Unstoppable luxury prices and sales

Unstoppable luxury prices and sales According to the New York Times, although the current economic downturn, the public are tightening expenditures, but the surplus family has once again ignited the enthusiasm for luxury goods. Today's luxury goods industry seems to have swept away the downturn in the financial crisis and has an expansionary trend. Many high-end brands have even started to raise prices. Compared with discounts, goods with the same price and quality are more attractive to consumers.

Arnold Aronson, former chairman and chief executive of Saks (United States high-end boutique department store) and retail planning director of the Kurt Salman management consultancy, said, "If a pair of Designer Shoes rose from $800 to $860 Who will notice?” Although consumers are not spending as they please before the financial crisis, they are gradually returning to that level.

MasterCard's SpendingPulse is a nationwide macroeconomic report tracking retail and service sales. According to their published data, compared with the same period of last year, although the overall consumption situation such as household and electrical appliances consumption has been tepid, luxury sales have increased for 10 consecutive months.

What changed?

Retailers and analysts believe that the majority are due to the recovery of the stock market and the people’s good consumer attitudes. Although the stock market fell sharply last week, the Dow Jones index has recovered 80% since its lowest point in March 2009. As the overall economic situation recovers from the financial crisis, wealthy individuals naturally have a wave of buying luxury goods.

Karen W. Katz, president and chief executive of Niemann Marcus Group, an American high-end department store operator, said that their business operations are closely related to the performance of the entire market. Although various economic data are still ups and downs, the overall development is still in a positive direction.

A New York entrepreneur stated that she liked some classic products, such as Yves Saint Laurent's handbag, chocolate and black, and she purchased one each. But since the financial crisis, she has begun to avoid buying publicity products. She believes that even if there is money to buy, she still wants to reduce the luxury brands she wears, so as not to appear excessively publicized. She is more willing to buy some popular products that are easy to sell.

Some of the recent luxury retailers’ earnings reports have demonstrated the renewed consumer desire of high-end customers. Many companies’ sales growth rates have reached double digits: sales of Tiffany (a famous jewelry brand) in the first quarter US$761 million, an increase of 20%; Louis Vuitton Group (LVMH, which owns Louis Vuitton, Marc Jacobs, Dior Christian Dior, etc.) had sales of 1.03 billion euros for the first half of 2011 , an increase of 13%; Similarly, PPR, which owns luxury brands such as Gucci and Yves Saint Laurent, also announced that its sales in the luxury car market in the first half of the year increased by approximately 23%.

The prosperity of the luxury goods industry contrasts sharply with that of the general consumer goods retail industry. The clothing store is insanely promoted to attract consumers; because some consumers can no longer afford large-packaged items such as family packs, Wal-Mart has introduced smaller packages; and despite the fact that garment production costs and manpower have been rising in the past two years, Victoria's secret ( Clothing brands such as Victoria's Secret and Children's Place have only gained a few cents for fear of losing customers.

Compared with the consumption of the unemployed and the bankrupt, the free consumption of the rich has to some extent contributed to the economic recovery. Mark Zandi, chief economist at Moody's Analytics, said that the role of this group is crucial. Because 5% of the wealthiest people account for one-third of total consumption, and 20% of the richest people account for nearly 60%. This is why our financial situation was so depressed when the financial crisis took place because of their spending. A sharp decline.

Just a few years ago, the days of the luxury goods industry were still frustrating and the number of buyers was decreasing. Some high-end brands had to start discounting prices, and they evolved into consumers who are waiting for low discounts instead of buying them immediately. In October 2008, luxury sales decreased by 17.9% compared to 2007. According to the shopping pulse data, as of May 2009, the entire industry has maintained a double-digit decline.

Now, many businesses have begun to increase the volume of luxury goods to meet the needs of customers who have come to order.

Saxophone chairman and chief executive Stephen Sadoudovice stated that customers love special things, whether they are exotic leather or more stylish accessories. The luxury industry's promotional activities have been significantly reduced. We expect full-price sales to reach a higher level before the financial crisis.

Christian Louboutin at Saks

For example, in 2008, Christian Louboutin’s most expensive shoe in Saks was a suede boot, priced at US$1,575. This year, the price of a pair of suede over-the-knee boots has been Reached 2495 US dollars. De la Mer cream, which costs $1,350 per 16 ounces in the Bergdorf Goodman department store, will be available for purchase this year for $1,650.

Ms. Katz said that regardless of the manufacturer's retailer's pricing, customers often value the intrinsic value of her purchases.

The snobbery mentality of consumers is also a factor that drives the growth of luxury goods. High prices are often considered to be a sign of good quality.

Jyothi Rao, the Women's apparel department manager at Gilt Groupe (designer apparel discount website), said that now he has spent less than 1,000 US dollars to buy some luxury brand shoes, and some have even risen to 2,000 US dollars. This is partly due to a certain loyal customer base.

Goyard bag

A Los Angeles consumer said she has noticed that everyone's shopping attitude is changing, and if they are very fond, they will pay the full price. Before the consumers are often very cautious, but now they have a relaxed attitude to buy a luxury goods, such as the popular Goyard bag, even if it costs thousands of dollars, this brand of bags is still repeatedly sold out across the world, deeply affected by People love it.

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