Last year, investment bankers and their spouses kept their wallets shut during bonus season, first, out of panic, and later, fearing mobs with torches would descend upon their gated estates. Now, after a year of self-imposed austerity and in what is shaping up as a spectacular bonus season, the Wall Street crowd is shaking off what one luxury retailer called its "frugal fatigue." Unlike earlier spending sprees, however, the consumption will be a lot less conspicuous.

On Wednesday, Morgan Stanley said it was setting aside $14.4 billion for salary and bonuses, or $235,000 per employee. A day later Goldman Sachs said it would pay an average of $498,000, with top producers at each of the two banks earning in the millions.

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Suzanne Johnson, the general manager of Saks Fifth Avenue's flagship store, said many wealthy customers were suffering from what she called "frugal fatigue." After a year of looking, they are ready to treat themselves. Next month, Saks is holding an event at its Kiton men's wear boutique where made-to-order suits can cost as much as $21,000. It will feature Kiton's craftsmen and is timed to bonus season, she said.

She recalled, too, a couple -- the husband was a banker -- who came in last month and looked at a pair of earrings from the Roberto Coin Cento collection that cost about $5,000. Days later he returned and bought them for his wife. "They are turning 'looking' into an 'impulse buy,'" Ms. Johnson said. "It is about inner self-gratification rather than letting people know how rich you are."

Coach has been cutting handbag prices and introducing new styles in an effort to improve sales of shoes and accessories as consumers continue to cut spending on luxury goods. Efforts to boost its North American operations showed some success in the prior quarter. Coach also has been working with its suppliers to avoid hurting margins, as stores remain cautious about building up inventories despite signs the economy is stabilizing.

Chairman and Chief Executive Lew Frankfort on Wednesday said Coach was especially pleased with the rebound at its North American stores from the holidays, with same-store sales up 3%

During November and December 2008, Tiffany saw sales at its U.S. stores open at least a year plunge 35 percent in the wake of a global financial crisis that reined in even its most well-to-do customers.

During the same months of 2009, U.S. same-store sales rose 12 percent, with a 16 percent rise in November and a 10 percent rise in December.

The company's total same-store sales rose 8 percent on a constant exchange rate basis. The company's flagship store at Fifth Ave in New York saw sales jump 20 percent.

Founded in 1951 by entrepreneur Achille Maramotti in Italy's Reggio Emilia, the group today counts some 23 lines, from Mara and Sportmax to Max & Co., Marina Rinaldi and Pennyblack, each with dedicated design teams and catering to different target customers.

The group counts 2,250 stores in 90 countries worldwide, all designed in-house. Exports account for about 45 percent of sales.

Spending among 1,067 consumers with average annual income of $228,800 rose to $18,826 each in the three months ended in September from $14,554 a quarter earlier, the Stevens, Pennsylvania-based luxury-market research firm said today. Shoppers cut spending by 3.2 percent in the second quarter and spent $13,429 in the third quarter of 2008.

The increase was driven by consumers with the highest income levels, starting at $250,000 a year, said Pam Danziger, Unity's Marketing's president. Spending was strongest in the home, travel and dining segments, she said. The wealthy curbed purchasing earlier this year because of Wall Street job cuts, lower home values and volatile financial markets.

"No question that this quarter's spending increase is good news for luxury marketers," Danziger said in a telephone interview today. "Many affluent consumers returned after sitting on the sidelines for a year. However, the richest are few in number, 2.5 million households, so competition will be fierce to win their attention."

Hermes International SCA Chief Executive Officer Patrick Thomas said the French luxury-goods brand's sales are “booming” in China and elsewhere in Asia, while the U.S. market is "slightly positive."

Revenue in China and Hong Kong jumped 40 percent in the past month, and the company expects that pace to continue, Sassi said backstage after the show, stepping aside as photographers rushed to snap pictures of Russian model Natalia Vodianova, who sported a small black Valentino dress. Sales in Japan were "not that bad," Sassi also said.

The Pink Collection will go on sale in October, designated in several countries as breast cancer awareness month, at selected Ferragamo boutiques in Hong Kong, China, Taiwan, Korea, Singapore, India and Australia.

"Asia is waking up from last year's financial disaster much faster than Europe or the United States," Michelle Ng, regional managing director for Ferragamo, told Reuters.

"Right now, we're seeing better performance and sales in Asia than anywhere else, due to the new wealth in the region and also the growing middle class which aspires to buy designer goods."

In the first six months of 2009, net profit dropped 23 percent to 687 million euros, or $934.3 million, from 891 million euros, or $1.39 billion, a year earlier. Sales in the period rose 0.2 percent to 7.81 billion euros, or $10.6 billion, from 7.79 billion euros, or $12.15 billion, a year earlier, helped by strong global demand for Louis Vuitton bags and a good performance by the Sephora beauty chain. In the second quarter, sales were flat at 3.79 billion euros, or $5.15 billion. Currency conversions were made at average exchange rates for the respective periods.

"Reassured by the good resilience" in the first six months of the year, chairman and chief executive officer Bernard Arnault said LVMH is looking at the second half with confidence, without providing a specific outlook.

Marty Wikstrom, whose Atelier Fund took a majority stake in the high-end accessories label in 2006, said Tuesday that Norton and Atelier's investors had made a mutual decision to "stop and rethink" the business.

"The economic climate is dire, and young designers are especially hard-hit," said Wikstrom. She added: "The brand is in a high-end category, and there is a buying hiatus for those consumers right now." She declined to talk about future plans for the label.

Despite the downturn, a moneyed class of people are still buying luxury goods—and they're doing it by the mini Cooper–load. While Wall Street's hedge-funders have become whipping boys, those who have mastered the art of inconspicuous consumption are living as large as ever. But they're not easy to spot, resembling, as they do, Trotskyite grad students—a look that doesn't come cheap: $300 Acne jeans, $175 hand-stitched guayabera shirt, $150 mussed haircut with beard trim (not too short, please). This brand of consumerism escapes condemnation—it's okay to be a capitalist pig as long as you're the sort who roots around in your organic garden for truffles.

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Yet for the poorgeoisie, every cushy expenditure is justified. According to Jennifer O'Brien, a luxury-branding consultant who's worked with Gucci and Donna Karan, among others, some high-end companies have successfully tailored their products to the shifting times and tastes (e.g., De Beers' "Fewer, better things" campaign). "A product needs to have a story that intrigues people about how it was made or what's gone into it," she says. And that's particularly true for the under-the-radar rich, who tend to practice what Thomas Frank calls "virtuous consumption" of pricey handmade clothes and locally farmed foods. "This shadow class of wealthy aren't working in silly jobs downtown," O'Brien says.

The study by London-based retail analysts Verdict said Japan and the U.S. are expected to bear the brunt of the 2009 slump, with sharp declines in sales of 14.6 percent and 12.1 percent, respectively. A far different luxury retail sector will emerge once the global economy recovers. Customers, who are now favoring understatement rather than fashionability, are likely to demand fewer, but more exclusive, items of outstanding quality, the report said. And the Internet will be a major sales conduit for luxury goods, helping to widen their reach and bring costs down.

Although luxury brands have traditionally been slow to introduce e-commerce, the change will force retailers to innovate. The Internet is particularly appropriate for products such as accessories, watches and jewelry, where fit is not as much of an issue and an online luxury retail platform could offer special personalized services such as individual designs and engravings, said Simon Chinn, who coauthored the report with Daniel Lucht.

"Things are stabilizing," Ahrendts said in a Bloomberg Television interview on the sidelines of a luxury-goods conference in Monaco yesterday. "They're not getting any worse, they’re not getting significantly better." The market got "really bad" in September and October last year, she said.

Burberry, Britain’s largest luxury-goods company, last month reported a full-year loss after it sold more handbags and apparel at a discount and wrote off the value of its business in Spain. Sales in the 175 billion-euro ($241 million) luxury-goods industry may drop at least 10 percent this year, Bain & Co. said in March, downgrading its forecast as the recession worsened.

For example, the store at the Shops at Willow Bend in Plano, Tex., a mall that has struggled with poor traffic since it opened in 2001, will close one hour earlier at 8 p.m. from Monday to Friday. The Houston Galleria store, which has been one of the luxury chain's best performers, will open one hour later on Sundays — at 1 p.m. instead of noon.

At the Mall at Short Hills, N.J., Neiman's will close an hour earlier, at 8 p.m. Monday to Friday, but remain open an extra hour until 9 p.m. on Saturday. No changes will be made to marquee units, including the downtown Dallas flagship, NorthPark Center in Dallas and the Beverly Hills store on Wilshire Boulevard.

The forecast, to be released Tuesday by consultants Bain & Co., widens the decline that Bain had forecast just five months ago. Last October, it predicted a 7% world-wide sales drop, citing the economic downturn. Bain now expects luxury-goods sales will drop as much as 20% in the first two quarters of this year before stabilizing in the second half.

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The U.S., which accounts for roughly a third of luxury-goods sales, is one of the worst-hit markets. Bain expects U.S. sales of high-end clothing, accessories, tableware, cosmetics and jewelry will drop by 15% this year. That compares to expected sales declines of about 10% in both Europe and Japan.

Apparel is expected to suffer the most, declining 15% globally from a year ago. "What is happening in apparel is that shoppers are more and more looking for value," Ms. D'Arpizio said. "Some are mixing and matching expensive items with cheaper clothing. Others are waiting for markdowns, and looking for high discounts," she added. Sales of jewelry and watches are forecast to fall by 12%, while sales of high-end shoes and other leather goods are expected to fall by 10%.

Retailers in countries from the Baltic states to the Ukraine, many of which are reeling from currency devaluations and significant current account deficits, are reporting lower sales. "The crisis is being felt very strongly here and is affecting absolutely every segment," said Irma Marcinkiene, a spokeswoman for Apranga, which runs franchises including Emporio Armani, Ermenegildo Zegna and Hugo Boss in cities like Riga, Latvia; Vilnius, Lithuania, and Tallinn, Estonia.

Apranga reported a 27 percent fall in February turnover, to 7.6 million euros, or $10.3 million at current exchange, compared with the previous year. The figures include results from its mass-market brands such as Zara, Mango and Mexx. In Poland, turnover at Paradise Group, which runs 13 shops including Burberry, Emporio Armani and Kenzo, remained constant at around 10 million euros, or $13.5 million, in 2008, although sales had expanded 20 to 30 percent annually in previous years, said chairman Mariusz Kaczmarczyk.

Eastern Europe is experiencing similar problems as Russia, which early last year was still considered an El Dorado for luxury goods, and enjoyed a boom after the deprivations of the Communist era and the unstable Yeltsin years. But as the financial crisis has taken hold, the closures of a number of boutiques, including Alexander McQueen and Stella McCartney, have been announced.