Two years ago, the domestic luxury market was widely believed to have shrunk permanently. The credit-fueled forays by the aspirational shoppers stopped. Frugality was “in” so even the super-rich eschewed conspicuous consumption. Even the vaunted Neiman Marcus re-tooled its merchandise offerings to provide less extravagant alternatives.
After unloading excess inventory and closing stores, luxury retailers were able to walk away from discounting in early 2010.
- In late February 2010, Tiffany & Co had raised its prices for the first time in two years.
- Saks, a self-admitted “poster child for discounting,” attributed its rebounding first quarter profitability to “full-price selling.”
- After having re-mixed its merchandise for a more value-conscious (but still rich) consumer, the CFO of Neiman Marcus observed that “some of the hottest things we’re selling are at the very upper, upper end of our price range.”
The Great Recession did not, as The Wall Street Journal forecast, usher in “an age of belt-tightening and less conspicuous consumption.” It only temporarily slowed the freight train of luxury spending.
Luxury travel commenced a comeback in early 2010, at the same time as the retail resurgence. Carriage trade travel agents surveyed for Virtuoso’s January 2010 travel forecast reported rebounding demand.
- 81 percent said their future bookings were up over the same time last year
- 80 percent said sales were up over the prior three months period reference?
Get the full story at Hotel Online - it is a long article, but well worth a read if you are in the luxury consumer industry.