The rich treated themselves like royalty during the holiday season. That spun the holidays into gold for Tiffany & Co. and other high-end retailers.
Wealthier shoppers traded up to more expensive gold and diamond jewelry from silver charms at Tiffany. At Saks and Neiman Marcus, designer clothing and handbags were the hot holiday items.
The strong reports are a big improvement from six months ago, when wealthy Americans got spooked by a stock market slide and cut back spending. It shows that affluent shoppers are trading back up to higher-status brands as the stock market bounces back. The rich in booming Asian economies, especially, are ramping up spending.
Tuesday, Tiffany & Co. raised its outlook for the year because of better-than-expected holiday sales and noted particular strength in more expensive fine jewelry and diamond rings.
Revenue at stores open at least a year rose 7 percent in the U.S. and was even stronger in the red-hot Asian economies, rising 15 percent. That's a key measure of a retailer's health because it excludes the effects of stores that open or close during the year.
The jeweler's report backs up strong December sales reports from pricey department stores Saks Inc., Neiman Marcus and Nordstrom. All reported significantly higher revenue than a year ago.
Upper-income shoppers splurged, particularly during the last week before Christmas, a Gallup poll showed. Average daily spending reported by upper-income shoppers rose 45 percent to $183 during the week ending Dec. 26. For all shoppers, the figure rose only 18 percent to $85 that week. Luxury sales were helped by many well-heeled customers buying gifts for themselves, analysts said.
That shift helped luxury spending, excluding jewelry, rise 8.5 percent Nov. 28-Jan. 1 compared with a year ago, adding to a 5.5 percent increase last year, according to MasterCard Advisors' SpendingPulse, which tracks all transactions including from cash. Jewelry sales rose 10.4 percent.
The figures are based on spending from Nov. 28 through Jan. 1.
Both figures are still below their pre-recession peaks. Luxury sales are 6.9 percent below pre-recession levels, while jewelry is 8.9 percent below. But the momentum bodes well for 2011.