7 posts tagged with Economy

Economic problems? Debt ceilings? Political tensions? What are those things? The luxury industry has surely never heard of them, if double-digit sales increases from LVMH, Hermes and Burberry, just to name a few, are any indication. The rich only get richer, naturally, and when they do, they buy clothes. Lots of clothes. And handbags. Louis Vuitton is even reporting waiting lists, a thing that most pundits seemed to think would never be seen again after the economic crash of 2008.

And yet, I put my name on a waiting list myself at the beginning of the year in order to wait for the apparent privilege of buying a bag that cost nearly $2,000. Having been in college during the rococo days of the mid-2000s, the opportunity to queue up to buy an It Bag like the original Chloe Paddingtons and Fendi Spy bags passed me by while I stared in envy at the people who were buying their way into the “ungettable get.” Are we headed back there again? (more…)

Alligators

Something is rotten in the state of Louisiana.

As we all know by now, the luxury market was hit hard by last year’s economic collapse. Despite what some snide fashion-haters would tell you, the industry in fact does affect people at every level of the economy, and Louisiana’s alligator farmers are just the most recent people to feel the pressure as a result of tough economic conditions in the fashion industry, according to The New York Times.

It would follow logically that reduced retail sales have lead to a drop in international interest in exotic skins, of which alligator is among the most expensive, but the farmers tell it a bit differently. According to them, it’s all Hermes‘s fault. (more…)

LV First Tweet

The Internet and luxury have always been sort of mutually exclusive. The Internet is broad, democratic, and welcomes all kinds; it has changed the way that consumers interact with corporations in fundamental ways that are constantly evolving. Luxury brands are narrow, elitist, and target a very specific clientele. They require a bit of mystery and aloofness in order to be aspirational and make their traditional brand identities work, and they’re generally not interested in changing how their companies interact with…well, anyone. “The way it has always been done” is idealized and worshiped in an almost religious way, and even though many below-the-surface practices have evolved in recent years (most notably, manufacturing), the way that brands want you to perceive them has remained largely untouched for decades.

But the problem with this whole Internet thingamabob is that it’s kind of insidious and it’s changing the way that people of a variety of incomes and social standings shop and inform themselves about potential purchases. Fashion shows are no longer private events for an elite group of celebrities, editors, and clients; they’re presentations of goods that can often be seen in their entirety by average customers within minutes of their completion. There may be exclusivity left in the invitation to attend a show, but not in the information that one gains by attending. (more…)

Fashion and the Economy: Bags aren't Investments

As the economy has cratered and more or less stayed that way, we have begun to hear more and more from designers (and their PR companies) about the new way we should be looking at fashion – as an investment in our futures. People have used the “investment” excuse to justify the money they spend on bags for years, but as conspicuous consumption of luxury good contracts at an even greater rate than across-the-board retail spending, brands and their mouthpieces have looked to the word as a possible way to pry the remaining dollars out of consumers’ wallets. Lesley Blume of Slate‘s finance blog The Big Money has the breakdown on exactly why the fashion-as-investment logic just doesn’t hold. (more…)

Hermes StorefrontI can’t decide if this news is counter-intuitive or not, but Forbes is reporting that Hermes will post an increase in sales during the first quarter of 2009, a time when many retailers and brands were feeling a big-time sales crunch. Why is that?

Well, the sales increase isn’t worldwide. Sales fell modestly in Europe and experienced a double-digit decline in luxury-goods-obsessed Japan, but the brand saw increases large enough in non-Japanese Asia to more than make up for decreases elsewhere. The increases were seen mostly in South Korea and China, which many industry watchers regard as somewhat of a Last Frontier of luxury retail.

So what does this tell us? First of all, we should all remember that signs of strength in the global economy probably mean good things for those of us in America. Our economy is incredibly interconnected with those of other nations, particularly China, and we can’t start to make a significant recovery without signs that are trading partners are also ready to move forward economically. Sales increases of luxury goods mean that consumers in other countries feel confident in the direction in which the economy is headed, and maybe a little bit of that consumer confidence will rub off on other markets. Lastly, it’s a good reminder to all businesses that there are still markets out there that are spending money. Finding them may be a challenge, but it can and will be done. So congratulations, Hermes, on a game well played.

Article via Forbes.com

Henri Bendel New York
In response to some tough economic circumstances, Henri Bendel‘s parent-company CEO Leslie Wexner has opted to eschew the luxury apparel market in favor of focusing their stores only on accessories, beauty products, and gifts. Bendel‘s is one of the first major luxury retailers to make such a drastic move to improve their business models in the country’s current economic climate, and one has to wonder – will the risk pay off? (more…)

Boutiques look to in-store events to attract customers without cutting pricesWhen the going gets tough, the tough get going. Or, in the case of luxury retailers, they plan cocktail parties.

As it turns out, the opening of a temporary Hermes Hamptons store that we told you about a few days ago is not an isolated incident; instead, it’s a high-profile part of a larger trend. With fewer people able to afford their products, and some of those that can balking at the idea of conspicuous consumption, stores are having to do more to attract customers than they ever have in past memory.

The most obvious way to increase purchases would be to cut prices, but when a huge part of a brand’s image is their prohibitive price points and exclusive reputation, doing things that a big-box retailer like Best Buy would do to to attract customers isn’t what’s on their mind. Keeping the brand’s mystique intact is essential in order for them to keep doing business when the economy picks back up, and destroying the brand’s image of exclusivity now would probably be the luxury retail equivalent of throwing the baby out with the bathwater. In order to survive long-term, stores like Saks need you to be willing to still pay full price when things are back to normal and we’re not all afraid of losing our jobs. (more…)

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