Jan 26, 2010 6:39 pm US/Eastern
Economy Has Many Looking To Luxury Discount Stores
Alana Gomez, WBZ Reporter
BOSTON (WBZ) ― "I paid $645 for these," said Melissa O'Shea while pointing to a pair of Minolo's.
But O'Shea says big purchases like that are on the back burner due to the souring economy.
O'Shea is the president of a luxury shoe club named "Hello Stiletto," which boasts 2,600 members in the Boston area. The group serves as a barometer for retailers looking to tap into high-end spending habits and is often invited out for private shopping events so stores can monitor what people are willing to buy.
`These days there is a dismal answer to that question. "There's so much more focus on the state of the economy and people are worried about how they're spending their money," said O'Shea.
And O'Shea is part of a trend of Americans not willing to spend big bucks on brand names. A report from by Bain & Co estimated a 16 percent drop in luxury spending over the past year.
But just because many are not willing to empty their wallets for designers does not mean they are not using them.
Claire Jerome, a 22-year-old nanny says getting what you want for a lower price depends on where you look. "I've just kind of given up on the mall and online shopping and boutiques, because rather than get it for $80, I prefer to get it for $10 if its the same brand," said Jerome.
Jerome frequently shops consignment stores and stops into "Second Time Around" on Newbury Street up to five times a week. Jerome says on top of finding deep discounts -- up to fifty percent on brands like Versace and Gucci -- it is a great place to sell her stuff. "I just got a Kate Spade bag, but I thought it would go a lot longer if I sold it for a hundred bucks," said Jerome.
Jessica Dolivar, the store manager, said sales have increased over the past six months. "We used to only buy and sell high-end designers, but ever since we opened our racks to brands like the Gap, our sales have seen a twenty percent increase."
And retail chain stores are rethinking their consumer strategies as well. Coach Inc. announced a boost in holiday sales partly due to introducing a cheaper line of handbags.
But a brighter economic forecast could be in store for this year. The National Retail Federation just released their projections for 2010, predicting a 2.5 percent rise in retail sales.

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