Cartier and Louis Vuitton, those global symbols of opulence, suddenly look like bargains in one of the world's economic trouble spots: Brazil.
Because of a plunge in the value of Brazil's currency, the real, many marquee-name luxury products are now cheaper in Sao Paulo than they are in New York.
Not that many ordinary Brazilians can afford the baubles. At Cidade Jardim, an open-air mall with views of Sao Paulo's business districts, a Cartier Tank Anglaise watch, in gold and steel, costs 32,700 reais, the equivalent of $9,326. On Fifth Avenue in Manhattan, the same watch costs $580 more, taking various sales taxes into account. Similar deals were found at Prada, Tiffany & Co., Salvatore Ferragamo and Christian Louboutin.
The disparity provides another example — albeit a rarefied one — of how the collapse in the real is rippling through the nation's economy. Prices of many imports, from mobile phones to wine, have surged because of the weak real, adding to economic angst as Brazil heads for its worst recession in a quarter century.
But many high-end items have actually gotten cheaper in dollar terms because of a quirk of the luxury-goods industry. Louis Vuitton, Prada and many others don't adjust prices very often, and many tolerate narrower profit margins in Brazil to partially offset high import levies and sales taxes.
“It's truly a momentary phenomenon,” said Nadya Hamad, the manager of a Louboutin shoe store at the JK Iguatemi mall in Sao Paulo. “We used to get complaints about how much more expensive things were here. Now our customers are coming in saying how much cheaper it is.”
How much cheaper? A tour of a few malls found that among almost two dozen high-end items, 19 are cheaper here than in New York, with the savings ranging from a few dollars to about $1,000 on a pair of Louboutin crystal-encrusted New Very Riche Strass stilettos. Other bargains included Ferragamo ties, Tiffany watches, Prada wallets and Louis Vuitton purses.
The only outlier was Rolex, which has been adjusting prices in Brazil monthly, according to Nelson Semeoni Junior, owner of the Monte Cristo jewelry store at the JK mall.
The real has fallen 24% against the dollar this year, making it the world's worst-performing major currency, as prominent business and political figures have been swept up in the graft scandal that began with the nation's state-run oil company. The real, which reached 1.54 per dollar in 2011, rose 0.6% Friday to 3.4978 at 9:58 a.m. in Sao Paulo.
BRAZIL'S JET SET
It's a remarkable turnabout from early this decade, when a strong real turned affluent Brazilians into globe-trotting consumers. Back then, many would fly to New York or Miami to shop. Even including the cost of airfare, Brazilians could get deals by avoiding import levies and sales taxes that can double prices at home.
Today in Sao Paulo, the deals are hit or miss. Bargains are concentrated in ultra-high-end shops — and they aren't likely to last. Representatives for the various companies declined to comment.
Sales clerks at Cartier, Louboutin, Louis Vuitton and Prada are warning customers that prices probably will rise soon.
“We've been trying to keep prices as is for as long as possible,” Louboutin's Hamad said. “But we're very likely to raise them, sooner rather than later.”