Article: Real Luxury Is Back

[beaumonde]

WSJ

Real Luxury Is Back

Posted By Robert Frank On February 13, 2009 @ 9:19 am In Luxury Goods | 27 Comments

So-called luxury-goods companies are getting clobbered.

You can see it in the earnings of Christian Dior or Richemont, or the empty aisles of Saks and Nieman Marcus. As if the economy weren’t bad enough, wealthy consumers are allegedly suffering from “luxury shame,” feeling guilty about paying $5,000 for a handbag while Rome burns.
Luxury, in short, is dead.

Or not.

A new survey from Prince and Associates shows that true luxury — goods that are rare, expertly made and sold to a select few — may be making a comeback. And the truly rich couldn’t be happier.

The survey, which polled 108 private jet owners with a mean net worth $116 million, found that 94% of those surveyed defined luxury as “for oneself,” rather than for the masses (2.8%). That marks a big change from last year, when 37% agreed that luxury should also be for the masses.

What’s more, 92% said they feel no guilt over luxury spending today, since they said the money was hard-earned. (So much for luxury shame among the jet set). And 73% said a true luxury brand is a reward for being elite.

“What you’re seeing is a shift to real elitism,” says Russ Alan Prince, the president of Prince Assoc. “The rich like it better that everybody can’t be part of the luxury boom anymore.”

Mr. Prince said the fall of the so-called mass affluent or “trading up” crowd could returns luxury its roots — selling super-crafted, little-known status to a select few. Needless to say, Tiffany charm bracelets, though labeled as luxury, convey about as much status as a mood ring.

“Luxury is becoming luxury again,” he said. “I say we’re entering a luxury Renaissance.”

Granted, even the superrich have cut back, with most in the survey saying they plan to spend less on luxury goods. But they plan to buy fewer goods of higher quality, rather than scrapping luxury altogether. Fully 82% said they plan to make fewer purchases, but 72% said they plan to make “more upscale” purchases.

In other words, if you’re Hermes or LVMH, you’re going to do better in the coming months than Burberry or Coach.


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Article printed from The Wealth Report - WSJ.com: http://blogs.wsj.com/wealth

URL to article: http://blogs.wsj.com/wealth/2009/02/13/real-luxury-is-back/

 

[plum blossom]

Thanks for sharing.

 

[Purse-o-holic]

Interesting article. This is what stood out to me.

true luxury — goods that are rare, expertly made and sold to a select few — may be making a comeback
hmmm, when you put it that way, NOT a lot of brands would fit into this definition.

“The rich like it better that everybody can’t be part of the luxury boom anymore.”
Really? How accessible was Hermes to begin with?

Needless to say, Tiffany charm bracelets, though labeled as luxury, convey about as much status as a mood ring.
Ouch. and Im not even a Tiffany person.

 

[Ammietwist]

I would agree with that up to a point, but if I had REALLY serious money, I'd be searching out the truly exclusive boutique brands. The type of brand that has only a few outlets, if not just the one, and they make what they can produce and no more because they don't want to run a massive factory.

 

[miss oinky]

Thanks beaumonde for sharing, yet another very interesting article

 

[hermes_lemming]

^ ITA. Many thanks and please keep them coming.

 

[sarah2808]

I look forward to reading the interesting articles you post, TY for sharing.

 

[Sammyjoe]

Another great article, thanks for sharing BM!

 

[chaz]

Interesting article. This is what stood out to me.

true luxury — goods that are rare, expertly made and sold to a select few — may be making a comeback
hmmm, when you put it that way, NOT a lot of brands would fit into this definition.

“The rich like it better that everybody can’t be part of the luxury boom anymore.”
Really? How accessible was Hermes to begin with?

Needless to say, Tiffany charm bracelets, though labeled as luxury, convey about as much status as a mood ring.
Ouch. and Im not even a Tiffany person.

Ouch indeed! I don't have any Tiffany pieces,but I know girls who do and really covet them,and maybe they aren't incredibly expensive but they still aren't cheap!

 

[chaz]

Very interesting article,thank you so much for taking the time to post BM!!

 

[chaneljewel]

interesting article..thanks

 

[lilpicotin]

Thanks for the post, beaumonde!

Funny thing is, I never used to equate luxury with exclusivity... (as in "exclusive to certain classes of people" vs. "special and rare" as a treat...) and I only really started thinking about it when I began buying into Hermes...

why does treating yourself to something excessive and nonessential have to be a status symbol? But that seems to be what the article suggests: that "real" luxury means exclusivity, a status symbol of your superlative wealth. I feel like what it's almost suggesting is that real luxury can't exist without a really wide gap between the rich and poor ... when there's a narrow continuum of wealth with a robust percentage of people in the middle, there's a lot of shopping for higher-end goods. now that the continuum has spread and emptied out in the middle, as what recent (other) articles seem to suggest, "luxury" as defined by exclusivity can exist again. I like the idea of luxury, but I'm not sure I like the idea of a widening disparity in socioeconomic classes...

anyway... that's me talking out of my butt early in the morning.

 

[lisawhit]

beaumonde, I love the articles you find! Thankyou

 

[mooks]

Another interesting article, thanks for posting BM!

 

[Gracemnot]

Thanks for the post, beaumonde!

Funny thing is, I never used to equate luxury with exclusivity... (as in "exclusive to certain classes of people" vs. "special and rare" as a treat...) and I only really started thinking about it when I began buying into Hermes...

why does treating yourself to something excessive and nonessential have to be a status symbol? But that seems to be what the article suggests: that "real" luxury means exclusivity, a status symbol of your superlative wealth. I feel like what it's almost suggesting is that real luxury can't exist without a really wide gap between the rich and poor ... when there's a narrow continuum of wealth with a robust percentage of people in the middle, there's a lot of shopping for higher-end goods. now that the continuum has spread and emptied out in the middle, as what recent (other) articles seem to suggest, "luxury" as defined by exclusivity can exist again. I like the idea of luxury, but I'm not sure I like the idea of a widening disparity in socioeconomic classes...

anyway... that's me talking out of my butt early in the morning.

ITA the widening disparity between the haves and the have nots is bad, bad, bad. Even if it means no Hermes, I'd like to see it narrowed. Just ask Marie Antoinette!