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Luxury Goods Show Strong Sales

Sean Gallup/Getty Images(NEW YORK) -- Retail sales overall haven't been too hot this holiday season, but one sector is on fire: luxury. At Tiffany, Burberry, and Neiman Marcus, cash registers are ringing. From Houston to Boston, sales of life's necessities may be flat, but minks are flying out the door.

"When we look at luxury sales on a national level," says Howard Davidowitz, chairman of Davidowitz & Associates, a retail consulting and investment banking firm in New York City, "we see they're doing just fantastic. Saks and Neiman's, they're terrific. Coach is fine, Nordstrom is fine. Bulgari and Tiffany, tremendous."

Retailers catering to the middle class are hurting, however. "Best Buy is off, Sears is off. Target? Not so good. But if you're selling luxury, you're golden," he said.

Davidowitz views the contrast as proof that, "our society continues to be bifurcated," with the rich doing fine and everybody else hurting. "The top 10 percent represent 35 percent of spending. A lot of that is driven by the capital markets, which have been very strong lately. The rich have a disproportionate percentage of their assets invested there. People are making a lot of money on their investments."

Tax firm Deloitte, in its annual holiday survey of U.S. households, finds that those with an income level over $100,000 feel more upbeat about the economy's prospects than do those below. They intend to spend 3 percent more this holiday than they did last year, in contrast to lower-income households, who said they expected to spend 12 percent less.

Copyright 2011 ABC News Radio

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