So they gave the drive a makeover, the first significant upgrade in more than a decade for one of the world's most high-profile shopping districts.

With the work nearly complete, Rodeo Drive appears to be attracting more wealthy customers and high-end stores just as nationwide luxury sales and tourism are rebounding with the economy. The trend was reflected in a 40 percent jump in early holiday sales.

"When you come here, you're purchasing an experience," said Ali Soltani, vice president of the David Orgell jewelry store. "So long as we maintain our mystique and provide that special experience, that twinkle in the stars, Rodeo Drive will always be pre-eminent."

The $18 million facelift began last summer at a time when sales were declining and several high-end stores had given way to shops that perpetually pushed sale items.

Classic palms replaced ficus trees along the street, which stretches for nearly three blocks. Sidewalks were widened and crosswalks were added to attract people who like to stroll while they shop. Nearby streets that form the so-called Beverly Hills business triangle will get similar treatment.

In September, the Rodeo Drive Committee, a business group, inaugurated the Walk of Style to boost the street's image as a fashion destination. Italian designer Giorgio Armani was the first honoree. A shiny, 14-foot sculpture of a torso by artist Robert Graham serves as a symbol of the new attraction.

Shopper reactions are mixed.

"It's so elegant and nice here," said Annie Mann, a visitor from Atlanta. "I feel comfortable going into any store."

But Mimi Taiwo, a resident of Connecticut, wasn't impressed.

"In Paris, you have nice sidewalk cafes, beautiful flowers and more street life," she said. "This to me is very plastic."

Recent sales figures suggest business is picking up, and strong results were expected through the holiday season, said Todd Steadman, director of economic development for the Beverly Hills Chamber of Commerce.

Meanwhile, average monthly retail rents on Rodeo Drive jumped from $220 to $262 a square foot in the last year, making it the sixth most expensive shopping district in the country, according to a report by Cushman & Wakefield, a real estate services firm.

Fifth Avenue in New York ranked first, with shopkeepers paying an average of $850 per square foot.

The survey of 223 worldwide shopping locations showed a consistent rise in rents, suggesting a comeback in luxury sales. Retailers and analysts credited low interest rates and stock market gains as factors prompting well-heeled shoppers to splurge again.

"I plan to spend more this year," shopper Robin Woo said after buying a $1,000 cashmere turtleneck sweater at the Gucci store on Rodeo Drive. "I'm doing well enough to feel this purchase is OK."

A weak dollar also is drawing many overseas travelers to America's expensive shopping destinations, said Faith Consolo, vice chairman of the Garrick-Aug Worldwide retail leasing company.

"Shop 'til you drop is back," Consolo said. "People are buying $700 shoes like it's popcorn."

Responding to the recovery, Louis Vuitton and Cartier are expanding their stores, diamond dealer De Beers plans to open a store next year, and construction is under way on a Prada store designed by architect Rem Koolhaas.

Fred Hayman, who named a perfume after his legendary store on Rodeo, believes the street is regaining the image it enjoyed in its heyday of the early 1960s, when he opened his shop.

"We had a bar with bartenders, a yellow Rolls Royce to pick up customers and deliver things ... I put in a pool table, and Sinatra would come by and play pool," said Hayman, now 78 and retired.

In this age of well-guarded celebrities, megastars are unlikely to play openly on the street. But Hayman, who strolls the street every day with his two dogs, does hope to see more sidewalk cafes, brilliant window displays and street life.