Wednesday, January 23, 2008

Quick, Shut Your Wallet!

Quick, shut your wallet!
The New York Times, Week In Review section did an article on thinking twice before making your next big purchase. Forget about spending $400 on handbags, $200 on jeans and $300 saucepans [who's doing that?]. Luxury is not looking so affordable anymore!
The article says “affordable” luxury such as Tiffany’s, Nordstrom and Coach have had slow sales and plunging stock prices. “You had a lot of people who graduated to a level of consumption they could not really afford.”
The article went on to say that “Coach persuaded women to buy $400 handbags when a $60 version from Macy’s could have sufficed and 7 for All Mankind convinced people that they wanted a $200 pair of jeans when a $30 version from the same material is available from Wranglers.” The article said this was called "trading up." A concept derived from soaring home values and the steady growth of real income. Today, falling home prices and rising energy costs are beginning to scare the most unlikely kinds of people, those who can afford luxury.
"One of the biggest casualties may be the illusion of wealth that millions of Americans enjoyed for years, one Burberry trench coat at a time." Fashiontary thinks this is so true! It remains to be seen if we will ultimately trade down if the economy goes into a recession. Stay Tuned.