"Carriage Trade" department stores hurting: $2,000 Dolce&Gabbana bags 60 percent off!

[marmar]

from Bloomberg:




Saks Tailspin Indicates Hurdles for Neiman, Nordstrom (Update1)

By Cotten Timberlake

July 8 (Bloomberg) -- Neither Mary Beth Gonzalez nor Saks Inc. could be happy about the 60 percent discount that the company's Fifth Avenue store in New York was offering last week on such luxury items as a $1,995 Dolce & Gabbana messenger bag.

The reduced prices are eroding Saks's profitability, with its operating margin shrinking from 5.3 percent in the fourth quarter to 4.7 percent in the first -- less than half of margins at Nordstrom Inc. and Neiman Marcus Group Inc. The cuts also aren't sufficient to get Gonzalez, a media executive, to buy.

``I'm being more conscious of my spending,'' said Gonzalez, 42, who left the store empty-handed July 2 and resolved to cut non-essential purchases in half. ``With the economy being uncertain, I feel like I need to have more savings.''

One of the last holdouts in consumer spending --luxury- goods purchases -- may be collapsing under the weight of a sluggish and potentially contracting U.S. economy.

Sales at U.S. luxury stores open at least a year may decline as much as 2 percent in 2008, as wealthy consumers suffer ``angst'' over financial-industry job cuts and falling stock and housing values, Michael Niemira, chief economist at the International Council of Shopping Centers, projected July 1 for Bloomberg News. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601213&sid=an6p.Z6OzXXA&refer=home

[hobbit709]

1. For $1995 that bag had better

1. Get me off several times a day
2. Get my work done for me.

[hlthe2b]

2. Years ago I used to have an "addiction" to hand bags....BUT

I have NEVER in my life paid more than $125 for one and that was a classic fine leather design bag that I still use. They lost me when the fad-driven bags with designer names and more cheap-ass looking plastic, gaudy vinyl or metallic hardware started showing up on every bag... Screw it.... And anyone that would spend $2k on a bag like that, deserves what they are getting, IMO.

[Monk06]

3. Does that mean Mrs Guilliani gets 40% off the airfare for extra seat she needs for her DC bag?