Back in February, we visited Tiffany’s Manhattan flagship and the jewelry chain’s new branch in the Financial District to see if the luxury retail market had started showing signs of an impending bust. Traffic seemed a little light then, but it appeared like sales could just as easily rebound in 2008 as plummet.
As anyone who has picked up a newspaper in the past few months can surely attest, retail is reeling from a drop in consumer spending and “entry-level luxury goods have been hit especially hard,” the Wall Street Journal reports today. The “accessible luxury” lines unrolled by midrange retailers like Banana Republic and Ann Taylor aimed at middle-class shoppers (with incomes of under $250,000) have landed with a big thud. Some chains are delaying or scaling back their high-end plans, or canceling them altogether.
The belt-tightening of “aspirational consumers” does not bode well for the profits of chain-retailers, but there are more bargains out there for consumers willing to spend. The Journal reported that to move high-end merchandise some retailers have been forced to slash prices.