Challenges ahead for luxury retailers

New York /
Oct.October 06, 2011 03:59 PM

Retail leasing activity may be up on Madison and Fifth avenues, Retail Traffic reported, with more chains signing deals, but it hasn’t all been good news for retail.

At the end of July, the national Luxury Consumption Index, tracked by Pennsylavia-based Unity Marketing, fell 16.8 points to 66.0 points, registering the biggest drop since the beginning of the recession, as affluent consumers registered the fluctuation in the stock market and began to spend less on luxury goods.

“Our surveys tend to be a little ahead of what’s going on with luxury companies and what we saw in the middle of the year was a sharp and steep decline in the confidence level of luxury consumers,” said Pam Danziger, president of Unity. “These people are expressing a whole lot of concern about what’s going on and they are not going to risk their lifestyle to buy another bag or pair of shoes. That’s the kind of wave we see forming right now for the coming Christmas season.”

Howard Davidowitz, chairman of Davidowitz & Associates Inc., a New York City-based retail consulting and investment banking firm, says retailers are better-prepared to weather the downturn than they were when the recession hit.

Luxury chains “are not putting the money into full line luxury stores. Their money is going to online sales and outlet centers because those look like growth sectors,” Davidowitz said. “It sort of leads me to believe that they are thinking they better protect themselves; maybe the party is not here forever, and it will help them tremendously to have a growth vehicle.” [Retail Traffic]


Related Articles

arrow_forward_ios
Joseph Chetrit with 427 and 459 (left) Broadway (Getty, Beyond My Ken/Wikimedia)
Chetrit Group falls behind on Soho portfolio mortgage
Chetrit Group falls behind on Soho portfolio mortgage
Nearly half of new shops in 2021 will be dollar stores. (Getty)
2021 is raining dollar stores
2021 is raining dollar stores
National chains and mom-and-pop stores are seeing increasing sales per square foot and shrinking occupancy costs (Getty)
National chains paid 93% of rent in April
National chains paid 93% of rent in April
(RIPCO, iStock)
Target, Five Below, Smashburger open in new Brooklyn shopping center
Target, Five Below, Smashburger open in new Brooklyn shopping center
(iStock)
Job recovery sputters, but hospitality & leisure add hiring
Job recovery sputters, but hospitality & leisure add hiring
Jeff Sutton and 25 West 34th St. (Wharton Properties, Google Maps)
Jeff Sutton will replace Midtown retail space with hotel
Jeff Sutton will replace Midtown retail space with hotel
New York’s medical marijuana industry is expecting a boom in business. (Getty)
Medical marijuana company bags Long Island grow site
Medical marijuana company bags Long Island grow site
Hong Kong rent has toppled over in the past year. (Getty)
Rents declined on most Asia-Pacific retail strips last year
Rents declined on most Asia-Pacific retail strips last year
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...