Luxury Retailers Are Set To Reap The Benefits From Tax Reform

Luxury retail was the talk of the National Retail Federation’s 2018 Big Show. With shoppers perking up, the stock market rallying and new tax legislation likely to put more money back into consumers’ pockets, conditions are favorable for many luxury brands. Jerry O’Brien, director of the Kohl’s Center for Retailing at the University of Wisconsin-Madison, told CNBC the tax cuts could result in a bigger gap between luxury retailers (i.e. Tiffany, Hudson’s Bay, Neiman Marcus and Tapestry) and other players, though he said off-price brands will continue to outperform in 2018. This leaves the “middle ground” of the industry at risk, he added. In a separate interview with CNBC, Rod Sides, vice chairman of Deloitte’s U.S. retail and distribution practice, likened the retail industry to a bow tie. The two far ends of the spectrum — luxury, on one side, and off-price retailers and dollar stores, on the other — are seeing new highs, leaving everyone else in a “knot” in the middle. Oppenheimer analyst Brian Nagel said during an economic roundtable that it will “take consumers time to get used to having [more] money in their pockets.” Read more at CNBC.