High-end retail hit by downturn
A Williams-Sonoma store on Michigan Avenue in Chicago.
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Kai Ryssdal: Williams-Sonoma jumped out of the frying pan and into the fire today. The high-end gourmet cooking and housewares chain reported a 42 percent drop in first quarter profits. It also said the rest of the year not looking so hot either.
Given the problems with real estate, it kind of makes sense that fewer are people buying things for homes they're not buying, but check the calendar for a second. June, right? Smack in the sweet spot for weddings -- and for wedding gifts.
Stacey Vanek-Smith reports now on why the season isn't registering.
Stacey Vanek-Smith: That stainless steel paella pan and porcelain souffle dish were must-haves in 2007 when Williams-Sonoma profits were in the double digits, but that was before the gravy train stopped running. Williams-Sonoma expects sales to drop about 10 percent in the next few months.
Burt Flickinger: This is the first time the high end's being hit in 75 years.
Retail consultant Burt Flickinger says normally economic downturns don't affect luxury retailers as much as lower-end stores, because people still want to splurge. But he says this time, things are different.
Flickinger: Right now, U.S. consumers are looking for the biggest bargains. There's a record amount of consumer coupon usage, luxury retail is really starting to struggle and the retail recession is just starting to hit.
Not to mention the wedding recession…. The 69 billion dollar nuptial industry is a huge chunk of Williams-Sonoma's business and Flickinger says retailers are seeing fewer wedding guests on registries and cheaper gifts... or different gifts.
30-year-old Erin Larson is getting married this summer. She and her fiance have a honeymoon registry. Larson says with the dollar sliding, it will help them live it up in Europe.
Erin Larson: And it means so much more to us to get the present of sunset cocktails on San Turini rather than a blender.
A lot of couples feel that way, says Anja Winikka, editor of theknot.com. She says department stores, cookware outlets and other traditional wedding gift retailers are having to fight everyone from charities to spas for the bridal buck.
Anja Winikka: They're registering for their lifestyles, so if they're really outdoorsy people, they make look to an outdoorsy sort of... REI. They may register at Home Depot...
Winikka says the top dream destination for brides is Italy and with the down economy, more brides may opt for a cappuccino in the Piazza del San Marco over the cappuccino maker back home.
I'm Stacey Vanek-Smith for Marketplace.