‘Affordable Luxury’
Nov 9th, 2007 at 9:57 am by Susie
Yeah, all those upscale accessories don’t seem like “investment dressing” now, do they?
Wall Street is concerned. Nordstrom’s share price has fallen more than 35% in the past three months, while Coach is down nearly 30%; Saks Inc. is down about 4% and Polo is down around 19%.
The outlook is very different from the past several years, when sales of all sorts of luxury goods exploded, boosted by a rising stock market and strong fashion trends that spurred purchases. The boom led marketers to broaden their target audience from the super-wealthy to include the growing ranks of upper-middle-class consumers. Annual sales of luxury goods now total $150 billion globally, up from $110 billion five years ago, according to analysts at Telsey Advisory Group.
For some brands, the strategy involved going slightly more down-market, tempting mid-income consumers with relatively affordable entry-level luxury products like Chanel sunglasses, Coach wrist purses or silver jewelry at Tiffany & Co. — while still selling “extreme” luxury products such as designer watches and handbags costing thousands of dollars. The new less-affluent customers are now proving vulnerable to a variety of economic factors that don’t appear to faze the very rich.
[...] zondaschuck wrote an interesting post today!.Here’s a quick excerptFor some brands, the strategy involved going slightly more down-market, tempting mid-income consumers with relatively affordable entry-level luxury products like Chanel sunglasses, Coach wrist purses or silver jewelry at Tiffany & Co. … [...]
Also note this little tidbit from one of my trading newsletters:
“The Wachovia news is grabbing the headlines but the biggest clue to what may be coming down the pike came from Sotheby’s (NYSE: BID) as the auction house’s most recent auction flopped, suggesting that big money is tightening its wallet.”
There has also been a recent steep rise in high-end art ‘flipping’ that just came to a grinding halt. Bursting bubble anyone?
[...] Sonya had some great ideas on this topic.You can read a snippet of the post here.For some brands, the strategy involved going slightly more down-market, tempting mid-income consumers with relatively affordable entry-level luxury products like Chanel sunglasses, Coach wrist purses or silver jewelry at Tiffany & Co. … [...]