By Randy Tucker
The Cincinnati Enquirer
The 2003 holiday shopping season in Greater Cincinnati and across the nation is a tale of two retail sectors.
Price-conscious stores such as Target and Wal-Mart continue to lure bargain-hunting consumers. Not much news there.
But business also is good at tony retailers such as Tiffany & Co. and Saks Fifth Avenue - names synonymous with all that glitters at a luxury price. In fact, last month's U.S. retail sales reports showed shoppers splurged at upscale stores while discount chains, department stores and specialty retailers posted only average results.
"Luxury retailing will lead the industry this holiday season,'' said Pam Danziger, president of Unity Marketing, a Pennsylvania-based retail-consulting firm that tracks the luxury market. "The upscale consumer has much more confidence than any other group because they're not worried as much about jobs and other concerns dogging the average consumer."
Saks and Tiffany, which operate stores in downtown Cincinnati, delivered two of the best performances in November across all retail segments.
Saks said same-store sales were up 6.7 percent last month, well past the 2.8 percent gain that Wall Street had anticipated. And Tiffany & Co., whose shares have risen as much as 80 percent this year, beat expectations by a wide margin as well.
Even smaller boutique retailers have reported a renewed interest in high-end merchandise.
"Our regular high-end customers are back and buying,'' said Shoaib Asgher, general manager at Dino's men's store at Tower Place mall downtown. "The question isn't whether they're ready to spend, the only question is whether we have what they're looking for.''
Experts say things are looking up in the luxury retail sector because of something they call the "feel-good" factor, or rising consumer confidence, which jumped to its highest level in 14 months in November, buoyed by rising stock prices and a growing economy.
"I'd say I'm cautiously optimistic about the future, but more so than I was last Christmas - that's for sure,'' said Gail Gibbons of Mariemont, who was shopping last week at Saks downtown.
"I want to get my husband something special this year, which is why I'm here. But you definitely wouldn't have seen me in Saks at this time last year," Gibbons said. "It was just too risky to spend that kind of money because you didn't know what was going to happen next.''
Wealthier shoppers are demonstrating their improved confidence by scooping up such pricey accessories as Piaget and Baume & Mercier watches, Alfred Dunhill leather goods, Montblanc pens and Cartier jewelry.
"We're definitely having a good year,'' said Susanne Halmi, who manages the downtown Tiffany store, known for its ultra fine jewelry.
Halmi attributes the strength of the luxury sector to a combination of rising consumer confidence and pent-up demand.
"People have been holding back on treating themselves because of the economy and world affairs,'' Halmi said. "People now, I think, are feeling much more optimistic.''
Sales for luxury merchants are also being driven by broader selections of more affordable items that have attracted first-time buyers in addition to their core clientele.
Tiffany, for example, has expanded its selection of sterling silver jewelry in recent years, and Halmi said she has seen sales of sterling silver bracelets and necklaces priced at $100 to $300 take off during the holiday season.
"It's not uncommon now for a 17-year-old boy to come in and buy a silver bracelet for his girlfriend,'' she said.
"We don't always have to make the $50,000 sale.''
But while new buyers are a nice bonus, they aren't a significant force yet in the estimated $250 billion luxury goods industry.
According to Unity Marketing, suburban housewives with household incomes averaging $152,000 are still the mainstay of the market.
And after two years of global turbulence and economic uncertainty that has curbed their spending and kept many of them out of the stores, those women are emerging from their cocoons and reconnecting with the world outside, said Karen Kotsovos of Kotsovos Furs & Fine Apparel in Montgomery.
Fine furs in fashion
Kotsovos said sales of fine furs and leather goods are tracking well ahead of last year, driven largely by women's fashion trends.
"Fur and leather is very much in fashion this year, even down to the junior level," Kotsovos said. "After putting it off for a while, women are now buying what's in fashion because they feel it's their turn and they deserve it.''
Kotsovos said that renewed optimism is often reflected in the conversations she has with her customers.
"People seem to be pretty happy and want to have a good time,'' she said. "They're talking about going to more parties this year, and they're buying very dressy eveningwear and more expensive accessories to wear to those parties.''
Sherry White, 34, of Montgomery is a prime example.
She was shopping for a "very dressy'' evening gown at Kenwood Towne Centre last week.
She said she plans to wear it to a New Year's Eve celebration.
"I haven't gotten really dressed up and gone to a party in years,'' White said. "I'm stepping out this year.''
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