Sarah Gardner: A sales warning today from British luxury-brand Burberry — y’know, those expensive beige-and-red-plaid handbags and overcoats. Even in the recession, wealthy consumers from the U.S., Europe and Asia have helped keep high-end retailers like Burberry and Gucci in the black.
Now, one label’s warning does not a luxury sales crisis make. But there may be cause for wider anxiety, as Marketplace’s Mitchell Hartman reports.
Mitchell Hartman: I’m a hat guy — just bought a classic Stetson fedora — for $48.
But what I really have my eye on:
Louise Marriage: Borsalino — is probably going to run about $375.
Hartman: Wow, and you’re still selling some of them?
Marriage: We are still selling some of them.
Louise Marriage is the manager of Helmer haberdashers in downtown Portland.
Marriage: Certainly not the same as we were, like, probably 10 years ago. But there are those that that is what they want.
n fact, the wealth of the wealthy has been surprisingly resilient through the recession, says NYU economist Ed Wolff.
Ed Wolff: They did suffer about a 14 percent decline in their net worth. But the middle class suffered about a 48 percent decline. Moving forward to 2012, it’s very likely the rich have recovered to where they were.
And this has been reflected in their high-end luxury spending. Retail analyst Patty Edwards say the trouble for brands like Burberry isn’t primarily from wealthy U.S. buyers.
Patty Edwards: The companies that are reporting softer sales have been relying on overseas growth.
China’s economy has slowed, and its upper-class tourists may not be filling their new Burberry bags with as much stuff from Saks Fifth Avenue.
Edwards thinks if American luxury consumers are holding back, it’s about politics, not home — or should I say, ‘mansion’-economics.
Edwards: Things like Occupy Wall Street make it less OK to be carrying the high-end bags.
Ed Wolff says if Americans do reduce conspicuous consumption, it could dampen economic growth.
I’m Mitchell Hartman for Marketplace.