Cutting back hits luxury markets

LOS ANGELES, April 7 (UPI) -- Sales of luxury items, including cars, are dropping amid an economic pinch that borders on recession, U.S. retailers said Monday.

Sales of high-end Mercedes-Benzes fell 3.7 percent in March compared with 2007, USA Today reported. BMW sales have also dropped -- by 8.7 percent. Lexus sales, ditto, dropping by 13.6 percent.

The economic pinch is a "double whammy," Milton Pedraza, chief executive officer of the Luxury Institute told the paper. "Your real estate is down and your investment portfolio is down," Pedraza said.

"Even the ultrawealthy are saying, 'Let me pause here and see what's going on,'" he said.

Tough times have also hit high-end retailers Nordstrom -- with a sales drop of 3.3 percent in February -- and Neiman Marcus Group, which recorded a comparable-store-sales decline in February.

"People are a little cautious right now," says Tim Smith, the manager of Bob Smith BMW in Calabasas, Calif.

But he was hopeful. "We're on everyone's shopping list," he said.