After eighteen months of cost cutting and budgeting among the international community, it seems that bling is back.
The global luxury brands industry was said to have shrunk by some 8% last year, according a recent report by consultants Bain & Co. But the improvement in the performance of equities markets has restarted spending on luxury goods. Demand from the emerging markets has also propped up expensive brands, with the luxury sector growing by 15% in China alone in 2009. Well known brands are flocking to open stores there, and the Chief Executive of Louis Vuitton has reportedly signed her four year old son up for Chinese lessons on the grounds that he should be groomed to do business one day in this region!
According to Bain & Co., clothes, accessories and high end tableware are the fastest growing products in the luxury sector. US department stores have posted positive reports for March, and in fact this trend is repeated in most major economies worldwide with the exception of Japan.
The global recession has had an effect not only on the way we shop, but the way we want to be perceived as consumers. Being frugal last year was seen as responsible and cool. The report cites “luxury shame” as the reason behind the growth in online sale of 20% during 2009. It was apparently seen as distasteful to be purchasing expensive goods in an age of supposed austerity.
Meanwhile, another signifier for confidence that luxury is returning is the rise in fortunes of the private jet industry. Decimated by the recession, many high net worth individuals had put their aircraft on the market. However, the private jet industry has also seen a rise in enquiries from corporations who are daring to believe that the risk of a double dip recession is ebbing away. According to the aircraft finance department of UBS, 2010 will be a steady year, with growth in the market expected to take off (if you will excuse the pun) in 2011.
