Saks Fifth Avenue, which assembled this display window in New York, is among upscale retailers that offered big discounts before the traditional start of the holiday shopping season.
Mark Lennihan / AP Enlarge
NEW YORK - The rich are tightening their belts, too. Even if those belts are labeled Gucci.
Faced with the sharpest decline in net worth in nearly 50 years, wealthy Americans are re-evaluating their priorities and slashing their spending at the most dramatic rate in decades.
Economists say that the trend of millionaires saying no to a third pair of $700 high heels is worrisome.
Michael P. Niemira, chief economist at the International Council of Shopping Centers, said the economy depends on spending by the wealthy because of their dominance in discretionary purchases.
Luxury brands are cutting inventory, changing product assortments, and tweaking their advertising messages. "Fewer, better things," suggests diamond jewelry giant De Beers Group in an ad campaign launched last month.
Some of the ultra-rich are still dropping $100,000 on a fur coat or $1,200 for a handbag - but increasing numbers who were never bargain-hunters are picking through mounds of discounted designer goods to save money.
Many of those still shopping are lowering their profiles.
"I keep a stash of brown paper bags," said Sara Albrecht, owner of a designer clothing boutique in Chicago.
She said she used to keep just a few bags on hand for those who wanted to hide purchases from their husbands.
But now she has a bigger pile, in response to requests from shoppers who want to keep their buying secret from friends and neighbors.
Still, she said sales are down 20 percent from a year ago.
Luxury sales overall dropped 34.5 percent in the first week of December from the same period a year ago, according to SpendingPulse, a service of MasterCard Advisors, and were down 23 percent in the five weeks ending Dec. 6.
In moves like those of their downscale competitors, high-end stores like Saks Fifth Avenue and Neiman Marcus offered discounts of up to 70 percent before the traditional start of the holiday shopping season.
"It is hard for us to tell what the true mindset of the customer is at this point," said Ginger Reed, a spokesman at Neiman Marcus, where profit dropped 85 percent in the quarter ended Nov. 1.
"We do know she is still shopping - both regular-price items and sale items - but not in the quantity she has in the past."