EDITOR'S LETTER
New Rules at Retail

What a difference four years make. When the stock market crashed at the beginning of the millennium, it was the investment-driven wealthy consumer who took it on the chin. As a result, higher end retail took a big hit as well.

Most upscale merchants, however, especially those who held their ground when the bottom dropped out of high-end spending earlier this decade, are cashing in now.

Neiman Marcus is a perfect example. Despite many months of downward sales, it stayed the course and didn't move prices or merchandise downward. That decision has paid off, literally. So far this year, same-store sales are up an average of 16.5 percent over 2003. The Nordstrom chain has seen a similar boost of 9.6 percent.

A reason for this high-end spending, reports the Star-Sentinel, is last year's tax cut on dividends--a move that prompted many companies to increase cash distributions. "The additional payouts," reports Mike Niemira, chief economist at the International Council of Shopping Centers, "has spurred spending by upscale shoppers."

The point? When the economy falters, try not to forget who you are. Because if you change, your customer base will, too.

Sincerely,

Stephanie K. De Long
Editor-in-Chief