Luxury fashion designers find store buyers in nervous mood

NEW YORK - As hundreds of buyers gather in New York this week to see the spring designer fashions in beachy brights like marigold yellow and ocean blue parade down the runways, they're taking a hard look at what will excite their customers.

Luxury chains such as Saks Fifth Avenue and designer boutiques across the nation have seen sales slow in recent months as their well-heeled clientele have cut back on $4,000 jackets and other pricey purchases amid turbulent financial markets. Added to the economic volatility is uncertainty about the U.S. presidential election, with many taking a wait-and-see approach.

As a result, many high-end stores are delaying some of their ordering of spring merchandise. Buyers who are placing orders are looking for pieces that are bold and eye-catching, without being too far out, rather than playing it safe with classic items.

"You have a nervous consumer, a nervous buyer and a nervous market," said John Mincarelli, a professor at the Fashion Institute of Technology who is also a retail consultant for designer boutiques. "It's a precarious decisionmaking time."

In addition, he added, "you are buying for spring when you don't know if you will have a Republican or Democrat [in the White House]. ... A lot of buyers are playing it close to the vest."

Mincarelli estimated that buyers planning their designer clothing orders for spring are spending anywhere from level with last year to as much as 10 percent less.

"People are still spending, but they are spending differently. We don't need a store-full of basics," said Sara Albrecht, owner of Ultimo, a designer clothing boutique in Chicago, which has seen a decline in traffic since spring. "As long as it is something great, people will still buy it. You have to look harder."

The subdued spending by the wealthy seems to signal an ebbing of the over-the-top splurging that helped luxury retailers once appear immune to the economic slowdown. Since late last year, stores such as Coach Inc. and Tiffany & Co. started seeing a slowdown, but only in recent months have luxury boutiques felt pinched.

Faith Hope Consolo, chairman of real estate firm Prudential Douglas Elliman's retail leasing sales division, which works with top-name designer brands, noted that luxury customers are still buying -- but not as much.

"Instead of buying five pairs of Jimmy Choo shoes, they're buying two or three pairs," she noted. What's also depressing demand is that prices for European designer items have soared from a year ago as the dollar grew weaker, she said.

Designer customers historically don't trade down to cheaper stores or labels, but Kathryn Deane, president of fashion consulting group Tobe Report, says they are now buying less-expensive brands to save money. High-income customers are also scouring for designer bargains at stores such as T.J. Maxx, fashion consultants say.

That's not good news for luxury retailers. Last month, Saks Inc., which operates Saks Fifth Avenue, reported a wider-than-expected quarterly loss and gave a downbeat sales forecast for the second half. Saks also told investors that it's seeing its high-end designer consumer cut back.