Oct 7, 2009

The Shrinking of the Fantasy GiftBy Vanessa O'Connell

Even our fantasies are being downsized.

Neiman Marcus Group Inc. mailed out its annual Christmas Book catalog, which each year features over-the-top “fantasy” gifts, to one million customers on Tuesday. But for the first time in a decade, there isn’t a seven- or eight-figure price tag on the list.

The most expensive fantasy item for 2009 is a $250,000 “his and hers” two-seater Icon aircraft, which comes with pilot training for two. That’s a far cry from the $20 million submarine offered in 2000, the $10 million Zeppelin of 2004 or the $10 million stable of racehorses of 2008.

Such gifts aren’t really expected to sell—just one of the $1 million-plus fantasy gifts in the past decade actually found a buyer. But the holiday catalog, which has included a handful of outrageous items since 1959—when Neiman put a Black Angus steer with a rolling roast-beef cart in its catalog—has long been the last word in luxury, a potent symbol of shoppers’ aspirations.

Neiman Marcus is not the only store downplaying dreams. This year, Saks Inc.’s Saks Fifth Avenue is discontinuing its practice of marketing “dreams by design” or “wow” fantasy gift experiences such as a walk-on role in an American Ballet Theatre production sold in an online auction, with bids that started at $3,000.

The cuts reflect prolonged frugality among upscale shoppers. Sales at Neiman Marcus stores open at least a year have fallen by double-digit percentages for 12 straight months. U.S. sales of luxury goods are expected to drop 15% this year, according to consulting firm Bain & Co.

The dour economic climate has also bred distaste for conspicuous consumption. Ginger Reeder, a spokeswoman for Neiman Marcus who is also its corporate gift scout, denies that the absence of a $1 million-plus gift is meant to make a statement. This year, “I didn’t see anything that I thought was fabulous” in that price range, she says. But Ms. Reeder examined the cultural mindset as part of her gift-creating process, and the themes she found, such as compassion for the earth, don’t seem to square with million-dollar merchandise.

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