by Vanessa Friedman at FT.com
Could the above statement be true? It seems difficult to believe, but the numbers – at least numbers published today to the industry by Bain & Co, the consulting firm, in its 10th annual Worldwide Luxury Goods Market study (on general release later this week) – seem to say yes.
Consider: according to the Bain report, 2011 is going to be a record-setting year for the luxury market. Yes, you read that right. Bain predicts the industry will increase by 10 per cent beyond its current value of sales, which it estimates at €173bn. That would be growth of 13 per cent over 2009.
What’s more, the strongest markets are not just China (as expected), but also the Americas and western Europe, with sales in Europe up 10 per cent and those in the Americas 16 per cent higher. Put another way: the two most beleaguered global areas where the jobless numbers have risen are the places where someone (tourists?) are spending. A lot. Especially on high-margin watches and jewellery.
Maybe not. Indeed, I wonder if these findings might not indicate that, as a Bain release notes: “The affluent now remember that they have high disposable income even if they have low consumer confidence.” Rather they might show that the affluent have adopted luxury products as a form of alternative investment.
After all, putting your money in banks, or bonds, is seen by some as increasingly risky. But putting your money in branded jewellery (and Bain notes that it is branded hard luxury that is the most popular) could look, by contrast, relatively safe, especially to those affluent individuals living in economies under pressure. It’s a very traditional approach, when you think about it: history is littered with the tales of highly affluent individuals surviving difficult times by sewing their gold and silver and diamonds into their garments and moving on to a new life.
In this view, buying a Delaneau diamond watch/Boucheron emerald necklace/Cartier gold bangle is really just a pro-active strategy for protecting your wealth. It’s got nothing to do with bling.
(Well…maybe just a little.)