Soaring Luxury-Goods Prices Test Wealthy's Will to Pay


Despite expanding into new markets, the luxury-retail business has been relying on price increases to drive sales. Now, even the very wealthy are nearing the limits of what they are willing to spend.

In the past five years, the price of a Chanel quilted handbag has increased 70% to $4,900. Cartier's Trinity gold bracelet now sells for $16,300, 48% more than in 2009. And the price of Piaget's ultrathin Altiplano watch is now $19,000, up $6,000 from 2011.

Such increases for some of the world's most expensive indulgences far outpace inflation and contrast with the middle and lower end of the retail market, where even small increases can turn off shoppers.


Why High-End Luxury Brands Are Losing Their Luster

By Fani Kelesidou, for The Motley Fool

"The best things in life are free. The second best things are very, very expensive," the queen of elegance Coco Chanel once stated. And she was right. In the world of "true" luxury, the relentless effort to create something that's in a class by itself was always rewarded with a sky-high price, which only an exclusive group could afford.

During the last half decade, however, an emerging "luxury for less" or "affordable luxury" industry thrives on emulating what once was considered exclusive and making it accessible to the masses. But, "true" luxury was never meant to be accessible. And this massification is causing an identity crisis, one that could have severe implications for high-end luxury brands down the line. 

Click HERE to read article

Forbes: Why Do Luxury Brands Need High Profile Creative Directors?

When a 21 year-old Yves St Laurent took the helm at Christian Dior after the couturier’s death in 1957, he gained critical acclaim for his first collection and firmly established a template for luxury goods businesses thereon in. So, the concept of a creative director evolved, with a remit to deliver sustainability and growth, built on the heritage of the brand while moving it forward for new audiences. And today, it is a crucial role in the world of selling luxury goods.  READ ARTICLE HERE

Read More

The Economist: Luxury sales dim in China, but prospects glow

“IT WAS an amazing golden age,” reflects Guillaume Brochard of Qeelin, a Chinese jeweller. From 2007 to 2011 many luxury-goods firms enjoyed double-digit annual growth in China, which became their most important market. The first blows came last year, with an economic slowdown and jitters about the political transition. Now, a crackdown on corrupt gift-giving and a populist backlash against ostentation have added to the woes.

The outlook for luxury-goods firms appears to have dimmed. Internet users have posted incriminating pictures, for example of poorly paid bureaucrats wearing suspiciously pricey watches, which have caused heads to roll. Mobs have also disrupted banquets deemed to be too lavish, on occasions forcing officials to their knees to beg for forgiveness.



Luxury brands gearing up for US expansions: Reuters


Luxury spending in the United States collapsed after the 2008 financial crisis but roared back to pre-crisis levels by 2012. Last year, the world's No.1 and No.3 luxury groups LVMH and PPR saw higher growth rates in the United States than in China for the first time in years.

To capture those buyers, brands are now expanding beyond New York, which accounts for a third of U.S. luxury sales, and the next two main cities of Los Angeles and Miami.

Last month, Hermes opened in Greenwich, Connecticut - an area popular with financial professionals and their families - and plans to expand in cities like LA, Miami, Houston, Dallas and Boston over the next two years.

PPR's brands, which include Balenciaga, Gucci and Stella McCartney, are looking at Dallas, Atlanta, Chicago, Miami, Orlando and Philadelphia.