Now the rich are tightening belts

http://www.thenewstribune.com/2012/05/27/2159434/now-the-rich-are-tightening-belts.html

WASHINGTON — The U.S. luxury sector, a bright spot in retailing for the past two years, is struggling to maintain momentum as shock waves from Europe’s sovereign debt crisis spread across the Atlantic.
U.S. luxury sales, excluding jewelry, climbed 1.8 percent in April from a year earlier, after gaining 6.7 percent in the first quarter and 13 percent in the fourth quarter, according to MasterCard Advisors SpendingPulse, which tracks retail sales in all payment forms. The pullback has slammed Tiffany, the world’s second-largest luxury jewelry retailer, which Thursday cut its profit and sales forecasts. The question is whether the pain will deepen in other parts of the luxury sector, putting pressure on the bag and shoe sellers such as Saks, Neiman Marcus and Coach.
“For the luxury industry, ’08 and ’09 were the years of the crash, ’10 and ’11 were the years of the recovery, and ’12 is the year that may give luxury consumers pause,” said David Schick, an analyst with Stifel Nicolaus in Baltimore. “Luxury doesn’t outperform the broader economy forever. It never has.”
Tiffany fell 6.8 percent to $57.59 in New York, the biggest decline in more than four months. Coach climbed 0.3 percent to $69.27, and Saks retreated 0.8 percent to $10.26. Tiffany has slid 13 percent this year.

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