Luxury Institute News

May 20, 2013

Richemont’s Asia focus drives full-year sales up 14pc

Posted in China,Europe,Fashion,Handbags,Japan,Jewelry,Luxury Brands,Retail,Watches,Wealthy Consumer
Tags: Asia, Cartier, Milton Pedraza, Richemont —

By Erin Shea
Luxury Daily
May 17, 2013

Richemont is attributing its full-year sales increase to demand in China and Asia-Pacific, contributions from currencies and exchange rates and the broad growth from its brands across all regions.

Luxury conglomerate Richemont reported a 14 percent increase in annual sales to approximately $13 billion in 2012, compared to last year’s sales of $11.4 billion.

Richemont also reported that its profits for the year are up 30 percent to $2.6 billion from $2 billion in the previous year, much of which can be attributed to the sales in Asia-Pacific. The conglomerate released its results May 16 for the fiscal year that ended March 31.

“The Chinese and the Asians have a very healthy appetite for jewelry,” said Milton Pedraza, CEO of The Luxury Institute, New York.

“I think that ready-to-wear products may be oversaturated [in Asia], and handbags may be oversaturated, so watches and jewelry tend to be valuable,” he said.

“There are some companies in luxury that continue to grow, despite the global economy.”

Mr. Pedraza is not affiliated with Richemont, but agreed to comment as an industry expert.

Richemont, which was not able to comment directly, owns a number of luxury brands including Vacheron Constantin, Jaeger-LeCoultre, Baume & Mercier, A. Lange & Söhne, Cartier, IWC, Piaget, Alfred Dunhill, Van Cleef & Arpels, Montblanc, Chloé and Roger Dubuis.

Asian expansion
Richemont attributes its sales results to an increased demand in China and Asia-Pacific, contributions from currencies and exchange rates and the broad growth from its brands across all regions.

The company said that it works on a long-term basis of benefiting from the prestige and heritage of its brands, which will continue in the future.

However in the short-term, Richemont said that economic troubles may impact consumer confidence in some markets. Overall, the conglomerate is cautiously optimistic about the future.

During this past fiscal year, Richemont reported that Asia-Pacific accounted for the majority of its sales, with 41 percent of the group’s total sales coming from that area. Hong Kong and mainland China are its two largest markets.

Europe, including the Middle East and Africa, was responsible for 36 percent of Richemont’s overall sales.The conglomerate says this area’s growth was a result of demands from tourists.The Americas region had a third consecutive year of double-digit growth. This year, it accounted for 15 percent of group sales.Compared to other regions, Asia-Pacific is the area that is leading Richemont’s growth.

“Asia-Pacific is still a vibrant part of the world and there are some companies that are doing well there,” Mr. Pedraza said.

“Some brands are doing a fantastic job in that area,” he said. “Richemont is doing a fantastic job.”

Retail v. wholesale
Another aspect responsible for Richemont’s growth is its individual brands’ focus on retail over wholesale.

Cartier boutique

For the Asia Pacific and Europe, Richemont reports that its brand’s own boutiques had the highest growth rates.

In Asia, the brand boutiques had higher sales growth than the company’s wholesale partners. This is in part due to the expansion of the boutiques in the region.

“Richemont has set out over the last few years to try to keep its own distribution,” Mr. Pedraza said.

“Retail is outselling wholesale, which can help a company grow faster,” he said. “You can have faster growth when you are de-emphasizing wholesale and emphasizing retail.

“Most luxury brands want to control their own distribution. Watch brands tend to be more retail-oriented.”

http://www.luxurydaily.com/richemont-sales-up-14pc-in-2012/

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October 19, 2012

Survey: Watch, Jewelry Sellers Forge Best Relationships

Posted in Customer Experience,Handbags,Jewelry,Watches,Wealthy Consumer
Tags: Milton Pedraza —

By: Rob Bates
JCK Magazine

Stores that sell watches and jewelry forge stronger relationships with customers than retailers of other luxury goods, says a new survey of affluent consumers by the Luxury Institute.

The survey found that 49 percent of affluent consumers have strong relationships with their watch retailers—the highest level for any category—and that 40 percent have similar relationships with jewelry sellers. Men’s ready-to-wear was third, followed by handbags and women’s ready-to-wear.

As to how jewelry sellers established relationships with consumers, the largest number of respondents (37 percent) said the jewelers “made them feel comfortable.” Some 35 percent said the retailer “demonstrated they were an expert,” and 30 percent said “they were not too pushy or overbearing.”

These relationships pay off: Two-thirds of respondents who have relationships with specific sales professionals at jewelry brands say they purchase more as a result.

Milton Pedraza, CEO of the Luxury Institute, tells JCK that, as impressive as these numbers are, they should be higher, noting the importance of relationships to upper-income consumers.

“There is no reason that we shouldn’t cultivate a much higher level for relationship building,” he says. “In the luxury industry, they should be your jewelers for life.”

The survey queried U.S. consumers with at least $5 million in assets and $200,000 in annual income.

http://www.jckonline.com/2012/10/18/survey-watch-jewelry-sellers-forge-best-relationships

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October 17, 2012

High-Income Shoppers Talk Openly About Luxury Salespeople; Relationships With Wealthy Customers Blossom When Staff Shows Knowledge, Professionalism and Courtesy

Posted in Automobiles,Fashion,Finance,Handbags,Jewelry,Press Releases,Travel & Leisure,Watches,WealthSurvey,Wealthy Consumer
Tags: BMW, Hilton, Lexus, Marriott, Mercedes-Benz, Milton Pedraza, Ritz-Carlton —

(NEW YORK) October 17, 2012 – Wealthy shoppers with minimum annual income of $150,000 rank attributes they find important among people selling them high-end goods and services in the new Experiences With Luxury Salespeople WealthSurvey from the independent and objective New York-based Luxury Institute.

The most important attribute is knowledge, cited by 72% of respondents. Being professional (68%), and polite and courteous (65%), are also of high importance, followed by being honest (57%), helpful (56%), trustworthy (52%) and experienced (52%).

Relationships with individual salespersons are common, with 40% of shoppers reporting a primary point of contact for at least one luxury provider. Relationships are most prevalent in personal finance (11%) and jewelry (10%). Perhaps surprisingly, individual relationships are just as common in fashion (8%), as they are in autos, travel and beauty.

Respondents provided ratings of specific brands in ten categories with exceptional levels of sales service. Some of the standout performers are Lexus, Mercedes and BMW in automobiles, Marriott, Hilton and Ritz-Carlton in hospitality, Coach in handbags, Nordstrom in fashion apparel and Rolex in watches. Categories in which the highest proportions of wealthy customers cite exceptional service are jewelry and watches (31%), leisure travel (24%), and fashion apparel (24%).

“A strong Customer Culture has a halo effect on companies,” says Luxury Institute CEO Milton Pedraza. ”More than 75% of high-end shoppers recommend brands to family and friends based on outstanding experiences that they’ve had with a salesperson.”

Respondents reported average income of $310,000 and average net worth of $3.6 million.

About the Luxury Institute (www.LuxuryInstitute.com)
The Luxury Institute is the objective and independent global voice of the high net-worth consumer. The Institute conducts extensive and actionable research with wealthy consumers about their behaviors and attitudes on customer experience best practices. In addition, we work closely with top-tier luxury brands to successfully transform their organizational cultures into more profitable customer-centric enterprises. Our Luxury CRM Culture consulting process leverages our fact-based research and enables luxury brands to dramatically Outbehave as well as Outperform their competition. The Luxury Institute also operates LuxuryBoard.com, a membership-based online research portal, and the Luxury CRM Association, a membership organization dedicated to building customer-centric luxury enterprises.

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October 11, 2012

Ultra-Wealthy Shoppers Spend More On Luxury Where They Maintain Personal Relationships; Pentamillionaires most likely to be close with specific sales professionals at Barneys, Bergdorf Goodman

(NEW YORK) October 11, 2012 – U.S. consumers with at least $5 million in assets and $200,000 in annual income share detailed opinions and observations about their relationships with salespeople in six luxury categories in the new 2012 Luxury Customer Relationship Index survey from the independent and objective New York-based Luxury Institute.

High-ticket categories show higher rates of customers who deal with a specific salesperson. Watches (49%) lead all categories in terms of proportion of customers who maintain relationships with salespeople, followed by jewelry (40%) and men’s ready-to-wear (38%). There is a noticeable drop-off in rates of personal relationships at luxury retailers (30%), handbag brands (27%) and women’s ready-to-wear (21%).

Across categories, 70% of ultra-wealthy customers who transact and communicate with a specific salesperson say that this relationship causes them to spend more on goods and services in stores and on the Web. The biggest positive impact on sales comes when customers maintain relationships with salespeople in luxury retail, and in both men’s and women’s ready-to-wear categories.

In luxury retail, Bergdorf Goodman (51%) and Barneys (49%) enjoy the highest rates of maintaining relationships with ultra-wealthy customers, with larger chains like Bloomingdale’s and Nordstrom seeing lower incidence of relationships. In the middle are Brooks Brothers (36%), Neiman Marcus (32%), Lord & Taylor (30%), and Saks (26%).

“Luxury retailers know that relationships drive sales,” says Luxury Institute CEO Milton Pedraza. “The right hiring, education programs and Customer Culture help to promote more productive relationships and higher sales.”

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December 21, 2011

Coach Outperforms Competitors on Key Brand Saliency and Service Metrics

Posted in Customer Service/CRM,Handbags,LBSI,Luxury Brands,Luxury Market,Press Releases
Tags: Coach, Handbags, Milton Pedraza, Wealthy Women —

(NEW YORK) Dec 20, 2011 — As part of its mission to educate and influence the luxury industry to evolve into world-class customer-focused enterprises, the New York-based Luxury Institute recently conducted an intensive analysis of its objective and independent Luxury Brand Status Index (LBSI) surveys and several WealthSurveys with wealthy consumers. With more than five years of data on dozens of luxury goods and services categories, the Luxury Institute sought to identify ‘best practitioners’ that have consistently scored above competitors.

In the handbag category, the analysis revealed that one brand stood alone in owning several critical metrics for brand vibrancy five years in a row: Coach.

Luxury Institute empirical data shows that Coach has achieved what no brand in the luxury handbag category has been able to in a five-year period with affluent women in the US: highest brand familiarity by a wide margin with an average of 73%. In addition, an impressive 25% of the sample of affluent consumers has purchased a Coach handbag in the last 12 months and 25% intend to purchase Coach as their next handbag. For comparison, the next highest rated brand has a purchase rate of 6% and purchase intent rate of 5% in the latest survey.

Coach is also the brand that most wealthy women have been willing to recommend to their friends and family for three out of five years and it has always been ranked within the top three most recommended brands with an overall average of 65%.

The brand is also top-of-mind when shoppers think of superior customer service. In a recent WealthSurvey, Coach was the handbag brand that was cited as having the best customer service on an unaided basis by premium handbag shoppers, outperforming its nearest two rival European competitors three to one. No other luxury handbag came close to achieving these results (see Graph A). Coach, to its global credit, demonstrates similar brand strength in Japan, one of the world’s most sophisticated luxury markets.

Achievements like these are the empirical rewards of a highly disciplined customer culture. Great product is extremely important and Coach is rated among the top quality handbags brands. However, a consumer-centric culture is the critical factor in consistently delivering extraordinary customer experiences.

By design, Coach is a consumer-centric brand built on strong core values. In an increasingly commoditized and highly competitive global luxury handbag market, it is simply not enough to outperform your competition on products; you have to dramatically outbehave them. “Unlike brands that tout their customer culture, yet fail to demonstrate consistent long-term profitability, Coach has repeatedly achieved superior results in Luxury Institute surveys for quality of product and service. In the mind of the U.S. luxury consumer, they are the clear winner in the Handbag and Accessories space,” says Milton Pedraza, CEO of Luxury Institute.

“The customer experience is the new battleground for the 21st century,” says Pedraza. “In a world where design, quality and craftsmanship are often imitated, brands will live or die based on more than just great products and services. With its customer-centric culture, as measured by independent wealthy consumer feedback, Coach is well positioned to thrive in a global marketplace where the human values and integrity of the brand matter most.”

About Luxury Institute (www.LuxuryInstitute.com)
The Luxury Institute is the objective and independent global voice of the high net-worth consumer. The Institute conducts extensive and actionable research with wealthy consumers about their behaviors and attitudes on customer experience best practices. In addition, we work closely with top-tier luxury brands to successfully transform their organizational cultures into more profitable customer-centric enterprises. Our Luxury CRM Culture consulting process leverages our fact-based research and enables luxury brands to dramatically Outbehave as well as Outperform their competition. The Luxury Institute also operates LuxuryBoard.com, a membership-based online research portal, and the Luxury CRM Association, a membership organization dedicated to building customer-centric luxury enterprises.

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November 2, 2011

Wealthy European Consumers Rank Luxury Hotel, Handbag and Fashion Brands; Loro Piana Loved By Women And Men, Hermès Earns Highest Handbag Score

Posted in Europe,Fashion,Handbags,Hotel/Resort,LBSI,Press Releases
Tags: France, Germany, Handbags, Hotels, Italy, LBSI, Men's Fashion, Milton Pedraza, U.K., Wealthy Consumers, Women's Fashion —

(NEW YORK) November 2, 2011 – A new series of Luxury Brand Status Index (LBSI) surveys from the independent and objective New York City-based Luxury Institute reveals firsthand impressions and rankings of dozens of luxury brands by high net-worth consumers from the United Kingdom, France, Germany and Italy.

Wealthy European shoppers evaluated each brand on quality, exclusivity, social status and overall ownership experience to tabulate an overall LBSI score. Also considered were price worthiness, willingness to recommend the brand and likelihood of purchase.

Based on overall LBSI scores, the top three luxury brands in each category rank as follows:

Hotels (26 brands): Taj Hotels Resorts and Palaces; Mandarin Oriental; Ritz-Carlton

Handbags (39 brands): Hermès; Tod’s; Chanel

Women’s Fashion (44 brands): Loro Piana; Brunello Cucinelli; Hermès

Men’s Fashion (35 brands): Loro Piana; Michael Kors; Brioni

Several country-specific preferences are apparent. In Women’s Fashion, Italians rank Valentino highest, Germans prefer Louis Vuitton, and Alexander McQueen earns top ranking in the U.K. In hotels, Ritz-Carlton ranks first in France and second in the U.K. behind Mandarin Oriental.

“There is certainly a diversity of taste and preference among wealthy consumers in Europe,” says Milton Pedraza, CEO of the Luxury Institute. “Several brands have succeeded in transcending national boundaries and enjoy wide appeal among the continent’s wealthy.”

Respondents come from households with minimum annual income of €50,000, or £60,000 in the U.K. For greater details on brand rankings in each category and other purchase considerations of wealthy European consumers, visit LuxuryInstitute.com.

For Further Information, Please Contact:

The Luxury Institute, LLC
Martin Swanson
Vice President
(914) 909-6350
mswanson@luxuryinstitute.com

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July 5, 2011

Local entrepreneur makes luxury handbags accessible to women

Posted in Fashion,Handbags,Internet/Web,Luxury Market
Tags: LuxeDH, Milton Pedraza, secondhand —

By Silvana Ordoñez
Sun Sentinel
July 3, 2011

Despite the troubled economy — or perhaps because of it — Hollywood entrepreneur, Roberto Szerer, has found an unusual niche and a solid market for his new business: women on a tight budget who love designer handbags.

Last year, Szerer launched LuxeDH, an online boutique selling authentic secondhand luxury handbags for up to 50 percent off the retail price.

“A Louis Vuitton handbag that retails for $900, you can find it in our site for $500-$550,” said Szerer.

Since September 2010, the online business has been selling major designer brands such as Hermes, Chanel, Yves St. Laurent, among many others. His chief supply source: Women willing to sell their gently-used handbags for a few bucks.

Sabina Jacobs, the company’s chief buyer and authenticator, said the economic downturn has made room for the business because: “Women are not looking to spend so much money on designer handbags anymore.”

Milton Pedraza, an expert in high-end consumer spending patterns, said buying used luxury items is becoming a quite popular trend — especially among consumers who are not wealthy, but seek to project an image of wealth.

“A lot of young consumers who are either not earning as much after the recession or are unemployed or feel that there is a risk in their job still covet luxury goods,” said Pedraza, founder of the Luxury Institute, a New York based research firm focused on high-end consumption.

The trend is reflected on LuxeDH’s success. The company sells approximately 200 handbags weekly to buyers Jacobs has dubbed “recessionistas.”

Maggie Payen, of North Miami, is one of them.

“I’ve always bought brand new bags,” said Payen, who has already made two purchases from the company. “If I can find a secondhand [bag] that’s in good shape, why not?”

Payen said she has her eye on a third bag.

Jacobs said all the bags she buys are 100 percent genuine designer products and not knockoffs.”We’ve never sold a fake bag, ever,” she said.

She buys from women around the world who want to either “clean up their closets” or put money on their bank account.

Prices range from $99 to $2,000, which are still steep. But for women like Payen, who are used to paying around $900 for a medium-size Louis Vuitton purse and find it on the site for $500, it’s a good deal.

” I am saving like $300-$400. It’s worth it to me,” said Payen.

LuxDH offers its customers interest-free payment plans of three or six months — depending on the bag.

And if a customer is not happy with the bag, she can return it within five days of receiving the merchandise to get a full refund or 30 days for an exchange.

” My business is to make women happy,” said Szerer. ” We assure our customers that all our handbags are 100 percent authentic.”

http://www.sun-sentinel.com/business/fl-luxe-dh-20110701,0,1969308.story

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June 18, 2011

Wealthy Consumers From China And Japan Rank Luxury Brands In Four Categories; Lots Of Love In Asia for Chanel, Hermès and European Stalwarts

Posted in China,Fashion,Handbags,Hotel/Resort,Japan,LBSI,Luxury Market,Men's,Press Releases

(NEW YORK) June 17, 2011 – A new series of Luxury Brands Status Index (LBSI) surveys from the independent and objective New York City-based Luxury Institute reveals firsthand impressions and rankings of dozens of luxury brands by high net-worth consumers from Japan and China. Respondents were 21 years of age and older, earning the equivalent of at least $185,000 per year—one million Chinese renminbi or 15 million Japanese yen.

Wealthy Japanese and Chinese shoppers rated each brand on quality, exclusivity, social status and overall ownership experience. Also considered were price worthiness, willingness to recommend the brand and likelihood of purchase.

Based on overall LBSI scores, the top luxury brands rank as follows:

Hotels
- China: Fairmont Hotels & Resorts; JW Marriott; Aman Resorts
- Japan: Ritz-Carlton; Orient-Express Hotels; Aman Resorts
Handbags
- China: Chanel; Louis Vuitton; Dior
- Japan: Hermès; Chanel; Louis Vuitton
Women’s Fashion
- China: Chanel; Dior; Hermès
- Japan: Hermès; Chanel; Louis Vuitton
Men’s Fashion
- China: Giorgio Armani; Versace; Brioni
- Japan: Hermès; Louis Vuitton; Burberry

“European luxury brands are warmly received by wealthy shoppers throughout Asia,” says Milton Pedraza, CEO of the Luxury Institute. “Japan’s market is more mature and surprisingly resilient so far in the wake of the tsunami and quake, while growth stays red hot in China. Firms need to know where they
rank.”

For greater details on brand rankings in each category and other purchase considerations of wealthy Japanese and Chinese consumers, visit LuxuryInstitute.com.

About Luxury Institute (www.LuxuryInstitute.com)

The Luxury Institute is the objective and independent global voice of the high
net-worth consumer. The Institute conducts extensive and actionable research
with wealthy consumers about their behaviors and attitudes on customer
experience best practices. In addition, we work closely with top-tier luxury
brands to successfully transform their organizational cultures into more
profitable customer-centric enterprises. Our Luxury CRM Culture consulting
process leverages our fact-based research and enables luxury brands to
dramatically Outbehave as well as Outperform their competition. The Luxury Institute also operates LuxuryBoard.com, a membership-based online research portal, and the Luxury CRM Association, a membership organization dedicated to building customer-centric luxury enterprises.

For Further Information, Please Contact:
The Luxury Institute, LLC
Martin Swanson
Vice President
(914) 909-6350
mswanson@luxuryinstitute.com

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June 8, 2011

Wealthy Millennials Define Luxury Brands In 16 Categories; Craftsmanship And Quality Still Count, But Loyalty Programs, Special Offers And Personalized Service Rise In Importance; Is Apple The New Dom Pérignon?

Posted in Fashion,Food & Beverage,Handbags,Luxury Market,Marketing,Press Releases,Retail,Watches,WealthSurvey
Tags: Apple, BMW, Coach, Dom Pérignon, Generation Y, Grey Goose, Millennials, Milton Pedraza, Rolex —

(NEW YORK) June 8, 2011 – High net-worth consumers 35 years of age and younger define luxury brands much more in terms of loyalty programs and unique offers than do their older wealthy cohorts, according to “Luxury Brand Marketing to Wealthy Millennials,” a new survey by the independent and objective New York City-based Luxury Institute. “Generation Y” individuals born in 1975 and later are also much more likely to have made a luxury purchase in the past year than 35+ wealthy consumers (83% vs. 66%).

Apple, cited without prompting by 45% of wealthy millennials as a luxury brand, tops all other brands, followed by Rolex, Coach and BMW, each offered by 30% of respondents as examples of luxury brands. Just 5.2% cited the iconic Dom Pérignon as a top-of-mind luxury brand, compared to 12% for those older than 35. In spirits, the most popular brand is the relatively young Grey Goose vodka.

“Wealthy millennials view luxury much more for the experiential factors associated with it, rather than relying on brand heritage or residual prestige earned long ago,” says Milton Pedraza, CEO of the Luxury Institute. “The good news for luxury firms is that these tech savvy shoppers want to interact with them, not only in stores but also online and on mobile devices. This builds richer experiences and deeper relationships.”

For greater details on brand perceptions, awareness and what matters most to wealthy millennials in each of 16 luxury categories, please contact Martin Swanson, VP of Luxury Institute.

About Luxury Institute (www.LuxuryInstitute.com)

The Luxury Institute is the objective and independent global voice of the high net-worth consumer. The Institute conducts extensive and actionable research with wealthy consumers about their behaviors and attitudes on customer experience best practices. In addition, we work closely with top-tier luxury brands to successfully transform their organizational cultures into more profitable customer-centric enterprises. Our Luxury CRM Culture consulting process leverages our fact-based research and enables luxury brands to dramatically Outbehave as well as Outperform their competition. The Luxury Institute also operates LuxuryBoard.com, a membership-based online research portal, and the Luxury CRM Association, a membership organization dedicated to building customer-centric luxury enterprises.

For Further Information, Please Contact:
The Luxury Institute, LLC
Martin Swanson
Vice President
(914) 909-6350
mswanson@luxuryinstitute.com

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November 26, 2010

Big Spenders Returning To The Luxury Fold

Posted in Handbags,Jewelry,Luxury Market,Marketing,Men's,Retail,Watches
Tags: Coach, Milton Pedraza, Saks, Tiffany, Tom Ford, Zegna —

By Marina Strauss
Globe and Mail
November 25, 2010

In the depth of the recession, Tiffany & Co. (TIF-N60.14-0.46-0.76%) struggled to sell $3,200 (U.S.) diamond earrings and $12,000 bangles, while it fared better with $100 silver necklaces.

Today, the situation is reversed, as the high-end retailer grapples with softer sales of jewellery under $500 even as it enjoys a recovery in higher-priced items.

“The people who are coming in to spend $1,000 or $5,000 or $10,000 or $20,000, they’re showing a much greater willingness to spend,” Tiffany vice-president Mark Aaron said in an interview on Wednesday.

“That customer is feeling a little better about things, while people who might purchase silver jewellery are spending more cautiously.”

New York-based Tiffany and other purveyors of luxury goods are rebounding from the recession in their North American businesses, which are still underperforming their overseas operations.

Retailers such as Saks Inc. and Coach Inc. are beating analysts’ quarterly expectations, luring well-heeled customers with pumped-up ad spending and classic styles, while scaling back margin-pinching discounting.

“We have turned the corner,” said Milton Pedraza, chief executive officer of market researcher the Luxury Institute in New York.

Still, upscale companies will be challenged to sustain the gains because of the relatively easy comparisons with previous recessionary years, he said.

And wealthy consumers are no longer shelling out for $800 camera bags or other frivolous merchandise, he said. “There’s a flight to quality.”

At Toronto-based men’s clothier Harry Rosen, sales of $5,000 (Canadian) Tom Ford suits and $4,500 Zegna leather jackets are particularly strong, said CEO Larry Rosen. The privately-held retailer’s overall sales so far this year have jumped by more than 13 per cent, compared with a decline of 5 per cent in 2009, he said. For this month alone, they’ve shot up 25 per cent from a year earlier. “The luxury customer has come back.”

But the past couple of years have taught Mr. Rosen to be more disciplined in focusing on classics – such as $300 cashmere sweaters – and refraining from taking risks on bright orange sweaters or “off-the-wall” items, he said. This year he is running sales with discounts of up to 20 per cent, compared with 40-per-cent reductions last year.

Saks has also reduced its promotions by offering, for example, “family and friend” discounts of 20 per cent this year compared with 25 per cent last year, CEO Steve Sadove said last week. The retailer’s cosmetics markdowns dropped to 10 per cent from 15 per cent. “We are consistently trying to reduce the number of [markdown] events, the brands included, the value of the events, and move toward a more full-priced selling environment,” Mr. Sadove said.

Tiffany, which doesn’t discount merchandise, raised its ad spending this year – shifting toward previous peak levels – after reducing it to 5.9 per cent of sales in 2009, down from 7.2 per cent of sales in 2008, Mr. Aaron said.

The marketing helped the jeweller perk up its third-quarter sales by 14 per cent, to $681.7-million (U.S.), while profit jumped 27 per cent to $55.1-million; Tiffany forecast a strong holiday season and raised its annual outlook.

Tiffany’s revenue in the U.S., Canada, Mexico and Brazil, which makes up about half of its business, rose 9 per cent, although the gains trailed those in the Asia-Pacific region (up 24 per cent;) Europe (22 per cent;) and Japan (12 per cent.)

Same-store sales, an important retail measure, rose 5 per cent in the Americas, below the overall 12-per-cent gain and largely driven by higher prices, which are expected to increase further early next year to offset rising costs of diamonds and precious metals such as gold.

To try to win more business, Tiffany is expanding into handbags, briefcases and watches. It and other upscale retailers are capitalizing on affluent consumers who feel more confident in their spending, helping the chains outperform other merchants whose customers are worried about the uncertain economy and sticking to must-have purchases.

http://www.theglobeandmail.com/report-on-business/big-spenders-returning-to-the-luxury-fold/article1812574/

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