February 29, 2016
Upscale Shops Hit a Gold Vein as Economy Spurs Big Spenders
– The Commercial Appeal –
With this year’s strong economy and climbing stock market, big spenders are out in force this holiday season.
That’s pleasing upscale retailers who attract the more affluent shoppers.
"The upscale lines are really driving our business," said Bill Levy, president of Oak Hall, located in The Regalia shopping center on Poplar Avenue.
"Our sales were up 15 percent in November. And we are expecting December to be as good. People want personalized service, quality merchandise and are willing to pay a little more for merchandise that lasts longer."
Not since the 1980s, when shoppers fawned over fancy cars and pricey jewelry, has high-end merchandise been in such demand.
"The economy is good and people are in the holiday spirit," said Elizabeth Galfsky, owner of Elizabeth Edwards, a women’s boutique that specializes in St. John knits. A short skirt alone goes for about $230. Add a matching top for $360.
"We’re selling a lot of these to husbands to give to their wives for Christmas," Galfsky said. "We’re having a fabulous Christmas."
Some of the most popular and pricey Christmas gifts at Oak Hall this year are the Hermes of Paris ties and scarves that range from $120 to $185, cashmere coats that go for between $1,000 and $1,700, and $125 alligator skin belts.
"We’ve also been selling 150 to 200 pair of Ballin microfiber ($125) slacks a month and we’ll probably sell more than that during Christmas," Levy said.
Around the country, retailers such as Cartier in New York can’t stock enough Tank Francaise watches, which begin at $2,300 and go as high as $66,500. Neiman Marcus is selling lots of Daniel Hanson cashmere robes for $1,088 and David Yurman Silver Ice rings beginning at $750.
"There is a gold rush fever in this country," said Alan Millstein, editor and publisher of the Fashion Network Report. "There’s a lust for luxury products that borders on the obscene."
Carol Schwartz of New York has a holiday gift list fit for a king. "My daughter wants a Gucci bag, my husband wants a fancy humidor for cigars," said Schwartz, while strolling along Fifth Avenue. "I’m asking Santa for a Judith Leiber bag."
And what does she plan to spend on these gifts? "Around $6,000, maybe even more," she said with a smirk.
Anything with a Gucci, Prada or Chanel label is flying off shelves, especially handbags and other accessories.
"In the early 1990s, you hid your wealth," Millstein said. "Now, everyone wants their friends and neighbors to know that they’ve hit the jackpot."
Tony retailers began their comeback last year after a mostly quiet decade. The stock market collapse in 1987 and the recession that followed prompted shoppers to watch their spending.
Retailers report many shoppers are even more extravagant this year. They’ve been buoyed by the surging stock market, where the Dow Jones industrial average, despite several big setbacks, has risen more than 20 percent this year.
"There’s been an absolute pickup in our most premier products," said Lew Frankfort, chairman and chief executive of Coach, the leather goods manufacturer.
At the Aaron Faber Gallery on Fifth Avenue in midtown Manhattan, platinum, diamonds and fine watches are among the top sellers this Christmas. One customer paid nearly $160,000 for the Petek Phillipe Reference 5004, a perpetual mechanical calendar.
Owner Edward Faber said his customers buy gifts for others and for themselves; and most are looking for top quality, that is, they are willing to spend more if they feel it will last.
"Many feel that they’ve made money in the market and this is their reward," he said.
However, there are still those who can afford to be extravagant, but choose not to.
"I will probably buy less this year because we don’t need anything," said Bonnie Given, a regular customer at Oak Hall. "The things we buy will probably be frivolous services, such as a massage, manicure, facial. The needs just aren’t there and you run out of ideas."
Her son, a student at the University of Memphis, has only one thing on his Christmas list – a new Toyota 4Runner ($25,000 to $35,000). Whether Santa is feeling that generous has yet to be determined, Given said.
Besides the quality of merchandise, shopping environment and a knowledgeable sales staff draw affluent customers to upscale shops such as Only Kids, also located inside The Regalia. The store carries toys, books, clothing and other upper-end gifts and accessories for infants and children.
"I come here because I’m more concerned about getting the most quality and most creative," said Ruth Francis of Memphis, while shopping for presents for her grandchildren. "To spend less, I guess I could go to a barn (Toys R Us or Target), and walk up and down 17 rows and never be able to find a salesperson to help you find the perfect gift for an 8 year old girl."
"But at places like this you have knowledgeable sales people who can make intelligent suggestions."