Retailers, consumers and prices
Check Out Line: Austerity the “must-have” item for luxury buyers
Chief executives from Burberry Group, Hermes, Tiffany, Rolls-Royce and Richmont’s Van Cleef & Arpels are among the many officials who will speak this week at Reuters’ first-ever Global Luxury Summit about what their sector is facing amid a recession that has even well-heeled consumers dialing back spending.
In a new report, Bain & Co predicts sales of luxury goods are expected to drop 10 percent this year and not recover fully until 2012.
“Austerity is fashionable, even for the wealthiest consumers,” Bain partner Claudia D’Arpizio said.
Van Cleef & Arpels CEO Stanislas de Quercize said the French jeweler does not expect sales to rise this year even though it will open eight boutiques and Hermes CEO Patrick Thomas sees the luxury sector suffering for the next two years.
Some are more optimistic in the face of the slowdown. Burberry CEO Angela Ahrendts said the British luxury brand does not feel threatened by value-seeking shoppers, although she acknowledged “aspirational” consumers are unlikely to return to buying expensive coats and handbags any time soon.
Meanwhile, some retailers are already planning for something less luxurious: the back-to-school season.
Also in the basket:
The Gut Renovation at Home Depot (Barron’s, subscription required)
Jewelers Adapt to New Priorities (WWD, subscription required)