US Retailers Say Big Spenders are Back

Source : footwear news

MILAN (July 5, 2004) - (Reuters) - The big spenders are back. As the economy picks up and confidence returns, the U.S. luxury goods business is sprinting out of a three-year slump with a vengeance, retailers said at Milan fashion week.

"Business is spectacular right now. We've sold more alligator shoes so far in 2004 than in 2000-2003 combined," said Karen Katz, chief executive of U.S retailer Neiman Marcus.

According to a study by Italian luxury body Altagamma, sales of upmarket goods in the United States grew 27.7 percent in the first five months of this year and although most people expect that rate to tail off, growth is seen staying strong.

"At the high end, what has determined spending habits is the stock market. And right now, a lot of wealthy people are getting wealthier," said Bergdorf Goodman CEO James Gold, forecasting sales would put in "strong double digit" growth this year.

QUALITY IS KEY

Luxury players agreed that the 21st century customer would not be tricked into spending money for the sake of it and that fashion houses should follow the brands that kept up sales in the wallet-lock days by innovating and keeping up quality.

Prada, which made black nylon backpacks a 1990s must-have, blazed a growth trail in the turbulent new century by playing with patterns. Louis Vuitton stayed ahead by lightening the mood and painting its trademark LV logo in bright colours.

"The challenge is to appeal both to the old baby boomers who have huge disposable incomes and 20-something bankers or rappers who are making a lot of money and want to spend it," he added.