Luxury sales shine in holiday season
Justine Griffin/Sarasota Herald-Tribune
Jewelry, cars, high-end clothing, trendy electronics and other expensive merchandise showed heightened demand from consumers again this holiday shopping season, as luxury items continued to outpace the rest of the retail sector.
Luxury sales as a whole improved significantly last year and have continued to show growth in 2012, experts said, after a series of recession-inspired disappointing Christmas seasons.
Although the small segment of luxury shoppers did not appear to be spending quite as they had in 2007 and before, sales of upscale items have bounced back remarkably, said Jeff Green, a retail analyst with Phoenix-based Jeff Green Partners.
“The 10 percent of shoppers who can afford luxury items are coming through very strong this holiday season,” Green said.
The high-end gifts also have come from unlikely retailers.
Starbucks, for instance, sold out of its limited-edition, stainless steel gift card in minutes, despite a $450 pricetag. For that amount, buyers received $400 worth of Starbucks merchandise and a gold-level Starbucks membership.
Only 5,000 of the cards were made, and all sold out on Dec. 6, the first day they went on sale at exclusive luxury goods website Gilt.com. Some remaining cards offered to the general public sold out the following day.
“The value in something like the Starbucks Metal Card isn’t the price, but the status,” Green said.
More than 20 percent of shoppers say they purchased jewelry as gifts this year, up from the 15 percent of shoppers who bought gold or other precious metals in 2011, according to the National Retail Federation. In 2010, about 14 percent of shoppers purchased jewelry around the holidays.
“Jewelry retailers are doing very well this year, both online and in stores,” said John Fleming, a spokesman for the Florida Retail Federation.
“That industry is the most recession-proof and the more affluent households are proving to be more resilient,” he added.
At Tiffany & Co., the standard-bearer for luxury jewelry, sales were up 4 percent in the three-month period ended Oct. 31, giving the tony merchant hope leading into the holidays that sales will be strong once again.
In 2011, sales during the final quarter of the year that included the holidays rose 11 percent vs. 2010, according to Tiffany data.
But upscale sales have not been limited to fancy bling or smaller items.
Auto sales have also maintained a brisk pace that began last year. New cars sales are up about 12 percent so far this year in the three-county Southwest Florida region, as compared to roughly 13 percent nationally.
Nationwide in 2011, luxury sales have grown over a 10-month period compared to 2010, according to research from MasterCard Advisors SpendingPulse.
But that has not stopped even luxury purveyors from offering deals to lure customers who might be on the fence about buying high-end items.
Apparel stores such as Saks Fifth Avenue have begun offering sales of up to 70 percent on men’s outerwear, handbags and other items to entice shoppers. The chain is hoping those customers will, in turn, buy regularly-priced merchandise.
But the sale of luxury goods overall has been tempered by shoppers who are more informed than ever before, thanks to better technology and social media such as Twitter and Facebook.
Roughly half of all shoppers buying big-ticket items, for example, look for discounts and 36 percent price compared before buying, the NRF said.
“People haven’t been shopping around like they used to, so there’s been a pent-up interest in nicer merchandise,” said Michael O’Hara, chief executive officer for online retailer Yumani.
“It’s become a higher percentage of the mix than we anticipated this year,” he added.
O’Hara said high-end brands like Apple are driving sales because of the “status” that comes along with their products. Tablet computers and other expensive consumer electronics, moreover, seem to be pushing the retail sector as whole this year, O’Hara said.
Even so, shoppers have also flocked to upscale, boutique apparel stores such as Eileen Fisher and Brooks Brothers, both of which have downtown Sarasota locations.
Overall, apparel sales are up this year, despite varying weather conditions in many parts of the country. Fifty-three percent of shoppers are buying clothes as gifts this year, up from 44 percent in 2011, NFR data shows.
Retail sales overall rose 4.3 percent last week, the highest point so far in December, according to a weekly chain store sales report from the International Council of Shopping Centers, a trade group.
Sales surged after weeks of dips following Black Friday, a routine lull that retailers are used to seeing before mid-December, said Michael Niemira, the group’s chief economist.