From $500 handcrafted Japanese teapots to $2,000 men’s suits, New Yorkers haven’t been shy this year in spending on the finer things, propelling many of the city’s luxury boutiques and stores to double-digit sales gains, according to retail analysts. The boom is adding millions to the city’s coffers and boosting the bottom lines of high-end retailers both big and small.

One veteran retail sales consultant, Jim Dion of Chicago-based Dionco, said New York City’s unique position as a center of affluence and a global tourist destination was one reason behind the sales gain. “When New Yorkers slow down on the spending, it’s

picked right up by waves of tourists,” he said, noting that even major cities like Boston, Atlanta, and Chicago have vastly more cyclical luxury goods sales. “Globally, only London and Paris have comparable ability to generate sales.”

Mr. Dion, who says he has consulted with many of the largest national luxury retailers, said the luxury sales recovery that began in New York in spring 2002 is really gaining momentum, and he estimated that national luxury retailers like Coach, Prada, and Neiman Marcus have sales increases of 10% this year in New York City.

“New York didn’t have that much exposure to the dot-com boom or crash, so once it was able to move past the shock of September 11, New Yorkers had a lot more per capita purchasing power,” he said, when compared with consumers in other places. Mr. Dion also said sales have been bolstered by the expanding economy, low interest rates, and in particular, robust capital markets.

The willingness of people to spend thousands of dollars on luxury goods adds billions to the city’s bottom line. Last year, from April to September, the city collected $2.73 billion in sales tax; this year, in the same period, it collected $3.15 billion. A Wall Street retail sales research analyst estimated that about 10%, or more than $300 million, came from the sale of luxury goods.

Further, tax revenue from sales represents just one way the luxury market bolsters the city’s economy. The analyst, who spoke on condition of anonymity given his firm’s investment banking relationships with several luxury goods manufacturers, said the city’s luxury retail stores often have what he called “a force multiplier effect.” He said the high demand for retail property in many parts of the city – the Real Estate Board of New York estimated that the average rent on Fifth Avenue between 49th and 59th streets is $717 a square foot – is propelling the current building boom.

“If you look at a Midtown building renovation or construction as costing anywhere from $25 million to $300 million, and you consider the high paying jobs that work on it, it’s pretty clear how much high-end retail supports Manhattan’s tax base,” the analyst said.

Creating the look to complement a brand’s cachet for a retail space can be quite an investment. For example, the high-profile Prada store on Prince Street and Broadway in Manhattan cost an estimated $40 million to open.

Moreover, the Wall Street analyst said the luxury sector traditionally offers the highest-paying retail jobs, generally estimated to pay in the range of $15-$20 an hour.

“It’s not white-collar pay levels, but they are usually hiring, and there is a tradition of promoting from within for management, so there is real opportunity,” he said.

Estimating how many people are employed in the city’s luxury retail industry is not easy, as state or local agencies do not distinguish between mass-market and luxury stores for tax-reporting purposes. Several consultants and executives estimated that if workers at larger, publicly traded luxury retailers like Neiman Marcus and Saks were included, the figure might be as high as 10,000 employees.

Dionco’s Mr. Dion said one recent development over the past few years in luxury sales has been the expansion of what is defined as a luxury item. People are now willing to pay premium prices for quality and cachet in things previously considered mundane, creating new opportunities for specialty businesses.

On place where this is evident is at Liz Lange Maternity Inc., a Manhattan based retailer of high-end maternity clothes and accessories. At the store, custom-made skirts start at $125. Company founder and president, Liz Lange, said sales at her Madison Avenue store are up between 10%-15% over last year for most items, including accessories. “My customers appreciate having choice and quality presented to them, and they have the resources to buy it,” she said. A trade publication estimated that Mrs. Lange’s three stores were making more than $3 million in sales annually.

A manager at the Madison Avenue gourmet tea shop Ito En, Kai Anderson, said sales are up 10% to 15% over last year. A store spokeswoman, Patricia Clough, said the store is briskly selling accoutrements such as hand-crafted pots and cups, which can cost between $300 and $500 a set. Ms. Clough said the store’s imported and hand-cut teas, selling for $10 or more an ounce, are “affordable luxuries.”