Luxury Items in Short Supply

Luxury retailers that have cut their inventories this season are already selling out of hot items, the New York Times reports. High-end stores, like Neiman Marcus and Saks (SKS), are treading carefully this holiday season, aware that consumer spending hasn’t yet bounced back entirely. Instead of luring shoppers with discounts—which can taint brand perception and cut into profits—the latest strategy relies on exclusivity. The paper says, “By carrying fewer goods and selling them at full price, Saks is essentially telling customers: buy it now or live without it.”

Money left over from the $700 billion financial bailout may be used to reduce the federal debt, the Washington Post reports. The paper says, “Administration officials are grappling with how best to announce the extension of the Troubled Assets Relief Program at a time when the economy is struggling and the unemployment rate is at its highest point in 26 years. The officials are hoping that by putting roughly $200 billion toward paying down the $12 trillion national debt, they could mitigate the political fallout, the sources said.” The administration is still figuring when it wants to tell everyone that it may extend the "unpopular" program, and there’s still some in-fighting over where the funds will end up. While some officials are pushing to put the money toward small-business programs to encourage new jobs, others inside the White House are feeling pressure “to show it is serious about reducing the nation's deficit.”

Some drug companies might be raising the prices of drugs to offset the future costs of the proposed health care reform, and legislators are not happy about it. The New York Times reports that congressional Democrats are involved in “two separate investigations” of drug-industry pricing to figure out whether pharmaceutical companies have been unfairly bumping up costs to consumers. In a letter directed to the Government Accountability Office, they wrote, “Recent studies have indicated that the industry may be artificially raising prices for certain pharmaceutical products in expectation of new reforms. ... Any price gouging is unacceptable, but anticipatory price gouging is especially offensive.”

Italian confectioner Ferrero, famous for its gold-wrapped chocolates, has said that it may make a competing bid against Kraft (KFT) for Cadbury (CBY). The Wall Street Journal says that in making the move, Ferrero is “throwing itself into a high-profile, international corporate battle, switching gears from the insular style that has guided the company for more than a half a century.” The paper adds that Hershey (HSY) has been in contact with Ferrero about “teaming up to buy Cadbury” but that Ferrero still has “a number of options” beyond that. BusinessWeek weighs in, mentioning that Hershey may push hard on the partnership because it will do what it takes to beat out Kraft. The article says, “One could argue that Hershey, because it is so dependent on U.S. sales, really needs Cadbury.”

If you had a Sony (SNE) e-reader on your Christmas list, better not get your hopes up. While the electronics company had aimed to have the product available for the holiday season, it has now said that the device won’t be shipped until sometime between Dec. 18 and Jan. 8, according to the Wall Street Journal. Even those dates are not “guaranteed,” the company has admitted, which makes the product a risky present. Barnes & Noble (BKS) will be shipping out its e-reader, called Nook, by Dec. 18, just barely in time to arrive by Christmas. The situation bodes well for sales of the Kindle, which according to Amazon (AMZN) is in stock and ready for immediate shipment.

Finally, Old Navy is turning a new page, the Wall Street Journal says. The retailer, which is a more affordable division of Gap (GPS), “is starting to pull its own weight again.” Old Navy contributed 41 percent of Gap’s sales last year and is expected to post a strong performance when quarterly earnings are announced today. This all comes as a turnaround for the retailer, which has struggled to define itself in recent years. “The problem, analysts and Gap executives say, is that the retailer has been stuck between two trends of bargain shopping. Big-box discount stores use their size to offer families low prices on basic items. Fast fashion retailers pump out inexpensive knockoffs of the latest styles,” the paper explains. Instead of chasing the latest trends, Old Navy is winning more customers by returning to its roots: T-shirts and fleece.