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Rich People Feel Comfortable Buying Fancy Clothes Again

Not long ago, the rich abandoned shopping for luxury goods because they didn't want to seem flashy in the terrible economy, when average- and low-income folk were struggling to pay for anything at all. It was like losing five pounds: You don't really need to, but it would be nice. But now that they've put in a couple of years of good behavior — you know, laying off the $800 Louboutins, denying themselves the $1,300 Crème de la Mer skin cream — they're ready to buy that Yves St. Laurent bag in two colors, and get on the waiting list for a $9,000, sequined Chanel tweed coat. So much for all that self-restraint: They've yo-yoed so far in the other direction that stores are even able to jack up prices on many items by a couple hundred bucks. The rich just think the higher the price tag, the more worth it the item must be.

Luxury retailers like Saks, Bergdorf Goodman, and Neiman Marcus are thrilled with all the full-price spending. Meanwhile, stores that cater to average people can barely raise prices by pennies, out of fear of losing customers. From the Times:

Wal-Mart is selling smaller packages because some shoppers do not have enough cash on hand to afford multipacks of toilet paper.

That's the grim reality for much of America. But economists warn them not to begrudge the rich.

“This group is key because the top 5 percent of income earners accounts for about one-third of spending, and the top 20 percent accounts for close to 60 percent of spending,” said Mark Zandi, chief economist of Moody’s Analytics. “That was key to why we suffered such a bad recession — their spending fell very sharply.”

So let them spend and be merry! It's the yuppies who will take the hardest hit because of it, when they can't afford Prada wedges because they're not going on sale, and they have to move because their rent will go up $500 a month. At least there's always last season's shoes. And Brooklyn.

Even Marked Up, Luxury Goods Fly Off Shelves [NYT]

Photo: iStockphoto

Copyright © 2013, New York Media LLC. All Rights Reserved. The Cut® are registered trademarks of New York Media LLC.

Copyright © 2013, New York Media LLC.
All Rights Reserved.

Copyright © 2013, New York Media LLC. All Rights Reserved.


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