U.S. Spending on Luxury Goods Slows as Global Financial Concerns Grow
May 28 2012 - 8:20AM
Marketwired
Growing fears of an economic crisis in Europe has had a significant
impact on the sales of luxury goods. "The environment is getting
more difficult," SpendingPulse vice president Michael McNamara said
in a recent telephone interview. "It doesn't seem that the wealth
effect is enough to hold the sector up against economic headwinds."
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MasterCard Advisors SpendingPulse has said that in the U.S.
spending on luxury goods have decreased. Jewelry sales had the
worst performance falling 3.7 percent in April. All other luxury
sales climbed just 1.8 percent in April from a year earlier. Luxury
sales in the first quarter had previously gained 6.7 percent, and
13 percent in the fourth quarter of 2011. Growth has been slowed as
tourists have restrained from spending as a result of the stronger
dollar and growing concerns of Europe's economic troubles, McNamara
said.
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"In Europe, a softening macro environment toward the end of the
first quarter and changes in our merchandising and assortment
strategies across certain categories negatively impacted both our
wholesale and retail sales in that region," Fossil's CFO Mike Kovar
said in the company's earnings release. The company's 2012
earnings-per-share of $5.30-$5.40 fell short of analysts'
expectations of $5.56.
Coach, a leading marketer of modern classic American
accessories, last month announced sales of $1.11 billion for its
third fiscal quarter ended March 31, 2012, compared with $951
million reported in the same period of the prior year, an increase
of 17 percent. The company also announced that its Board of
Directors has voted to increase its cash dividend by 33%, raising
it to an annual rate of $1.20 per share starting with the dividend
to be paid to stockholders in July 2012.
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