Economics
Although millionaires reportedly “no longer feel wealthy”, they also feel optimistic that the economic situation from next January will be much brighter.
The millionaire mentality is that “today’s problem as tomorrow’s opportunity” and they are seeking to benefit…
Using a scale ranging from minus 100 as the worst to 100 as the best, the survey found that high net-worth individuals have a minus 50, or “very weak,” view of the economy right now. But when asked where things will be next January, the grade rises to a positive 18. — (Via Associated Press)
Economics
Well-managed luxury brands are still bucking the economic downturn, and many are in very good shape…
Prada announces a sales jump of 66% — (Via Bloomberg)
Christian Louboutin - “the foremost shoe designer in the world” - prepares to open 6 new stores — (Via Time)
Dior jumps 11% in Q1 2008 — (Via Capital.fr)
Harry Winson jumps 22% — (Via Diamonds.net)
Champagne boom sends Krug prices soaring — (Via Telegraph, UK)
And the signs grow that Wall Street is turning into a luxury mall…
Luxury units dominate the building pipeline as the area’s occupants get older and wealthier. The median income for Lower Manhattan residents has increased 47 percent to $163,000 since 2004, and is now nearly three times greater than the median Manhattan household income. — (Via Portfolio<)
Economics
The on-going stream of stories about the recession is encouraging journalists to find ever more inventive angles with which to tell the story.
UPI reports on a man called George Esquivel who believes that $40,000 shoes are recession proof (Via UPI)
An unexpected casualty of an uncertain economy - Inuit art (Via Maine Antique Digest)
Happily, cosmetic surgery holds solid (Via CNN)
The Luxury Institute recommends the rather obvious “respecting customers” as a recession tactic, which sets up the interesting prospect of being able to abuse them during boom times. (Via Diamonds.net)
And, in the most literary response to the recession, The Telegraph in London warns that Madame Bovary would have been a terrible financial advisor in difficult economic times, and gives handy wardrobe tips… (The Telegraph, UK)
Economics
The launch of a diamond-studded credit card was perhaps an inevitable development of ‘luxury creep’ into all aspects of culture, and is another example of the new business model for the banking industry (see ‘Banks become consumer-focused asset managers‘) but it carries a kind of post-modern appeal; the credit card as status symbol has become credit card as luxury object in itself…
“The card is handcrafted and only nine cards are produced in a day. The manufacture involves 36 processes from metal casting to diamond setting by a jeweller.”
Currently only available in Dubai, and strictly by invitation only for “a privileged few”…
“More than the income level, we look at prospective card holders as people who must possess the right criteria in terms of social standing and profile. People who meet these attributes are then invited to enjoy the benefits of our Royale card.” — (Via Business 24/7)
Expect MUCH more of this in months to come…
Economics
The banking industry is beginning to evolve its business model from capturing, to managing, client money, with various strategies aimed at putting the high-net worth consumer at the heart of the relationship.
Citigroup has just created a new consumer segmentation into ultra-high net worth clients, high net worth clients, and “emerging affluent” clients — (Via The Guardian, UK)
Mastercard focuses on the creative interests of its consumers in a collaboration with auction house, Sotheby’s — (Via US News)
Capital One launches an obvious, but surprisingly innovative, to put consumers designs on its credit cards — (Via Capital One)
And today, Coutts & Co., the bank that has gone the furthest to move from banking model to asset management model, was awarded for its sponsorship of the arts — (Via BusinessWire)
Economics
Coutts & Co., the bank of high-net worth investors in the UK, has calculated that the cost of expensive living far outstrips mainstream purchases; and predicted that - among the super-wealthy - spending on luxury goods will continue to rise.
Prices have risen among a wide range of ‘key’ luxury indicators, including Patek Philippe watches (+27%), and Range Rover (+20%).
Most of the country are paying 2.1 per cent more for their food, services and goods than a year ago. However, the super-rich have been hit by an inflation rate of 9.5 per cent as the trappings of a rich lifestyle become ever more expensive.
While most people have been fretting about the rises in their weekly food bill, those with a taste for Beluga caviar have seen the cost of a kilo increase by 28 per cent to £2,300.
The number of those considered wealthy has risen very quickly, thanks to booming economies in China, India and Russia. That has left more people chasing the same number of luxury goods. — (Via The Telegraph, UK)
Economics
A boost for the luxury sector on Friday, when HSBC bank delivered a an optimistic report on the future of luxury. Most notably, the bank seemed to echo sentiments expressed elsewhere that the top end of luxury would continue to grow, and be largely unaffected by the increasing pressure on ‘new’ / mass luxury brands.
As part of the report, HSBC upgraded its outlook on Hermes, and Bulgari.
Consumers in Eastern Europe, the Middle East and Asia excluding Japan should add about 6 percent to global growth in sales of luxury goods in 2008, HSBC analysts Antoine Belge and Erwan Rambourg wrote in a note today.
HSBC cut its forecast for the industry’s “organic” sales growth this year to 9 percent from 10.5 percent and lowered its 2008 and 2009 earnings estimates for luxury companies by 6 percent as a result of the subprime mortgage crisis and a spreading consumer slowdown. The bank still expects luxury-goods makers to increase earnings before interest and taxes this year.
– (Via Bloomberg)
Economics
Today Marriott Hotels announced details - and the name ‘Element’ - of its bold trade-up venture with Ian Schrager; in a joint press release Marriott CEO announced the collaboration as “”a magical combination” (Via Marriott International)
Saks Fifth Avenue trades down (a bit) to create a new mass affluence project describes as “luxury in a loft environment” (Via MediaPost)
Ghirardelli chocolate announces a trade-up venture of a now-rather-familiar “everyday indulgences” variety. (Via EarthTimes)
Diesel trades up with new high-end brand, Black Gold, to launch next week at New York Fashion Week (Via DieselFreak)
Carlsberg trades up outrageously, at $400 a pop (Via Bloomberg)
And Marmite trades up magnificently beyond its worth, with a $300 sandwich spread (Via Ananova)
Economics
A round-up of confidence and nervousness among major luxury brands as nervousness grows about the fading economy… The consensus seems to be optimism among higher brands that this is just a slowdown, but a growing sense at the masstige end of the market that they should be adapting strategies to weather a potential recession…
Burberry “suffering” (Via BrandWeek)
Cartier “safe” (Via BrandWeek)
Coach “we are not immune” (Via WSJ)
Dior couture “up strong double digits” (Via Portfolio)
Ermenegildo Zegna “falling short” (Via WSJ)
PPR “not affected… healthy… better prepared than ever” (Via Reuters)
Richemont “slowdown” (Via WSJ)
Saks “feeling good… healthy” (Via Marketwatch)
Tiffany “declining” (Via Portfolio)
Tods “a cold, but not pneumonia” (Via Reuters)
Tommy Hilfiger “feeling the pinch” (Via The Times, UK)
Gold and platinum “historic highs… lifetime high” (Via Reuters)
And the hedge winner in all of this, Ted Noten, who has taken a Market Price approach to sales of his gold necklaces, with the value shifting each day. So, wherever the market goes next, he stands to make sales… (Via TedNoten.com)
Economics
7 strategies to cope with the economic downturn, courtesy of The Luxury Institute
1. Eliminate the Hobbies: Renew your focus on what you do best and innovate within those categories.
2. Go Up-Market Right Now: Focus on going up-market with bespoke, one-of-a-kind, custom-made, made-to-order, limited edition product and deliver service to match.
3. Innovate and Dare to Be Different For a Change: If luxury has any claim to fame, it is in innovation and novelty. Demand innovation and you will get it.
4. Leverage your PR, not your Advertising: Public relations is a far more effective and credible vehicle for persuasion of key constituents than is advertising.
5. Deliver Extraordinary Experiences: Extraordinary customer experiences are delivered not with gimmicks and props, but by talented, caring people who connect with customers one-to-one
6. Innovate Online: Now is the time to use this rich channel to reach global wealthy consumers no matter where on earth you happen to be located.
7. Let the Voice of Your Customer be Your Guide: Inject the voice of the wealthy consumer into your strategy sessions.
