The economy's downward trend has slowed sales and increased prices of luxury goods throughout the country, and businesses in the Valley are no exception.
From designer clothing stores to car dealerships, high-end retailers said current economic difficulties are hurting their business.
The Sunglass Hut in Scottsdale Fashion Square Mall increased its prices significantly on designer sunglasses because fewer units were being sold, said Gary Blick the store manager of Sunglass Hut since January 2007.
Higher-end products like Burberry, Dolce & Gabbana and Prada all sustained price increases from last year, he said.
Prada glasses, for example, rose in price three times this year, Blick said.
"The average prices of Prada glasses in 2007 were $245," he said. "Prada shades are now sold anywhere from $285 to $310."
Although there is still high demand for designer glasses among returning customers, there has been a decline in first-time buyers, Blick said.
"The demographic has definitely switched in the last year," he said. "People who already own designer shades are buying more."
The same is true for the Porsche dealership in North Scottsdale — they have increased prices 4 percent from just last year, said Jamie Demaro, a Porsche salesman in North Scottsdale.
Demaro has been a part of the company for the last six years and said he witnessed a decline in sales since he began in 2002.
"This year I am personally down 30 percent in sales," he said. "No longer are people buying $50,000 cars, but rather cars are being purchased in the $100,000 range."
The upper class has proven they still can afford a 4 percent increase while first-time buyers are hesitant to make a purchase, he said. In previous years the increase in price for a Porsche was approximately 1 percent, but the Porsche Cayman has dropped in sales due to the price increase from 1 percent to 2 percent, Demaro said.
The Porsche Carrera GT is a mid-engine sports car, and in the last year its price tag increased by 3 percent, he said. The car was originally sold at $72,000, and this year it is going for $74,000, he said. The number of cars being driven off the lot this fiscal year at the North Scottsdale dealership is approximately 25 percent lower than it was of last year, he said.
Blick and Demaro are both consumers of their luxury goods, Demaro a proud owner of a Porsche, while Blick owns at least four pairs of designer shades.
"If it wasn't for my 30-to-50 percent discount, … I would never be able to pay full price," Blick said.
Consumers in the United States have typically been able to purchase luxury goods for lower prices than those in other countries. To buy a Porsche in Canada is 25 percent more expensive than in the U.S., in Europe Porsche prices can experience more than a 50 percent hike, Demaro said.
With a bleak economic outlook and a weak dollar, it appears that sales of luxury goods will continue to fall as their prices rise.
Reach the reporter at: andrew.shainker@asu.edu.
