The Dropping Price of Luxury
December 5th, 2008 by Nubby
Photo courtesy of The NY TimesAccording to the NY Times, even luxury goods are not exempt from the faltering economy. High-end Fifth Avenue department stores including Bergdorf Goodman are luring in shoppers with enticingly deep discounts. Customers are now digging though designer handbags on tables with prices slashed upwards of 40%. The New Yorker’s Patricia Marx has even remarked that “Sixty percent off is the new black.”
Surprisingly, established luxury retailer Saks dug even deeper than its competitors, dropping the prices of much of its fall fashion up to 70 percent. Customers were so shocked that they assumed that many of the price tags were misprints.
A just released MasterCard Advisors report lists luxury goods sales as being of nearly 25% off this year when compared with last. The era revolving around the endless drive towards high-end consumption appears to be drying up fast.
The NY Times raises the question that everyone is pondering: With such deep discounts on luxury goods, consumers are left wondering what the astronomical mark-ups were in the past. And, now that they’ve witnessed these bargain basement prices, will they be willing to pay full price ever again?
Tags: consumption, economy, luxury, spending
December 5th, 2008 at 5:29 pm
This is an interesting redefinition of value. What does the new “worth” look like across the board in other categories? And what is valuable if luxury is not the darling of the masses any longer?
December 5th, 2008 at 6:10 pm
Mark Lewman: I agree. If luxury isn’t ‘luxury’ anymore and mansions and designer apparel can be picked up for a fraction of the price, then what’s left? Where does that leave non-luxury soft goods?
December 8th, 2008 at 8:47 am
60% off is the new black…I love it, but isn’t this just a temporary glitch in the matrix? And where did all this mass guilt come from?
December 8th, 2008 at 9:48 am
Dave Allen: It’s hard to say…the markups have been so astronomical and now that people are seeing the bargain prices on these luxury goods, they may just permanently change their mindset. It seems likely that they’ll hold out from now on for items to ‘go on sale’ since they’ve seen how much lower prices can drop. I think there’s a massive guilt complex because people have been consuming way beyond their means for so long.