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Tickers in this Article: M, SKS, BBRYF, BULIF, SWGAF, LVMHF
The devil isn't wearing Prada anymore ... or Gucci, or Burberry or Bugari any of those other pricey talismans of wealth and sophistication that are so favored by the favored.

Gone are the days when one could catch a flight to London or Paris simply to shell out a mere $20,000 to secure that must-have alligator skin Burberry handbag flashed by Sarah Jessica Parker in the film version of "Sex and the City".

High-End Consumers Shop for Second-Hand Bargains
We now have the new austerity - last year's little cocktail dress has been forced to make a second debut at this year's Christmas Party, albeit with the benefit of some different accessories. There's even word that sales at Good Will Industries are up 7% so far this year, with many new faces being reported among the second-hand bargain hunters in New York City. And, as reported in Reuters, a recent poll conducted by WSL Strategic Retail showed that 51% of women in the U.S. had recently bought second-hand clothes.

Maybe its a result of the collapse of one too many hedge funds, or the avalanche of pink slips that is currently emptying out the desks on Wall Street, but whatever the cause, the spending habits of the once high-flying set have come to a jarring halt. In such a tough environment, it'll be a real "Miracle on 34th Street" if high-end Gotham retailers like Neiman-Marcus, Barneys, Macy's (NYSE:M) or Saks (NYSE:SKS) make their numbers this season. And the bad news is not just confined to the Big Apple. There are growing signs that the dip in luxury spending is a global phenomenon.

Euroland's Purveyors of Posh Feel the Pinch
Recently Burberry (OTCBB:BBRYF), the maker of those iconic check-patterned clothes and accessories, warned that it is now facing tougher markets, especially in the U.S. The company was reportedly approaching the critical Christmas selling season with roughly 60 million U.K. pounds worth of additional inventory above what it had expected. (Be sure to check out Inventory Valuation For Investors: FIFO And LIFO.)

Shares in Bulgari SpA (OTCBB:BULIF) dropped nearly 10% earlier this month, after the company, which is the world's third largest jeweler, reported a 44% plunge in third-quarter income. A warning by CEO Francesco Trapani that demand for the company's products would likely continue to struggle in the holiday season may have prompted lower price targets from analysts following the stock.

Evidence is also emerging that the demand for pricey Swiss timepieces fell off a cliff in October as well. Shares of Swiss matchmakers Swatch Group (OTCBB:SWGAF) and Richemont both dropped following the release of trade data showing that Swiss watch exports rose by just 0.1% in October following a 15.5% gain the previous month. Exports to the U.S. fell by 12%. Hublot, the watchmaking unit of luxury group LVMH (OTCBB:LVMHF) also expects tougher business conditions in 2009.

The Final Word
All this new evidence that even high-end consumers have drastically cut back their purchases reveals the depth and breadth of the current consumption downturn. That suggests that the odds of any meaningful recovery in consumer demand next year are now decidedly lower than they were even a month ago.

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