U.S. Shoppers Splash Out On Luxury

More prosperous American shoppers seem to be defying continuing high unemployment levels and economic uncertainty to renew their spending on luxuries such as jewellery, fashion and cosmetics.

That is the picture emerging from the current round of US earnings and sales reports.

Fabrizio Freda, chief executive of Estée Lauder, has said that sales of its beauty products at “prestige” stores – such as traditional department stores – had grown faster than at “mass” drugstores and discounters during November and December, reversing the trend seen earlier in the year.

“We view this as a return of the aspirational consumer,” he said.

Sales of cognac in the US had jumped 19 per cent by volume during the fourth quarter compared with the same period last year, according to BNIC, France’s trade association of cognac makers.

Last week’s January sales figures from leading US chain stores reinforced the picture of growing readiness to spend, with Neiman Marcus, Saks, ­Nordstrom and Bloomingdale’s – the top upmarket US department stores – reporting strong sales growth, albeit from the depressed levels of a year ago.

Neiman Marcus, which operates about 43 luxury fashion stores serving the most affluent US consumers, said that its strongest categories included women’s couture clothing and precious jewellery.

Abercrombie & Fitch, the youth retailer known for its $60 polo shirts, reported that comparable sales had risen 8 per cent, its first monthly increase for 20 months, in spite of teenage unemployment running at about 26 per cent.

The evidence of greater readiness to spend comes in spite of continuing high unemployment, with about 20 per cent of the US population unemployed or working casually or part time.

More at    http://www.ft.com/cms/s/0/0cfbe50c-1420-11df-8847-00144feab49a.html