Quote:
Originally Posted by Rick Lee
One of my best friends fits this profile to a tee. He's been unemployed since about June, but W2'ed about $300k for 2006 and lots more in 2005. Pissed most of it away in titty bars and making his new house fancy. Just had to bring $60k to the table to sell that house a few weeks ago and needed an LOC for it. He's burned through almost everything and is now down to his 401k and little else. His wife just went back to work and is making $48k now. They're in for quite a lifestyle change. He was my boss in subprime.
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So there are more and more like him - high income households who are in trouble. Alarming indeed.
About a year ago, the retailers with low and moderate income customers were feeling pain. These are, for example, Family Dollar FDO Christopher & Banks CBK JC Penny JCP.
Then retailers with higher income customers began feeling pain. Like Abercrombie & Fitch ANF Nordstroms JWN Coach COH.
Now genuine luxury retailers are feeling it. Tiffany TIF had a bad holiday - their flagship store in Manhattan did well from all the European tourists with euros, but sales to Americans in that store was down YOY, their other New York-area stores had down sales, their stores elsewhere in the US were down.
American Express AXP is seeing rising delinquency rates, their customers are typically more affluent too.
Bad stuff.