How Low Can They Go?

It almost seems counterintuitive: Shop at designer boutiques during the biggest economic downturn in 27 years.

But if you have the money to spend, this is the time to shop, especially if you want to own luxury brands, local retailers say. Whether it's Versace for her or Helmut Kohl for him, the high-end brands are available for prices rarely seen before.

"This is my opinion, but I think you're going to see items that traditionally don't go on sale, will go on sale this season," says Devin Marin, manager of Michael Stars at Town Square.

Marin, whose background is in high-end retail, says luxury brands occasionally offered 20 percent or 30 percent off select merchandise in the past, but shoppers will start seeing deeper discounts this holiday season.

And it's already happening.

Traditionally, Michael Stars, a specialty women's clothing store, didn't have sales, Marin says. A couple of years ago, the store started offering a January sale, and this year, for the first time, Marin says she has a full-blown sales rack and regular promotions. A current promotion offers 40 percent off of cashmere sweaters with a regular price of $225, while the sales rack signs promote 30 percent off.

A recent, informal survey at Fashion Show mall, the Shoppes at Palazzo, Forum Shops at Caesars and Town Square turned up eye-popping sales on several luxury brands. Some discounts, such as those at Saltaire boutique in Fashion Show, were as high as 70 percent. Barney's New York in the Palazzo had steep markdowns, as much as 50 percent off, on labels such as Dior, Helmut Kohl and Marc Jacobs.

Helmut Lang corduroy pants for men, regularly priced at $250, were slashed to $149 on a sale rack at Barney's. Richard James ties were priced at $69, down from $140, while a pair of Manolo Blahnik pumps went for $490, 40 percent less than the retail price of $815.

Such deals are almost industry secrets, because people who don't usually shop designer stores may not realize there are some great deals available, retailers say.

"I think sometimes people are intimidated about going into a designer store," says Alexis Vayda-Assayag, owner of Blend in Town Square. "They're afraid they won't be able to afford anything."

Blend, which carries about 60 brand names, mixes sales items in with regularly priced clothing, but it also features a clearance rack in the back.

A pair of Genetic Denim jeans was $240; now they're on sale for $60. A black skirt from Used Unused was $375, but is on clearance for $20.

Consumers are being more cautious with their spending, leaving retailers with inventory they have to move, says Joseph Federici, vice president and divisional merchandise manager for MGM Mirage retail. The biggest savings probably will be found at multibrand stores such as Barney's and Neiman Marcus, he says, causing a trickle-down effect to small boutiques. If Saks Fifth Avenue is selling a label such as Dior at a deep discount, the boutique may have to lower prices just to compete.

This economic climate is new territory for many designer brands and, in an effort to stay afloat, the companies are trying to give shoppers what they need: lower prices.

"For a lot of consumers this is a great opportunity to shop" luxury brands, Federici says. "I believe the industry as a whole is going to be promotional through the first quarter."

The sales also come with the traditional perks of shopping luxury brands, starting with customer service. It's a point of pride for many high-end retailers that they give customers the kind of service one usually receives from a personal shopper.

For instance, Michael Stars serves snacks, coffee, tea and water to customers who shop on weekends, Marin says. The store also provides free gift-wrapping, free shipping and gifts with purchases. Last week, shoppers who spent more than $125 received a free umbrella.

Tommy Hilfiger Childrenswear in Town Square offers juice boxes and apple cider to kids, says Becky Rempfer, store manager.

Parents appreciate little touches like that, because it keeps their children occupied while they shop, she says. The store has computers and chalkboards available for the kids to use, as well.

And, all merchandise in the store is 40 percent off through the end of the year, Rempfer notes. The store carries clothing for all ages, from infants to 16 years old. Tommy Hilfiger polos are sale priced at $6.99 to $11.99, while some pants are $11.99 and jackets cost $20.

Deep discounts may sell merchandise but they also could have unintended consequences in the future. If retailers slash prices until people buy, how low will they go? Will consumers hold out to get a price they want, instead of the price retailers ask for?

There was a time several years ago when retailers could control their prices, Federici says. Whether those days are gone is an open question. But it's not looking good for retailers.

"The industry has created a monster," Federici says. "It's become so promotional, the consumer is now expecting it."

Contact reporter Sonya Padgett at spadgett@reviewjournal.com or 702-380-4564.