THE POST-CHRISTMAS

sale is in full swing.

Prices of most retail stocks got slashed last week after retailers reported their worst December results since 2002. So much for all those upbeat forecasts after "Black Friday" and anecdotal tales of shoppers thronging the malls and ordering on web sites. This week we learned that December retail sales actually declined 0.4%

Shares in high-end retailers, the ones whose customers were supposed to be immune from the multitude of woes now afflicting the average American consumer, were especially hard hit. Tiffany & Co. lowered its forecast and luxury bellwethers Nordstrom and Saks reported less-than-stellar results. Tiffany hit a new low for the year, and at a recent $35, its $22 off its peak in October. That's a discount you won't find on its Elsa Perretti necklaces.

I warned about problems for the high-end consumer in my Nov. 27 column, and if anything, their problems have only intensified. True, they may not be that concerned about gas prices. But they certainly do care about the value of their stock portfolios and real estate (often highly leveraged), both of which have been suffering. This puts quite a chill on the so-called "wealth effect," which I suspect accounts for more high-end discretionary purchases than is often recognized.

I realize it's hard to generate much sympathy for a group that spends more on jewelry and art than most households earn in a year, but based on what is admittedly anecdotal evidence, many of them are strapped for cash and have been living beyond their means for years. They paid exorbitant sums for primary residences, as well as second and even third homes on which they have multiple jumbo, nonconforming first and second mortgages. Add in the car payments, the private school tuitions, the insurance to cover all that art and jewelry, and they have fixed monthly payments that would make most of us feel faint. Even as the subprime crisis morphed into a credit crunch, these people kept spending, as if denial would somehow stave off a slowdown that might actually affect them. Some of them are now in financial trouble. American Express reported that even high-end Platinum cardholders were falling into delinquency last month. Where are these shoppers cutting back on their shopping? Not at Wal-Mart or Costco.

But here's the thing about American consumers, and especially the rich ones: Sooner or later, they always come back. If you look at long-term charts for these stocks, you'll see that most are not for the buy-and-hold investor. Take Tiffany. Since 2000 it's traded in a range of about $20 to $57. Its major buying opportunities came in October 2001 (in the midst of the post-Sept. 11 recession) and October 2002 (the low point of the tech meltdown), when the stock was near $20. Nordstrom has performed much better over recent years, proving it to be a better long-term holding. Still, the trading pattern until the latest bull market is pretty jagged, with the same buying opportunities in 2001 and 2002, when the stock was under $10 (adjusted for splits). I wouldn't expect any of the luxury retailers to reach such low points again, but the record suggests that they bottom out at the deepest point in a recession.

Are we there yet? First, we don't even know if we're in a recession. Only with benefit of hindsight will we know the perfect time to buy these stocks. What we do know is they're substantially off their highs. Someday, in another bull market, when consumers are feeling flush and no one's wringing their hands over an imminent recession, they'll hit new highs again.

Coach and Polo Ralph Lauren are two others that just got downgraded). But a luxury purveyor I find intriguing and have wanted to own is LVMH Moet Hennessy. This Paris-based luxury conglomerate owns more than 60 luxury brands (the initials stand for Louis Vuitton, the leather goods maker, and Moet Hennessy, the champagne and cognac producer), which include Donna Karan, Marc Jacobs, Parfums Christian Dior, Givenchy, and Glenmorangie, to name a few prominent examples. If you're going upscale, you can't get much loftier than this. I see it primarily as a play on growing wealth in emerging markets, and, as a French company, it's a play on a weak dollar. Let's hand it to the French: They wrote the book on luxury brands. Though LVMH isn't immune to the affluent U.S. market, its products have huge global appeal. I was on a Cathay Pacific flight from Hong Kong to Beijing some years ago where many LVMH brands were being offered for sale. There was a near-frenzy among newly affluent Chinese to buy them.

Here's a minor catch: LVMH primarily trades on the Paris CAC and is very thinly-traded over-the-counter in the U.S. I wouldn't recommend something the average investor couldn't buy, so I placed an order for 100 shares, which was executed at $105 without any trouble.

Though even I can be tempted by a sip of premium Scotch or Champagne, as a consumer I'm not inclined to pay a premium for status brands. But I'd be happy to share some of the profits from those who do.