Sad news for luxury goods shoppers: the era of deep discounts and fabulous sales is about to end. Luxury retailers such as Barneys and Saks have been discounting like crazy for two years to get customers into the stores. But now that there are a few positive economic signs on the horizons, the sale stickers are coming off and the prices are going back up.
Luxury chains including Barney’s and Saks Inc. are selling costlier goods after scaling back discounts and promotions they offered to attract shoppers in the recession. Tiffany & Co. raised prices across the store. U.S. sales of luxury goods may rise 4 percent in 2010 after falling to $60 billion last year from a 2007 record of $72 billion, according to Bain & Co.
"The get-it-cheap party for luxury consumers has ended," said Milton Pedraza, chief executive officer of the New York- based research firm Luxury Institute. "When consumers now turn over the product and look at the price, they see that those days of incredible discounts on luxury goods are over."
The prices are skyrocketing, in fact. The average price for luxury goods in the U.S. (excluding jewelry) has jumped 11% in just one year, as of March according to MasterCard Advisors' SpendingPulse data. Well, it was fun while it lasted.
