Financial crisis scuffs well-heeled shoppers

(Agencies)
Updated: 2008-10-09 16:01

A pair of shoes designed by A. Testoni from the Ruby Slipper collection are displayed during New York Fashion Week in this September 5, 2008 file photo.[Agencies]

Susan Coyne had her heart set on a new pair of earrings at Saks Fifth Avenue in New York, a purchase she would not have thought twice about even a few weeks ago.

But on Tuesday, she could not go through with it.

"I felt guilty about buying them. All my investments are down," said Coyne, who has been a Saks Inc sales associate for 31 years. "People are scared. I'm a big shopper here, too, but I'm holding back."

Luxury shoppers such as the Saks faithful make up only a small, elite portion of the U.S. economy, but tend to have an outsized effect on spending. They have kept their wallets open long after middle-income shoppers shut down under the pressure of a housing slump and rising food and fuel prices.

But now the last bastion of consumer strength finally appears to be caving due to the global financial crisis that has assaulted investment wealth as well as real estate values.

Even if a consumer still has millions in the bank, psychology plays a big role at the cash register.

"Of course you can continue to afford it," said Eva Jeanbart-Lorenzotti, chief executive of Vivre, a luxury goods catalog and online store whose wares include a $45 sterling silver ice cream spoon and a $3,800 mink chair. "Whether or not you feel like doing it is another question."

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