Companies that market "affordable luxury" items such as pricey handbags and jeans are feeling the effects of the housing slump, rising fuel costs and other economic factors that are driving consumers to rein in spending. Tiffany & Co., Coach and Nordstrom have all reported sluggish sales. "You had a lot of people who graduated to a level of consumption they could not really afford," Adrianne Shapira, a retail analyst at Goldman Sachs, said. "Two-hundred-dollar pairs of denim were plausible when home values soared, but now $100 jeans are looking more reasonable."

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