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Spending on luxury in tight times

May 10, 2009|Carla Hall

She walked into the Fred Segal store, that Melrose Avenue beacon of haute trendiness, and spied the Valentino bag. She hadn't really intended to shop, she says. She just went to pick up lunch.

"I'm a huge bargain hunter and any time I see a sale sign I'm easily distracted," said Rosabel Tao. So there was the bag -- a black leather bucket with flower detailing made of the same leather. It was $600. "The saleswoman put this huge pressure on: 'It's a classic! You'll use it forever! We're only having this sale today. . . . ' And I'm a huge sucker. I'm like, 'You're right! It's a classic.' "

It took 15 minutes for her to decide to buy it last December. "But it was 70% off," noted Tao, 39, vice president of communications at a technology company that specializes in advertising. (And for those who get vertigo scaling the heights of these price ranges, $600 was the price after the discount.)

It was just one of many sorties Tao would make between the end of 2008 and February of this year as she grabbed markdowns and saw her credit card totals for that period rise to $7,000. ("But that's not all shopping," she insisted, estimating her retail tally at about $4,000 -- about 50% more than she spent in a similar span the year before.)

Tao is that rare breed, a high-end shopper in the age of recession-spurred frugality. After the Fred Segal buy, she picked up two black silk jackets at a Ron Herman sale in January. "Right now, I'm in hot pursuit of gladiator sandals," she said several weeks ago.

Shopping for exquisite things you don't need -- but simply want -- would seem to be a pastime of a bygone era of bloated stock prices and housing values. Most department stores and luxury retailers have been crippled. Nordstrom reported a 13.5% drop in March sales compared with the previous year. Saks was down 23.6% and Neiman Marcus (which includes Neiman's and Bergdorf Goodman) was down 29.9%. Barneys New York does not publicly report but is thought by analysts to be suffering as well as budgets tighten.

Yet, for shoppers like Tao, the taste for high-end goods didn't vaporize along with the boom years -- and neither did the wherewithal (and imagination) to satisfy their appetite for luxury. For them, the gilded age continues, altered only by the glimmers of guilt that come with good fortune in bad times. The discomforts of the economic meltdown are muted, and desire can still be answered with a flash of plastic.

An L.A. woman who left her job at a nonprofit (but whose husband works in the television industry) spent just shy of $1,500 on a pair of Christian Louboutin boots during a recent trip to Las Vegas. The private, appointment-only Newport Beach jeweler Lugano Diamonds, has sold a couple of diamond necklaces for a low-six-figure price since the beginning of the year, a store executive said. And the proprietor of DeLuscious Cookies & Milk reports a surge in her online business, not among companies but among individuals willing to spend $50 for a dozen cookies plus the cost of having them whisked out of the oven and shipped overnight in-state. (Customers with emergency cookie cravings pay a $10 rush fee.)

"I still have the means to buy certain things and I'm buying them," said Contessa Mankiewicz, 33, who went on the shopping expedition in Vegas. "While I'm being much more disciplined," she said -- meaning no more weekly shopping trips to Neiman Marcus -- "there are things that are so beautiful or things I consider forever items, and I have no trouble buying them.

"Your life can't completely end because of the economy," she said. "How depressing would that be?"

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'Tortured' purchases

Neither Mankiewicz nor Tao is wealthy by the standards of the high-end retailers who court them (that would take at least $1 million in assets beyond equity in a house). But both describe themselves as comfortable, and neither has children to factor into a budget.

In these post-boom months, not much has changed economically for Tao, who owns a spacious condo in Brentwood that she bought several years ago. "I definitely feel like I have a pretty good job, and I'm single," she said, noting she has only herself to support. Still, there's no escaping the steady drumbeat of news about the economy. "It's everywhere -- every newspaper, every magazine, every show," said Tao, who clamped a shopping moratorium on herself sometime in February -- just before her company laid off some employees.

"At the time I did the shopping, I didn't know the layoffs were coming," she said. "If I had, I probably wouldn't have done it. In fact, I knew I shouldn't have been doing the shopping I did -- but I would have been more careful. . . . It definitely seems tacky now to have conspicuous consumption. I know so many people who are laid off and there is so much uncertainty."

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