This has nothing to do with Asia, but this comment from Saks Q3conference call really caught my attention.
“During the quarter we experienced a greater decline among our high end customers consistent with the performance ofthe financial markets. This is in contrast to the stronger trends among this group that we had seen earlier in theyear… I don’t think any of us anticipated that the high-end consumer was going to fall off as dramatically as theyhave.”
“Our consumer [has] seen a major hit on their portfolios and they [are] in a frozen mode, shell shocked relative to howthey feel about their portfolio.”
The conventional wisdom is that the rich keep spending no matter what happens to the economy, but that sure isn’t whatSaks is seeing.
The last bastion of retail strength is now the low-end ‘Wal-Mart’ trade.
