What recession? Luxury goods are booming

High-end products are still selling well despite economic uncertainty.

By Kim Peterson Dec 20, 2011 5:44PM
Wanna buy a $15,600 Gucci purse?

CNBC reports luxury goods targeted to wealthy shoppers are selling briskly. The percentage of the population that apparently has shrugged off any recession is buying enough Christian Louboutins for all of us. The average transaction amount, by the way, at Christian Louboutin's Dallas store is just over $1,108.

Post continues below.
Some luxury-goods stocks are also faring well this year. Retailer Michael Kors (KORS) debuted last week at $20 a share and saw shares close up 21% in the first day of trading. The stock was trading Tuesday above $25. Take that, Zynga (ZNGA)!

Macy's (M) has risen 25%, and Ralph Lauren (RL) is up 23%.

But other stocks in the sector are flat for the year, including Coach (COH) and Tiffany (TIF).
77Comments
Dec 21, 2011 2:43AM
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A lot of this is our fault. The movie stars, rock stars etc, make big bucks because we are dumb enough to pay high prices to see their movies and go to their concerts. The same goes for the pro athletes... they are way over paid. An average family can't afford to take their children to see a ball game.

In a way we are just as foolish as the people who buy $15K purses. The stars are laughing at us all the way to the bank also. We need to smarten up and stop making these people rich.

Dec 21, 2011 12:22AM
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I can barely pay my bills, yet I bought two pair of pajamas for needy children today. And that made me feel better than any purse ever could.
Dec 20, 2011 11:25PM
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I believe that people should spend their money any way that they want! I am just not impressed with anyone who buys a hand bag for 15,000 dollars. I really don't think anyone with common sense cares either after the initial shock and bragging has past.  Do these outrageous things really add to their lives longer then 10 minutes after they get them home or brag to their fake friends. I don't see Warren Buffet wasting money on such crap. Every time some one buys an outrageous item like this the designer is laughing all the way to the bank, Really how much is anyone's name really worth? What good is a 15.000 bag going to do anyone? Does it produce gold as you carry it. Does it make you sleep better having to alarm your house or put it in a save deposit box and pay to store it. Most people who buy this crap have shallow fake friends who tell them how great they are and what a wonderful investment they have purchased only to be laughing behind their backs. I suggest that any one thinking of wasting money on this crap ask themselves if their four thousand dollars shoes or bags perform their basic design function any better then one from  Macys! It would be better to just go to the designer and give him or her 15,000 in cash to prove that you are a fool rather them thinking that you are.
Dec 20, 2011 9:32PM
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Unbelievable and Unconscionable ...

We have 17 million unemployed, 22 million underemployed, 51 million on food stamps, 4 million foreclosures, 1 million homeless, boarded up stores, shopping centers and factories... and we have the 1%, the uber-rich, rubbing it all in our faces. $ 15,000 for a handbag? ... give me a break! I've been unemployed for two years, and had another interview just today. I did not have a decent pair of dress shoes, and consider myself fortunate that I found a pair of gently used loafers at Goodwill for $6.99 .. and that is the only personal thing I have bought for myself this entire year. I know I am not alone by any measure but I'm so tired of trying to decide every day whether or not to put a few gallons of gas in my 13 year old car or to buy a small bag of groceries so I can eat. This has truely become a nation of the haves and the have nots .. an absolute caste system based solely upon one's financial situation. Disgusted.

Peace to all

Dec 21, 2011 10:07AM
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@Barneys I am happy your parents can give you everything .  My parents gave me everything and can still give me everything. But the difference between you and I are very different. I don't have to ask my parents for anything because I worked hard with 2 degrees to supply my own.  Whereas you will always be worthless to the masses,  because you are a grown woman and still have mommy and daddy paying for everything.  At the end of the day it is all about self worth and dependency. 

Oh yeah, instead of buying everything from mommy and daddy credit cards how about going back to elementary and learn how to spell buy instead of "by".  And while you at tell your parents to put you back in private school because you are going to waste us taxpayers money.

Dec 21, 2011 12:26AM
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Just think how many kids that do not have 3 meals a day could be fead for $15,000.00.
Dec 21, 2011 12:40AM
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THE PROBLEM IS THAT WE SHOULD BE MAKING THEM HERE, MIDDLE CLASS IS IN A VANISHING ACT AND GOING AWAY AT A FAST RATE. MANUFACTURING JOBS IS WHAT HELD THIS COUNTRY TOGETHER  A PERSON COULD EARN A DECENT WAGE AND FELT THEY ARE GETTING SOMEWHERE, NOW EVERYTHING GOES OVER SEA'S. WE NEED TO GET BACK TO MAKING OUR OWN STUFF AGAIN!
Dec 21, 2011 2:53AM
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Pattyfied.....  You have the right idea. Our factories are all overseas. All we produce here are rich

               executives. But producing products here again is only half the answer. We as Americans have to start buying USA made again. Too many people in this country opt for the cheap product over quality. I got a gift of 3 wrenches last year for Christmas (china made). One has broken already, the other two are difficult to use as they are poorly made. I bought a very used made in the USA wrench at a flea market sale this summer. Best wrench I have ever owned. We vote with our purses/wallets.

Dec 21, 2011 12:18AM
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The lady below me is the prime example of the reason WHY people spend the ammount of money they do on these items, BECAUSE THEY WANT TO BRAG on how much they have. I even have facebook friends who post about the luxury items they purchase. 

I am financially secure, but will NEVER purchase something that high when I can get the exact same thing 90% cheaper, just minus the label. 

Imagine how many families you could feed instead of buying yourself a $9,000 pair of pumps. 
I understand people dont always want to lend a helping hand, but imagine the impact on lives you could have if you shopped smaller, and helped local people in your area. 

sad really.. 
Dec 21, 2011 9:01AM
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Derek Rose of the Chicago Bulls is expected to sign a $94milllion 5 year contract with the Bulls today. This is INSANE ! I doubt if Michael Jordan made this much during his entire career ( not counting endorsements) The fans paying these kinds of salaries is as nuts as buying a $15K purse. Like I said in a earlier post ... WE are at fault for this ...STOP making these people rich ... don't go to these games, movies and concerts ... give the money to the poor and stay home and wait for the movies to come out at Red Box .  Smarten up everyone !!!

Dec 21, 2011 8:45AM
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This just makes me sick.  Can't even afford a Christmas Tree.  History tells us that people do not give up their power willingly.  The same things that upset people and caused both the American Revolution and the French Revolution which was the gross disparity between the rich and poor is happening again.  History tells us the results.  I think most of us have given up on the idea that the rich even care.  I think they are so selfish and self-obsessed that unless we legislate fairness it simply will not happen.  We need to have change.  We need to take care of our sick and take care of our poor.  This is the hallmark of a civilized society of which we are no longer members here in the United States.  We are the only country that does not have free organized medicine.  We have fallen behind on education.  We told our politicians that we wanted change.... we wanted change now.  Instead they have decided as all selfish self-obsessed people do, to play politics in the same manner that we have said we were unhappy with in the first place.  Instead we have legislated in favor of greed.  This is the result.  $15M handbags.  These people ought to be ashamed of themselves.
Dec 20, 2011 8:46PM
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The wealthiest one-tenth of 1 percent receives an astonishing 12.3 percent of national income (that is .01% receiving 12.3% of all U.S. national income). And when you look at assets, it goes much higher. Currently, the richest 1 percent hold about 38 percent of all privately held wealth in the United States (Hurst, Charles E. Social Inequality: Forms, Causes, and Consequences).

Statistically, the top one percent are becoming wealthier even as the working and middle class become poorer. The Gini Index tells the story.

 

The wealthy can buy a great deal of this as they are prospering from the sellout and decline of America.

 

Google Help FIx America First for more information on how that is occurring.

Dec 21, 2011 1:14AM
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anyone who buys a 15k purse should be horse wipped unil thay are dead!!!!!
Dec 20, 2011 9:44PM
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This story is a perfect example of why this country is broken, possibly beyond repair.  It used to be that only a very few people could afford to shop at stores like these and pay absurd prices for luxury goods.  But these shops are no longer limited to specialized locations like Rodeo Drive or Fifth Avenue -- they're now all over the country, in malls for goodness' sake.  That tells you immediately that the traffic is significantly greater than just a few people and the stores are doing enough turnover per square foot of retail space to justify the overhead they're paying.  Bottom line: the gap between the people with millions if not billions to spend on shoes and handbags and the people who can barely pay their rent and put food on the table is getting wider by the day.  And you have to ask yourself where that money is coming from...  Chances are good that it's from profits made on the backs of all the people who are losing jobs daily in the name of "streamlining" operations and "maximizing revenue for shareholders."  Nothing wrong with businesses being profitable -- but what is wrong is that those profits are increasingly going into someone's pocket for no reason other than they happen to be at the top of the organization chart.  Anyone who works in a large company knows what I mean: 99% of the time, the CEO isn't qualified to perform a single job anywhere in the corporation he or she is running -- yet somehow they manage to make 300 or 400 times what their employees earn.  You have to ask yourself why...and who in the world needs a $30,000 handbag??!  The inmates are running the asylum.
Dec 20, 2011 11:51PM
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OF COURSE Luxury goods are selling.  The people that can afford those items are NOT the ones that are struggling and have to worry whether they should pay rent or groceries or medication b/c they have no health insurance!
Dec 20, 2011 9:02PM
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The rich don't live in the real world.
Dec 21, 2011 11:06AM
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What is wrong with you people? That mentality, "Oh, I have all this money, I should be able to spend it on whatever I want," is what's ruining this country. We're not jealous, we're disgusted by your selfishness. The economy has knocked people out of their jobs, they've lost their homes, they can't feed their families, through no fault of their own. But will you do anything to help your fellow people? No, you don't even appreciate everything you have. You are sad, and disgusting.
Dec 21, 2011 11:23AM
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tessah ...

I don't think Barneys has a nickle to her name. I think she is just a sh-t stirrer .

Why on earth would she spend 1/2 the morning posting if she were really daddys "little rich girl".  IF she were so rich you'd think she'd be out spending all that money, instead of sitting here bragging .

 

and Chloe ... yes you are correct , about spending keeps the economy going .. however spending $ 15K on a purse  just makes an outrageous goof ball designer more rich. (some of these designers remind me of "mad scientists") Instead divide that $15K and spend it at small businesses is what would be really helpful to the economy.

 

You know , I had a friend once that had to always be on top with the fashions ,style and keeping up with the Jones'. If someone told her that wearing a pile of poop on her head was the style, she'd do it. Today she has nothing  because she's been through 3 husbands who couldn't afford her. Now she is S O L and barely able to afford an apartment and a clunker car.  She did it to herself and I have no pity on her at all.  

Dec 21, 2011 10:26AM
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This is just gross, and its proof that money can't buy class.

Dec 21, 2011 1:33AM
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Let's see....can this $15,000 purse look good? Yes, but can it save you in the rain? Nope Can you use it as shelter? Nope Can it keep you warm? Nope Can it feed you? Nope ( I doubt any one would put food in a very expensive purse.) Can it pay the rent or the electric bill. Can it put gas in the car or get new wheels? All it is....is a purse! A bag to carry your cell phone  in.  It don't make sense.... Look at this new purse, it is special because it cost as much as a new car. I would be scared to carry it any where without a body guard. I just don't get it. Not when people like myself and many others I know are struggling to keep a roof over our heads. and food in our bellies. Playing Russian roulette with the remaining bills. People in this very Country are in need of coats so bad that they have coat drives. Or the homeless guy trying to stay warm under the bridge. Now if those who are able to purchase a $15,000 dollar purse without a flinch. If they were to help supply help to families, elder ones,  The guy living in a one room hotel room with his wife and 3 kids. He has to pay almost his whole paycheck so can not get the capitol he needs to get a home for his family. That single purse could help 4 persons a !st and last rent and deposits and deposits on utilities. That would help the 4 people and their families to become successful and on their feet. Now that would be worth the money!!!! It is so materialistic that I wish people would see the signs....In the last days critical times hard to deal with will be here!  
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