Luxury purveyors fall amid darkening outlook

NEW YORK - Shares of luxury companies, including Polo Ralph Lauren Corp., Coach Inc. and Saks Inc., which operates Saks Fifth Avenue, fell Wednesday amid a darkening consumer spending outlook among the affluent.

The latest downbeat assessment on the luxury business, which was released by consulting company Bain & Co. on Wednesday, was sobering. Bain predicted that the worldwide luxury goods market will likely enter a recession in 2009 as it takes a hit from the worldwide global financial crisis. The study found that the sales growth of global luxury goods will slow sharply to 3 percent in the current year, compared with 9 percent growth in 2006 and 6.5 percent growth in 2007.

"The impact of the financial crisis will bring some sectors into a recession," said Claudia D'Arpizio, a Bain partner based in Milan and lead author of the study. "How much and how long depends on part on how companies react. The most resilient will be those with strong international and diversified brands."

The report noted that the Americas, which experienced a 4 percent growth in luxury sales in 2007, will be unchanged this year from a year ago. This will be the first year of stagnation since spending retreated after the Sept. 11, 2001, terrorist attacks.

Shares of Saks fell 9 cents to $5.62, while shares of Polo Ralph Lauren lost $2.12, or 4.9 percent, to $41.55. Tiffany's stock shed 19 cents to $24.62. Shares of Coach Inc's gave up 76 cents, or 3.9 percent, to $18.63.

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