When Ralph Lauren opened its new store in Greenwich late last year as the economy struggled back to its feet, it not only plugged a gaping hole in what is otherwise among the most impressive luxury retail strips in the country, it also represented a vote of confidence for the sector that has reeled throughout the downturn.
Last fall, Boston-based Bain & Co. predicted sales of luxury goods would rise a mere 1 percent this year, after suffering a 20 percent drop last year amid a recession backlash against ostentatious spending by the jet set.
Bain conducts the study with Altagamma, a trade association that represents the Italian luxury goods industry, with the companies tracking some 200 companies and brands.
Bain researchers expect 4 percent growth for purveyors of luxury goods in 2011. Jewelry and watch stores have been hardest hit, followed by apparel save for shoe vendors, which just barely missed break-even.
On Greenwich Avenue, affectionately razzed by some as Rodeo Drive East, about a dozen storefronts are empty of some 100 lining both sides of the trendy, upper boulevard.
Westport”™s Main Street has nearly as many vacant storefronts, of about half the total spaces available on Greenwich Avenue. By comparison, Elk Street in New Canaan is holding up well with just a single vacancy on its short jog through downtown.
Retail sales statewide continued to flag in January, with state sales tax collections totaling $211 million, off 14 percent from a year ago. For the first seven months of the fiscal year beginning in July 2009, Connecticut had collected $1.5 billion in sales tax, down 8 percent from the same period in 2008.
Luxury retail was back in the klieg lights in New York City, this month, with the semiannual Fashion Week that kicked off Feb. 11 sponsored by Mercedes-Benz. Even as the sector could take solace in one positive sign ”“ a rebound in Wall Street bonuses after estimates of a 44 percent drop last year ”“ nobody is expecting a rebound to the ostentatious spending that characterized the peak of the most recent business cycle.
In Greenwich, many did not survive the downturn, including a few prominent players. Coach closed its store there, even as it added stores in may other locations; the children”™s clothing store Best & Co. folded up shop completely at its enviable street corner location on the main drag.
Still, some of those locations already have new tenants undertaking renovations in preparation for new stores. Shoppers treading leather on the avenue will soon have two new shoe stores to peruse, H.H. Brown and Cole Haan, and New York City-based Kimara Ahnert is opening a cosmetics studio.
In addition to Ralph Lauren, Apple Inc. finally opened its long-awaited retail outlet as well.
Ralph Lauren President Roger Farah mentioned the Greenwich Avenue opening among his company”™s proudest achievements last year, during a February conference call with investment analysts.
“We have slowly begun to see the gradual return of our core luxury customer,” Farah said.
Starwood Hotels & Resorts Worldwide Inc. sees the same trend, even as the company dismissed a Wall Street Journal report last week that federal stimulus requirements could prevent it from relocating its headquarters to Stamford in 2012 from White Plains, N.Y.
“Upper upscale and luxury hotels were hit the hardest, and these segments generate over 95 percent of our profits,” said Frits van Paasschen, CEO of Starwood, which has focused much of the past few years in debuting its upscale W Hotels chain. “As we have been predicting for some time, guests are coming back to luxury.”
