Chapter 1: Why are luxury department stores like Saks struggling despite wealthy consumers?
Why are fancy store chains falling into bankruptcy when richer shoppers have money to spend? I'm David Brancaccio in Los Angeles. Let's get context on the parent of Sachs, Neiman's and Bergdorf filing for Chapter 11 protection from creditors this week. The Sachs global bankruptcy will help it reorganize and stay in business.
Analysts keep telling us the economy may be weak for lower income people, but that higher income people are generally doing well. Yet these chains of luxury department stores are in deep trouble. Marketplace's Kimberly Adams reports.
People buying luxury goods often break down into the really wealthy, who don't care that much about price, and those who might stretch a bit to buy something nice. Shikha Jain is the lead partner for North American retail at Simon Kutcher.
When it comes to luxury, you know,
Chapter 2: What factors contributed to Saks Global filing for Chapter 11 bankruptcy?
Neiman Marcus, other players like that are more what I would call in the aspirational luxury.
Jane says the Saks Global brands were getting those aspirational luxury shoppers, but those shoppers are more likely to pull back spending in times of job insecurity and higher prices for everything from housing to health care, especially younger consumers, says Lars Perner at USC's Marshall School of Business.
Many of the incomes have taken more of a hit, so they haven't had the same opportunities to get into luxury products that they would have had when times were better.
On top of that, luxury department stores are now competing even more with the brands they carry, says Marie Driscoll, a retail expert at Driscoll Advisors. What has happened in the last 20 years is many of the luxury brands have opened up their own stores, like the Dior, Chanel. Louis Vuitton.
To get a foothold in the new luxury retail landscape, Driscoll says department stores will have to lean into the idea of offering those aspirational shoppers a luxury experience, even if they're in the store, for a budget purchase. In Washington, I'm Kimberly Adams for Marketplace.
The price of crude oil is down sharply this morning, down about 3.5 percent, back under $60 a barrel in New York, after President Trump dialed down his rhetoric about the U.S. somehow intervening in Iran amid widespread anti-government protests there. The U.S. government's new limits on immigrants is running into the need to care for America's elderly.
The Trump administration is ending a special protected status for 350,000 people from Haiti created after the devastating 2010 earthquake there. Now, unless legal challenges delay this, the temporary protected status for people to live and work in the U.S. will end early next month. The elder care industry is expected to lose thousands of workers as a result at a time the U.S.
population needs more of that care. Marketplace's Elizabeth Troval has another story in our series, Help Not Wanted, about how changing immigration policy is affecting the workforce.
In a gray uniform, Richard makes the rounds, taking out the trash through the halls of Sinai Residences, a retirement community in Boca Raton, Florida. He's one of 26 Haitian staff losing their work permits because of the end of TPS. We're not using his name.
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Chapter 3: How do aspirational luxury shoppers impact luxury retail sales?
Richard is 30 and came here a few years ago after a gang attacked him. With the $35,000 or so he earns annually, he's been paying for school to become a licensed practical nurse.
Because I love, I love care people.
If he loses TPS, he'll try to stay in South Florida. He likes the weather, the people. He'll find gig work, but money will be tight. He'll have to stop studying.
I didn't save too much because I pay school and the school is very expensive.
Around 70% of the workers here at Sinai Residences are foreign-born. Many are Haitian.
Everyone that works here, they've got a smile on their face. They're like family.
That's Murray Rubin, a 92-year-old resident who counts these years as the best of his life, except for when his wife died.
We were married for 69 years, and the warmth and the empathy that the staff showed, come and ask if there's anything they could do for me. You know, you can't put dollars on that.
Sinai Residence's CEO Rachel Blumberg says not only does the ending of TPS disrupt relationships between residents and staff, it costs money.
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