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When the recession hit in 2008, the luxury market, which had been soaring, broke like a rocket into three segments.
First to fall away were the group the marketing types call “aspirational”—those with good jobs but little financial bedrock; they had been buying nice things on the strength of their now quailing bonuses.
The next to go were the premium buyers—tourists in the luxury sector, many of them from the BRICs and other emerging economies, who splurge on Burberry, Paul Smith and Coach. These shoppers kept up until late last year, when their momentum finally slowed.
Then there are the super-rich, for whom labels like Gucci, Hermes and Chanel are a way of life. This segment has continued to ride to new highs.
And they are far from done, according to Ron Kurtz of the American Influence Research Center in Alpharetta, Ga. “There are people in the one percent who did cut back during the recession,” says Kurtz. “Now they have ‘frugal fatigue’.”
Hermes, the maker of leather goods and accessories, reported 17 percent growth for the first quarter of 2012 on its home turf in Europe. The high-end jeweler Graff increased revenue by 13 percent. Armani, Gucci, and LMVH, the parent of Louis Vuitton, all had healthy returns to start the year.
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