A year ago today, the opening of a lavish new Tiffany & Co. on Wall Street was literally accompanied by fanfare—as well as champagne, models clad in the jeweler's trademark blue, and gift bags containing sterling silver Tiffany Wall Street key chains.

The Dow Jones industrial average was soaring toward 14,000, and the Fifth Avenue stalwart wanted a jolt of Wall Street excitement and some more of those big bonus bucks. The time seemed ripe to join Hickey Freeman and other luxury stores that were sprouting in what had been an upscale retail vacuum.
 
Tiffany enlisted Louis Vuitton boutique veteran Yabu Pushelberg to redo an 11,000-square foot space in a former bank building at 37 Wall Street. Since the store had to be ready in time for the holiday season, when retailers ring up most of their profit for the year, crews worked double shifts for weeks, installing imported marble steps and floating walls made of museum-quality glass. The cost: More than $20 million, according to sources with knowledge of the project.

"It was expensive," a Tiffany spokesman admits.

In the past few years, Tiffany and tony cohorts such as Thomas Pink, Canali, and Tumi bet big on what they thought was a hot new growth market. Wall Street was flusher than ever, tourists were flocking to the area, upscale residential developments had brought in new local spenders, and the World Trade Center site was being rebuilt.

But the new Tiffany is marking its first anniversary in the midst of a financial meltdown that threatens to take down Wall Street's retail renaissance. A global economic crunch is choking the wallets of financiers and tourists, and delaying the W.T.C. rebuild yet again. Brokers say new deals, including Apple's long-rumored interest in 23 Wall Street, are being called off or put on hold. Sales are already softening at downtown boutiques just as the all-important holiday shopping season gets underway, and the outlook is grim.

"The retail establishments who opened recently on Wall Street in an attempt to take advantage of the growth and resurgence there are in deep trouble," said Harry Bernard, co-founder of San Francisco-based fashion industry marketing and consulting firm Colton Bernard.

The financial district's luxury pioneers took on exceptional risks by betting big on downtown Manhattan's fate. The benchmark cost for a store to really wow Wall Streeters ranges as high as $2,000 to $3,000 per square foot. Thomas Pink spent in that range on its space at 63 Wall Street, according to sources, and Hermès may have spent even more. Retailers don't shell out that kind of money unless they have locked in a long-term lease, like the 20-year deal Tiffany inked. An investment of that size, though, means less flexibility to exit a struggling store.