I'm not surprised. clo
Saks, Nordstrom Say Luxury Sales Firm
By Cotten Timberlake - Sep 7, 2011 1:07 PM ET .
So far so good in the luxury sector, say top executives of Saks Inc. (SKS) and Nordstrom Inc. (JWN), as stock markets lurch up and down amid global economic uncertainty.
Saks Chief Executive Officer Stephen Sadove and Nordstrom Chief Financial Officer Michael Koppel say sales at their luxury chains are holding up and that they are sticking to their forecasts. They made their comments at a Goldman Sachs Group Inc. conference in New York today.
The stock markets have dropped less in recent months than they did in 2008, the executives said. The current sales stability contrasts with the revenue freefall that crushed luxury retailers in the autumn of 2008.
“We do not see the high-end consumer falling apart,” Sadove, 60, said today. Saks’ most expensive items are selling particularly briskly, he said.
“So far to date, we have seen some pretty consistent business,” Koppel said during his own presentation at the conference. “We get pretty timely feedback in how our customer is behaving and we have not seen any indication that our customer is slowing down.”
Market volatility has threatened to end a two-year sales boom that has buoyed Saks Fifth Avenue, Nordstrom, Neiman Marcus Group Inc. and Bloomingdale’s owner Macy’s Inc. (M) as their lower- priced rivals have struggled.
Luxury consumer confidence is tied to stock markets trends because they affect affluent shoppers’ perception of their own wealth -- the so-called “wealth effect.”
Prada Totes
Sales at stores open at least a year at the luxury chains climbed 8.5 percent in the seven months through August from a year earlier, according to the International Council of Shopping Centers, as shoppers continued to buy $1,295 Christian Louboutin ankle boots and $1,790 Prada totes.
Discounters recorded a 3.3 percent gain in that period, the New York-based trade group said.
Saks, based in New York, on Aug. 16 forecast growth in sales at stores open at least a year in the “mid-to-high single digit” percent range in the second half of the year. Nordstrom on Aug. 11 projected a 4 percent to 6 percent increase for the full year, greater than the 2 percent to 4 percent acceleration it foresaw in May.
Tiffany & Co. (TIF) Chief Financial Officer Patrick McGuiness on Aug. 26 said stock market volatility hadn’t hurt sales, and that revenue in the current quarter was exceeding estimates. The luxury jewelry retailer reported that sales jumped 31 percent in the three months ended July 31.
Saks shares climbed 32 cents, or 3.4 percent, to $9.63 at 12:36 p.m. in New York Stock Exchange composite trading. Nordstrom increased $2.11, or 4.8 percent, to $45.91.
“It hasn’t been nearly as dramatic as we saw last time,” Koppel said. “If it prolongs over a period of time, and it causes more slowdown, yeah, it could impact us. But we haven’t seen it.”
To contact the reporter on this story: Cotten Timberlake in Washington at ctimberlake@bloomberg.net
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