See Why Luxury Retailers Are Thriving
Despite the uncertain economy, increased cost of input materials like gas and cotton, high unemployment rates and inclement weather, luxury retailers had a very profitable May. While Wal-Mart (NYSE:WMT) has watched sales decline for eight consecutive quarters, Tiffany & Co. (NYSE:TIF), Saks Fifth Avenue (NYSE:SKS), Neiman Marcus, and Nordstrom (NYSE:JWN) all reported increased sales last month.
And it’s not necessarily that luxury retail (NYSE:XRT) customers are immune to the effects of recession, only that they have little tolerance for it, according to Marshal Cohen, chief industry analyst at market researcher NPD Group. “The consumer who was used to spending went through withdrawal by not shopping, and now they need stuff again.”
Tiffany’s sales were up a whopping 26% in their first quarter, Nordstrom (NYSE:JWN) up 7.4%, Saks stores open at least a year saw sales up 20.2%, and Neiman Marcus sales were up 12%, with all of these retailers showing earnings higher than analysts predicted. “Luxury is always the last to be affected going into a recession and it’s almost the first to come out of a recession,” said Cohen. “The distractions of high gas, food and clothing prices mostly impacts consumers who live paycheck-to-paycheck.”
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