High-end shoppers have yet to buy in to turnaround
NEW YORK – It may be too early to call a turnaround in the luxury-retail sector.
Despite expectations that high-end shoppers are gradually coming back to stores and with retailers such as Macy’s Inc. and Saks Inc. indicating some improvement, the latest data suggest that the battered sector may need to do more to prove this pickup in momentum can be sustained.
Sales in the luxury sector declined 7.3 percent in November, their first drop since August after gains in September and October, according to MasterCard Advisors SpendingPulse, which estimates U.S. retail sales across all payment forms including cash and check. The figure may have been distorted by the warmer start to the winter season in areas such as the Northeast, tamping down demand for heavier-weight apparel, MasterCard said.
“The (luxury) recovery may not have found sure footing,” said Kamalesh Rao, director of economic research for the SpendingPulse report. In an interview, he noted that Black Friday’s sales trends paled against last year’s levels, when stores instituted discounts of more than 70 percent off to attract shoppers heading into the holiday season. “The season is still up for grabs.”
Separately, a monthly survey released Wednesday by credit-card issuer Discover Financial Services showed high net-worth individuals, or those with income of $75,000 or above, had the biggest decline in economic confidence in November. The upscale shoppers’ sentiment had been improving gradually the previous six months before the Labor Department data showed the unemployment rate inched up to 10.2 percent, said Discover spokesman Matt Towson.
About 57 percent of luxury shoppers indicated in November that they plan to spend less on holiday gifts this year. That was up slightly from 56 percent in October, the Discover survey showed.