Stores selling so-called affordable luxury to aspirational buyers are starting to feel the pinch of the weak economy. Only the most elite brands--and the retailers catering to the richest
customers--are likely to escape the current economic climate unscathed.
The outlook is very different from the recent years, when sales of all sorts of luxury goods exploded, boosted by a
rising stock market and strong fashion trends that spurred purchases. The boom led marketers to broaden their target audience from the super-wealthy to include the growing ranks of upper-middle-class
consumers.
Wall Street is concerned. Nordstrom's share price has fallen more than 35% in the past three months, while Coach is down nearly 30%; Saks Inc. is down about 4%, and Polo is down
around 19%. Some brands may soon retreat from the affordable-luxury strategy and begin emphasizing their more elite or customized products as a way to reach the wealthier consumers, predicts Pat
Conroy, a managing principal of the consumer business at Deloitte & Touche USA.
advertisement
advertisement
Read the whole story at The Wall Street Journal »