Bargain shoppers turned out en masse across the land on Friday morning to observe Black Friday rituals, while retail temples from Target to Macy’s to Saks slashed prices to get people to do one simple thing: buy more stuff.

But upscale stores — and some their shoppers — seemed to think the Black Friday extravaganza beneath them.

I got a sense of this while I was interviewing people outside Saks’s flagship store on Manhattan’s Fifth Avenue this morning. I asked a customer exiting with a Saks bag full of merchandise what she thought of the sales. She sniffed:“I’m not here for Black Friday. All the stuff I bought was full price!”

Peter Bertling, a lawyer visiting from Santa Barbara, California, had a different point of view about discounts. “I hadn’t planned on buying a suit,” Bertling said as he left Saks. “If not for the Black Friday sale, I’d probably be at the hotel with my wife right now.”

While Saks discounts many items by 40 percent between 8 a.m. and noon on Friday, other upscale rivals seemed to the think holiday discounts were déclassé. At 9 a.m. on Friday, while Saks and Tiffany were open, other upscale stores that line Fifth Avenue, such as Cartier, Versace, Prada, Piaget and even Bergdorf Goodman, were closed.

(Photo: Reuters)

Normally double-digit sales declines don’t cheer investors.

But shares of jewelry chain Tiffany & Co rose 4 percent on Wednesday even though it reported that sales at its U.S. stores open for at least a year (”same-store-sales” in industry parlance) fell 10 percent in the third quarter. 

True, much of the hemorrhaging seems to have subsided since last year’s gruesome holiday fourth quarter when U.S. same-store sales fell 33 percent, and November is off to a promising start.

Seems that wealthy Asians and Europeans — in Asia outside Japan, overall sales rose 18 percent while European sales were up 10.5 percent in the quarter — are picking up the slack from rich Americans who seem to be curbing their shopping until the Dow Jones Index is more to their liking… like say 14,000. And analysts were encouraged that the jeweler is aggressively expanding overseas.

Tiffany is so bullish on China in particular that it is planning to triple the number of its stores on the mainland within 5 years. Outside China, the chain is also expanding. It is opening a second store at London’s Heathrow Airport next month and has opened new stores in Amsterdam, a Melbourne suburb, Toronto and Hong Kong this year.

While the affluent U.S. baubles buyer will eventually return, Tiffany is playing it smart by leveraging its strong brand and international footprint to get through the storm, analysts told Reuters.

(PHOTO: Reuters)

Check out cost cuts at Tiffany.
 
it is (was?) a recession and people aren’t buying as much expensive jewelry. Sales at Tiffany fell 16 percent in the latest quarter.
 
But even though profit also fell almost 30 percent, Tiffany shares still rose.
 
Cost cuts helped Tiffany beat analyst expectations. The company said SG&A expenses fell 14 percent. It’s also slowing its pace of store openings because of the recession.
 
“Breakfast at Tiffany’s?” Right now, it might be an Egg McMuffin and coffee from the deli on the corner.
 
Also in the basket:
 
Consumer spending lifted by “cash-for-clunkers”
 
L’Oreal H1 beats forecasts, ready to make purchase

(Photo: Reuters)

Check out hopeful signs that the recession may be abating.

While recent reports showed slumping sales at many big-box retailers, there are other signs that the economy may be bottoming.

U.S. retail sales rose in May and the number of workers who filed new applications for jobless benefits last week fell for the fourth straight week.

The Commerce Department today reported that U.S. retail sales rose 0.5 percent in May, thanks partly to gasoline sales that jumped 3.6 percent. Meanwhile, the Labor Department said initial jobless claims fell to their lowest levels since Jan. 24.

Discount retailer Target has increased its quarterly dividend, Clorox did the same while also affirming its 2010 profit outlook and financial targets for 2013, and Del Monte posted far stronger-than-expected quarterly earnings and provided a better-than-expected 2010 forecast.

Not all the news has been hopeful, however.

While last month’s U.S. foreclosure activity ebbed from April’s record high, homeowners were still struggling to keep up with house payments and May foreclosure filings were the third-highest on record.

Unemployment is at its highest level since July 1983. Some economists are talking about a “jobless recovery”, gas prices are rising and spiking mortgage rates are cooling demand for new home loans.

The weak economy has led to haggling in some unexpected places – namely  Tiffany – and forced other exclusive brands like Juicy Couture and Louis Vuitton to join the retail hoi polloi in trolling online for sales via Facebook and Twitter.

Also in the Basket:

Stimulus cash brings hope to poor U.S. youth

Jamba CEO eyes long-term growth, menu expansion

Lululemon posts lower profit, sees flat quarter

Look Who’s Shopping Goodwill (New York Times)

Restaurants Take Trip to Store (Wall Street Journal)

(Photo: Reuters)

Check out what top executives from the global luxury sector have to say.

Chief executives from Burberry Group, Hermes, Tiffany, Rolls-Royce and Richmont’s Van Cleef & Arpels are among the many officials who will speak this week at Reuters’ first-ever Global Luxury Summit about what their sector is facing amid a recession that has even well-heeled consumers dialing back spending.

In a new report, Bain & Co predicts sales of luxury goods are expected to drop 10 percent this year and not recover fully until 2012.

“Austerity is fashionable, even for the wealthiest consumers,” Bain partner Claudia D’Arpizio said.

Van Cleef & Arpels CEO Stanislas de Quercize said the French jeweler does not expect sales to rise this year even though it will open eight boutiques and Hermes CEO Patrick Thomas sees the luxury sector suffering for the next two years.

Some are more optimistic in the face of the slowdown. Burberry CEO Angela Ahrendts said the British luxury brand does not feel threatened by value-seeking shoppers, although she acknowledged “aspirational” consumers are unlikely to return to buying expensive coats and handbags any time soon.

Meanwhile, some retailers are already planning for something less luxurious: the back-to-school season.

Also in the basket:

McDonald’s same-store sales up, but shares fall

General Mills sees FY ‘09 earnings topping prior view

Bain Capital agrees to buy into China’s GOME-source

The Gut Renovation at Home Depot (Barron’s, subscription required)

Jewelers Adapt to New Priorities (WWD, subscription required)

(Photo: Reuters)

Check out the quarterly results at jeweler Tiffany & Co. It’s enough to make one question  Marilyn Monroe’s choice in songs.

The company posted a slightly weaker-than-expected first-quarter profit and said sales dropped 22 percent as shoppers avoided jewelry. Companies like Tiffany and even more-affordable peers such as Zale Corp have seen demand hurt in the past year as consumers focus on buying necessities in the recession.

In a sign that maybe things are at least stabilizing, Tiffany maintained its full-year profit outlook. Even better, the U.S. economy contracted slightly less than initially estimated in the first quarter.

However, consumers remain under pressure as plunging home prices, rising unemployment and a new wave of foreclosures are clouding prospects for a quick end to the U.S. real estate debacle.

Also in the basket:

J Crew beats in quarter, shares rise 17 percent

Organic Dairies Watch the Good Times Turn Bad (New York Times)

Hartmarx’s Fate Hangs in the Balance (WWD, subscription required)

Versace’s Business Model Stumbles On The Catwalk (New York Post)

(Reuters photo)

Check out retailers at the high end and the mass level topping Wall Street profit expectations after cutting costs.

Tiffany & Co’s fourth-quarter profit  handily topped analysts’ estimates, after the luxury jeweler took aggressive steps to tighten its cost structure as even wealthy consumers pare back spending in the recession.

Tiffany said earlier this month it would close its 16 Iridesse stores, since the chain, which specialized in pearl jewelry, recorded an operating loss ever since it started a few years ago. In January, the company said it was reviewing all elements of its cost structure. On Monday, it said it would suspend buying back its own shares until further notice.

Historically, retailers at the high end and low end were more shielded than those in the middle from the impact of a recession, as wealthy consumers were less affected and mass retailers and drug stores sold necessary items like medicines and toiletries.  Yet the scope of the current downturn has meant all levels of retailers felt the pain and have therefore sought ways to preserve costs as sales slow.

Walgreen Co, which is in the midst of a major overhaul that includes job cuts, store remodeling and moving some pharmacy work to centralized locations, posted a better-than-expected quarterly profit as those efforts paid off.

The drug store chain also said it filled 4 percent more prescriptions in the quarter than a year earlier, while retail competitors filled 1 percent fewer prescriptions.

Walgreen is also promoting paper towels, tissues, food and other items in new advertising, touting itself as a place to shop for “Affordable Essentials.”

Also in the basket:

Irish alcohol industry sees bleak 2009

National passion seeps into crisis fashion

Clarins puts on its best face in U.S. (WSJ - subscription required)

Designer high-low marriages on the rise (WWD - subscription required)

(Reuters photos)

The fallout from the turmoil on Wall Street will be felt by retailers who have set up shop on one of Manhattan’s most prestigious avenues - Fifth Avenue.

In the past week, Lehman has failed, Merrill Lynch agreed to be acquired by Bank of America, and the government had to step in to keep giant insurer AIG from failing.

It has created chaos on Wall Street and expectations of thousands of impending job losses. In August alone, New York City’s securities companies axed 10,000 workers.

It is the exact opposite of what retailers needed headed into what is expected to be one of the worst holiday season in years.

In a research note, Goldman Sachs highlights which retailers may fare the worst.

Wall Street’s financial turmoil heading into the holiday season is likely to negatively impact key NY centric retailers with meaningful flagship
presences.

Saks and Tiffany top the list with each of their flagships accounting for 20% and 10% of total sales, respectively. These key stores have been outperforming an already weakened store base as tourism has provided a bright spot. In light of a dampened worldwide wealth effect and strengthening dollar, more modest tourism gains should provide less of an offset to today’s worsening domestic demand.

….Luxury retailers and brands such as Coach, Nordstrom, and Ralph Lauren, are likely to also be pressured this season as waning Wall St bonuses and volatile equity markets erode confidence at the high end. While their NY flagships (Nordstrom is not in NYC) do not carry the same significance as those of Tiffany and Saks, we expect results to be impacted nonetheless

(Photo: Reuters)

Check out retailers’ profits and forecasts.

A discerning shopper, or investor for that matter, could browse the aisles of the retail financial world and come away with very different messages on the strength of the U.S. economy depending on which company’s results they chose.

On the plus side,  upscale jeweler Tiffany posted a better-than-expected profit and raised its full-year outlook, although that was driven by strong sales overseas. Tiffany expects U.S. same-store sales to return to growth in the fourth quarter. Shoe and hat retailer Genesco, and home-appliance and consumer-electronics retailer Conn’s also topped Wall Street’s views and boosted their forecasts.

For the pessimists out there, Williams-Sonoma saw its profit fall and it cut its forecast, while Sears Holdings also fell short of expectations amid the weak housing market.

Somewhere in the middle was discount store operator Fred’s, which reported a profit in line with what analysts were expecting.

Retailers have been hit in varying degrees as consumers dial back discretionary spending due to the pressure from high food and gasoline prices. Even as the U.S. economy grew stronger than first thought in the second quarter, economists see growth slowing as the year progresses.

Also in the basket:

Genesco posts better-than-expected profits; ups views

Williams-Sonoma profit falls, forecast cut

Sears Holdings profit falls short

Fred’s Q2 profit in line with market estimates

Michael Kors (but You Knew That) (New York Times)

(Photo: Reuters)

Soon, Signet will move its primary stock exchange listing to the New York Stock Exchange and may attract more investors to an already strong base. Signet who, you ask? They are known best as the operators of the Kay Jewelers chain and Jared The Galleria of Jewelry stores in the United States.

For Signet, sales trends in the United States are a bit different from those in the United Kingdom, according to the company. Predictably, U.S. sales peak around the year-end holidays, Valentine’s Day and Mother’s Day, though British shoppers are not keen jewelry buyers for the latter two holidays . Also, U.S. consumers are more into buying anniversary jewelry and upgrading engagement rings throughout the year. In the UK? Not so much.

These days, the greatest difference between jewelry brands may be the shopping experience and not necessarily the value of the diamonds their customers covet. (Of course, you need cash to buy those earrings, to begin with.) 

If you have a few thousand in hand and could do with an upscale, luxurious shopping experience, walk into a Tiffany or Harry Winston store. If those dollars are sparse, but you still want to try on those earrings before buying them, there are the Kay and Zale stores for you. But if you want that peaceful, easy feeling, (i.e. spend zilch on gas and avoid crowds) – open a new Web page and shop online. 

Online shopping has become critical, even for jewelers. But not all of them have realized the importance of an inviting Web site. Tiffany has revamped its Web site. Blue Nile, on the other end, has no stores and sells its jewelry purely online. 

Signet? About 55 percent of their stores are in malls, while their online retail sales are not significant, according to the jeweler. The company is still seeing its shoppers head to stores for baubles and they are willing to pay a premium for in-store service.

Signet derives about 75 percent of its sales from the United States and has a strong investor base here — explaining the primary listing move to the NYSE, scheduled to take effect on Sept. 11. The company  intends to keep a secondary listing in London.

(Photo of eclipse: Reuters)