Sales Rank as Private, First Class

The guest lists are strictly hush-hush. Invites go out over e-mail or by word-of-mouth to celebs, Hollywood D-girls, fashion insiders and others in the know who enjoy the privilege of being able to sip champagne and shop for designer duds discounted as much as 80% off wholesale prices. The hippest place to shop this holiday season isn’t any store, it’s the private sale.

At downtown’s artsy Cafe Metropol, Jennifer Levine pored over piles of Sarah Shaw handbags. “It’s a shopping social combo,” gushed the raven-haired talent manager who was catching up with some college buddies at the Help Shop benefit sale. With three totes slung over one wrist, she was just getting started on some big-time shopping.

Across town at the Billion Dollar Babes and Blokes sale at Quixote Studios, Melanie Kevorkian pawed through Jimmy Choos with a cell phone in one hand and three shoe boxes in the other. On the table in front of the 25-year-old associate producer, open boxes of cashmere ankle-strap pumps, rhinestone-studded stilettos and beaded fabric mules were as tempting as double chocolate truffles. “I can’t believe the prices,” she said of the favored footwear of the “Sex and the City” set. The shoes were marked down to $100 to $200 from the retail prices of about $400 to $600.

This year more than ever, social calendars are crowded with reminders about private sales. “They’re the shopping equivalent of going to a members-only nightclub or eating at the hottest restaurant in town,” said Marlien Rentmeester, 31, the West Coast editor of Lucky.

With the economic fallout from the Sept. 11 attacks after a weak spring season, fashion designers not only have samples to get rid of, but also an unusual amount of excess merchandise because of canceled and returned store orders. Private sale organizers, many of them publicists, have seized the opportunity to stage exclusive shopping events featuring multiple labels. Many designers would rather offload pieces in a timely fashion to the well-heeled, than to have to resort to the clearance racks at Ross. As the private sale phenomenon grows, not everyone, however, is pleased, especially retailers.

Longaberger Baskets, Tupperware, Avon and Mary Kay have used the private sale as a marketing tool for years, but the recession is helping to take it from the masses to the upper classes. “It’s the perfect marketing method for the time we live in,” said Pam Danziger, president of Unity Marketing in Stevens, Pa., and author of the upcoming book, “Why People Buy Things They Don’t Need.” Shoppers have the comfort of knowing they are buying from someone they can trust, who is not just trying to sell them something, and people don’t have to go to the malls, “where it has become suddenly dangerous,” she said.

Shopping soirees are being held everywhere from private homes to studio spaces, and range in size from the small and intimate, to the large and warehouse-like. Many have charity tie-ins, providing tax write-off opportunities for designers and customers. For Help Shop, organizers Sara Dee, 35, and Susan Paley, 36, asked designers to donate 10% of their proceeds to Broadcast Girls and Chrysalis House, two nonprofits that work with disadvantaged women.

Other events are strictly business, with organizers taking a cut of sales. The Planet Lulu sale, first held last year, has grown into a monthly downtown Fashion District event. The bimonthly Billion Dollar Babes sale, which is one of the few to feature menswear, has a similar setup. It’s organized by two Aussie expats, Shelli-Anne Couch, 32, and Kate Nobelius, 26, who own a L.A. public relations firm. They pride themselves on offering the cream of the fashion crop at drastically reduced prices. They say they are able to wrangle the merchandise through “connections.” The most recent sale held at Quixote Studios featured purses and wallets from Fendi and Burberry, three-quarter-length coats from Mayle and Tocca and the mother lode of Jimmy Choos.

Control is key to maintaining brand cache, so one might think a luxury label like Jimmy Choo wouldn’t want to be associated with a clearance sale. “That was my first concern,” said Marilyn Heston, the company’s L.A. spokesperson. Then she found out who would be attending. “This isn’t just open to the general public,” she said. “It’s well attended by stylists, actors and members of the press who are all in our milieu. The demographics are completely suitable.”

Exclusivity is part of the appeal for shoppers, too, according to marketing analyst Danziger. “There’s the feeling that you’re on the inside because you are entitled to this special, private information, and that sets you up to want to prove how special you are by buying a lot of stuff,” she said.

The sales appear to be a win-win for everyone. Event organizers make a profit (or give proceeds to charity), shoppers get bargains and designers rid themselves of excess merchandise.

Still, some designers’ profits have been underwhelming. “People just aren’t spending like they used to, even if you give them cheap prices,” said L.A.’s Estevan Ramos, 40, who has participated in three private sales this season in addition to his usual end-of-year showroom sale.

Retailers bristle at the whole concept of private sales.

“I hate them,” said Tracey Ross, the Sunset Plaza retailer who caters to the rich and famous. “They’re trying to sell things for practically half off the retail price. It’s quick money for designers who have had their orders canceled and are stuck with merchandise, but a lot of them don’t see how they’re cutting off their nose to spite their face. I wouldn’t put a designer who had participated in one of those sales in my store.” Not to mention celebs who “can afford to pay retail” have been known to shop at private sales, Ross said.

Some designers are sensitive to the situation. “I would never want my stores to find out I was doing this,” said Erin Lareau, who sold her crystal studded computer mice, place-card holders and movie camera-shaped purses at Help Shop.

To keep from alienating retailers, Terry Putz will only sell samples from her Orson’s Place line of handbags made of vintage cigar boxes. The purses retail for about $190, the samples were $95 at Help Shop. “I don’t even give prices for my bags on my own Web site,” she said at Cafe Metropol. “I refer people to a store that stocks my line.”

Handbag designer Sarah Shaw said she makes pieces specifically for private sales out of scraps of fabric leftover from her main line. “So I don’t compete,” she said.

Clearly customers couldn’t care less about the fashion politics. In a full-on shopping frenzy at Billion Dollar Babes, April Petrine, 23, an intern at a record label, stopped scouring a rack of Rebecca Taylor separates just long enough to sling a dress over her shoulder and say, “This event is all about women. It’s women gone wild!”