Even rich people may need to rein in spending as the global economy wavers

Gary Friedman, CEO of a high-end furniture retailer Rh (Rh)It said on its earnings call last week that “we have experienced a decline in demand in the first quarter that coincided with the Russian invasion of Ukraine in late February and the market volatility that followed.”

“I don’t think anyone really understands how high prices are going to be everywhere, in restaurants, in cars and everything,” Friedman said, adding that those increases will hurt all consumers and that businesses like his they’re going to be in a “complicated space”.

The actions of RH, which Warren Buffett Berkshire Hathaway (BRKB) owns a stake, mired in cautious commentary and the weakest prospect.

Other companies that cater to wealthier consumers are also beginning to warn that demand could take a hit from all the worrying headlines.

“The market is experiencing unprecedented volatility due to the heightened impacts of a number of macroeconomic and geopolitical challenges. These include the war in Ukraine and inflationary pressures, affecting both our own business and general consumer spending,” he said. Stefan Larsson, the Director of HPV (HPV)owner of the Tommy Hilfiger and Calvin Klein brands and licensee of the Michael Kors and Kenneth Cole New York brands.

Larsson added that the company “will continue to navigate against pandemic headwinds, particularly supply chain and logistics delays, especially in North America, in addition to recent virus outbreaks in Asia.”

But some Wall Street analysts are still optimistic that luxury companies will continue to do well.

“Luxury brands should outperform as they will likely continue to have pricing power, keeping margins high, and could see a boost if international travel returns to pre-pandemic levels,” Zachary said. Warring, an analyst at CFRA Research.

Warring specifically cited the expensive parka maker canada goose (GOOS) and sportswear giant Lululemon as two companies that could do well even if inflation concerns persist. Lululemon (LULU) shares soared last week after the company reported strong earnings.

Concerns about a major slowdown in the US could also be overblown.

“We still don’t buy the gloomy scenarios for luxury,” Erwan Rambourg, HSBC’s global head of retail and consumer research, said in a report last week. “We are surprised to hear of dire sales decline scenarios in the US, given continued evidence of a healthy appetite for luxury brands.”

Ramburg said that LVMH (LVMHF), the luxury goods giant that bought Tiffany early last year and also owns Louis Vuitton and Dior, should impress investors when it reports earnings later this month. Rambourg said sales in most parts of the world should be strong, with the notable exception of China.

“The only market for which we expect moderation in growth to be a little visible is mainland China,” Rambourg added, noting that Covid-related lockdowns could hit luxury demand there.

But Rambourg also did not rule out the possibility that a global market and economic downturn would ultimately affect luxury sales. He said in the report that a recession, a steeper drop in share prices and a protracted conflict in Ukraine are the key risks facing high-end consumer companies.

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