Shopping mood hits well-heeled

High-end consumers are buying; low-income shoppers are holding back.
NEW YORK (AP) -- At Bergdorf Goodman's showcase of Bill Blass fall fashions, lawyer Ellen Harris made her biggest wardrobe investment in a while, ordering a dress and several jackets that together sold for several thousands of dollars.
"I am feeling a little bit more in the shopping mood," said the Madison, N.J., resident, who explained that economic uncertainty and the war in Iraq had curbed her enthusiasm for shopping. "I had been out less. I wasn't even buying mascara or pantyhose."
But at a Wal-Mart in West Little Rock, Ark., bookkeeper Vanessa Wilson said she wasn't motivated to do more shopping.
"My husband's job is kind of iffy," the Benton, Ark., resident said. "So I'm not frivolous."
Well-heeled shoppers, who analysts say curtailed their spending largely for emotional reasons over the past few months, are showing signs that they're interested in spending again, their spirits lifted by the stock market rally and resolution of the war in Iraq. They're spending at a faster pace than shoppers at discounters and other lower-priced retailers.
This change in attitude gave upscale purveyors including Neiman Marcus, the parent of Bergdorf Goodman, and Nordstrom strong sales gains in May. Barneys New York, which operates 10 stores nationwide, and designer boutiques like Louis Feraud also reported a solid rise in sales.
Feeling better
"Absolutely, I feel better," said Denni Podes, of Red Bank, N.J., shopping at Bergdorf Goodman. War jitters and family concerns had stifled her desire to shop, but she recently spent $50,000 on handbags and jewelry.
While it's too early to say upscale retailers are enjoying a sales boom, their experience is a striking contrast to that of stores catering to lower-income shoppers still worried about layoffs. Wal-Mart, Kohl's Corp., Family Dollar Stores Inc., and Big Lots Inc. were among the merchants posting May sales that fell below Wall Street's modest expectations.
Several consumer sentiment studies indicate that much of a recent boost in consumer confidence came from the higher-income consumer.
"Consumers are still very, very careful about what they're spending," said Tom Williams, a Wal-Mart spokesman.
But Dean Taylor, group manager for personal shopping services at Bergdorf Goodman, said, "customers are buying more freely and with much more confidence."
Bergdorf Goodman is most encouraged by sales at some of what the industry calls designer trunk shows over the past month, which they consider "a good barometer of how the consumer feels about the future," said Robert Burke, vice president of fashion. At trunk shows, consumers order merchandise that won't be available on the selling floors for several months.
Record sales
The store's Chanel show, held earlier this month, brought in a record $3.1 million in sales, Burke said.
Historically, high-end store sales have been the first to start improving as the economy recovers, but analysts say it will take even longer than usual for lower-income shoppers to regain their confidence.
Sophia Koropeckyj, an economist with Economy.com, a research company in West Chester, Pa., said, "There is more of a positive outlook for white collar jobs than blue collar jobs."
The professional and business service sector has lost 900,000 jobs since the end of 2000, but Koropeckyj said the sector has stabilized, and expects to see a modest increase in hiring this year.
Meanwhile, the manufacturing sector lost 2.5 million workers, and Koropeckyj said that unlike the last downturn, most of the job losses are permanent.