Heimie's Haberdashery is humming through the holidays.

"As soon as we open at 10, the horse race begins," said Anthony Andle, owner of the one-of-a-kind upscale men's department store in downtown St. Paul.

At Heimie's, you can get a shave, buy a cigar, rent a tux or get outfitted with anything from a $325 Biltmore hat to a pair of $395 Romano Martegani shoes.

With retailers predicting the slowest growth in holiday sales in five years, and the year's rat race at the finish line, the luxury segment seems to be defying expectations. But at the other end of the retailing spectrum, deep discounters are looking strong, too, or at least not as bad as retailers catering to the middle class.

It's what economists call the hourglass effect: strength at the extremes and weak sales in between.

Last month, same-store sales at Saks were up almost 25.7 percent. Guess gained 15.8 percent, Nordstrom posted increases of 8.7 percent and Neiman Marcus saw sales rise 5.8 percent.

"People are saying, 'Why should I spend money on a Macy's store brand when I can go and get Roberto Cavalli at H&M for the same price?'" said New York-based Kathryn Finney, known as the Budget Fashionista. "That's where the middle is starting to lose out. People really are thinking about what they're buying, more so than any other year."

The pinch is showing up at retailers such as Target, Macy's, J.C. Penney, Kohl's and Sears, whose shoppers are scaling back spending in light of higher food, fuel and housing costs.

Trying to light a fire under procrastinators -- that's you! -- and lure in tight-fisted customers, many of those retailers have pulled out the stops in recent days with deals and extended hours. Merchants across the board typically take in 15 percent of total holiday sales in the five days leading up to Christmas, according to MasterCard Spending Pulse, which collects data on all payment forms, including cash and checks.

Many Sears and Kmart stores will be open for 64 hours in a row, starting Saturday and ending at 10 p.m. Monday. Macy's stores in the Twin Cities, which have been open until midnight, will stay open until 7 p.m. Christmas Eve. Toys 'R' Us slashed prices as much as 75 percent over the weekend, and Creative Kidstuff is offering curbside pickup.

But niche retailers and other peddlers of opulence are moving merchandise without resorting to deep discounts.

At Heimie's, Andler attributes his shop's success to a return to the quality and craftsmanship of yore.

"We're sort of Target-ed and Wal-Mart-ed to death with this homogenized consumerism," Andler said. "People are tired of buying cheap things. They want something that'll last 15 years."

Helped by the weak dollar, which lures tourists, sales of high-end items are up 11 percent from a year ago, excluding jewelry, Spending Pulse economist Kamalesh Rao said.

"Luxury is a unique animal in retail," Rao said. "It doesn't face the same kind of pressures and vulnerabilities with consumer spending. Outside of luxury, it's more of a mixed-bag results for retail and apparel."

Part of that mixed bag comes from a 21 percent drop in spending from the affluent middle class, those generally in the $75,000 to $149,999 income bracket, according to Unity Marketing.

Those earning $150,000 or more are spending the same, which delivers a stable customer base to the top end of the luxury market. But there's a cascading effect down the retailing continuum, as the upper middle class becomes increasingly pessimistic.

"A lot of people traded up over the last few years, moving up to better stores, better items, and a better-quality shopping experience," said Brad Fritz, a retail partner with Deloitte in Minneapolis. "Now people are starting to move down a notch. "

Trading down from Target

Minneapolis-based Target may be feeling the squeeze. In recent years, the discounter has better weathered economic downturns than its larger rival, Wal-Mart, largely because its customer base is younger, earns more money and is drawn to Target's affordable designers of trendy products.

But Target reported disappointing sales results in November, and said sales need to "meaningfully improve" in December to achieve fourth-quarter earnings growth.

In the trade-down world, Target's trend-conscious customers may be moving to Wal-Mart.

Sue Aguilar of St. Paul is one of them. Since getting laid off from Abbott Northwestern Hospital this year, the former Target loyalist goes to Wal-Mart because "prices are better," she says.

"We aren't having Christmas this year," said Aguilar, wiping away tears outside the Wal-Mart on University Avenue in St. Paul. "In fact we bought a couple of small gifts and we just got done returning them so we could buy laundry detergent."

Member clubs are gaining strength as economic worries mount. That showed up in November sales with Costco gaining 6 percent and Sam's Club up 8.7 percent. And the company that owns T.J. Maxx and Marshalls, which sell discounted designerware, surprised retail analysts with a 7.7 percent gain in November sales.

"The last time I was at Sam's Club, seemed like there were 14 Mercedes in a row," said Brit Beemer of America's Research Group. "I saw BMWs, Infinities, Cadillac SUVs. That tells you there's a different kind of customer going there."

Despite last-minute markdowns, retail experts maintain that overall sales growth will be in the 3 to 5 percent range. And many predict the hourglass effect will continue into 2008.

Citi Global Markets analyst Deborah Weinswig predicts that Target and Wal-Mart will be stable in the coming year, and that "luxury lives on."

You won't hear an argument from Sana Alanker, 27, on that point. The mother of one expects to put $4,000 on her credit card by the end of December.

"I always shop quality; it's going to last longer," said Alanker, of Maple Grove. "I have Louis Vuitton, Chanel bags, Burberry. I'll spend $2,000 on a bag. But I don't buy a bag every month."

Jackie Crosby • 612-673-7335