, which just opened last December, announced that sales were 50 percent higher than their predicted forecast. Prada's retail sales rose more than 14 percent and expressed hopeful prospects for the coming months. Abercrombie & Fitch recently reported an 8% sales increase, its first monthly increase for the last 20 months. In addition, the top department store chains, Neiman Marcus, Saks, Nordstrom, and
Bloomgdales all report an increase sales growth. Neiman Marcus also
noted that their strongest categories were women's couture clothing and
precious jewelry. And consumers are also shopping online. Online
fashion retailer Yoox reported this week a 50 percent rise in their 2009
sales, claiming all markets, include Europe, North America, and Japan had strong
sales. And just last month, ASOS, Yoox's rival online retailer, stated a 30 percent sales increase in the five weeks to January 3.
Despite the sales reports, in times like these, we can't help but to have some skepticism about this new confidence of such an optimistic outlook. What has suddenly urged people to spend so lavishly? And is it naive to say that this is going to gradually increase? But nonetheless, we would love to be proven wrong and hope that recovery may be faster than expected.