On Tuesday, Saks Inc. reported a quarterly net loss of $31.7 million, compared with a loss of $24.6 million a year earlier. The company lowered its sales forecast for the second half of the year.
Thanks to President Bush's tax cuts, though, the average income tax rate for the mega-wealthy fell to 18% from nearly 30% over the same period.
Also in March, the Beverly Hills Chamber of Commerce hosted a "luxury summit" for high-end businesses. Panelists generally agreed that sales would remain robust thanks to the rich getting richer. But they warned that if the overall economy remained sour, the gloomy sentiment could eventually "trickle up" to places like Rodeo Drive.
Perhaps it's already arrived for some. Signs were up at the Bernini clothing store announcing that prices had been slashed by as much as 70%. Men's shirts that normally go for $100 were selling for $30.
"It's unbelievable," said salesman Basil Jreisat. "We used to have customers who would spend $10,000, $15,000, $20,000. Not anymore."
In another sign that Beverly Hills isn't immune to change, I watched as dozens of gawkers gathered outside the Fendi branch on Rodeo. Cars stopped in the middle of the street and people held cellphones aloft trying to snap pictures.
Why all the fuss? Reality-TV star Heidi Montag was buying a handbag.
"I could understand if it was Madonna or Janet Jackson," sniffed Dominik Was, a salesman at a nearby clothing shop he didn't want named. "But Heidi Montag?"
I asked how things were at his store.
"Oh, we have wealthy, healthy clients that can afford this stuff," Was replied. On Valentine's Day, he said, one customer purchased $120,000 worth of clothing.
"The economy affects working-class people like us," Was said.
"But wealthy people, it doesn't affect them."
Gradually the crowd at Fendi dispersed. The celebrity sighting was over. There was shopping to do.
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