We’ve already heard about rich people trying to hang onto their private jets in the face of global economic collapse. And we’ve heard how the chairman and CEO of Lehman Brothers, Richard Fuld Jr., is selling off his private art collection. Even the $50,000 tables at New York’s fanciest benefits may be left empty come spring.
And so The Wall Street Journal has posed a reasonable question: Is Bling Over?
Francois Henri Pinault, the CEO of the PPR luxury group that owns Gucci, reportedly said a few weeks ago that the rich will always be rich. Still, Francesco Trapani, chief executive of the Bulgari Group, recently had to sell his 137-foot yacht. And Barry Sternlicht, the chairman and chief executive of Starwood Capital, told The Journal that he’s "just waiting out the tsunami. That’s what this is, a financial tsunami."
And while some retailers are already anticipating a drop in revenue–Bergdorf Goodman’s fashion director, Linda Fargo, said she’s planning to buy more carefully for spring–others are continuing to open stores and hike up prices on luxury merchandise. Ralph Lauren recently released new made-to-order Ricky bags priced as high as $28,995 a pop. Mr. Trapani has just opened another Bulgari store on Avenue Montaigne in Paris.
Just this week, the Daily Transom received a vial of a Le Prairie anti-aging cream that will retail at $1,000 a jar. And yesterday Isaac Mizrahi gave The Times some rather unconventional advice for shopping during a recession. "Never buy anything that’s on sale," he said. "That’s always junk. … You’re just buying it because it’s cheap.”
If the rich in the West can no longer afford the luxury goods market, who will take their place?
The answer is hardly surprising: China, Russia, the Middle East and India. In February of this year, the Guardian published an article predicting who will be the new patrons of luxury merchandise, should the West’s economy continue to falter:
"The predictions that come out of such jollies would seem to justify their expense: within a decade, it is predicted that China alone will account for up to a third of the luxury goods sold around the world, while demand in Russia is estimated to have gone up 60% last year alone. And let’s not forget the Middle East and India. With these countries’ newfound spending power has come a desire to flaunt it. A skating glance through the recently launched Russian Vogue proves that the fondness for bling has not died."
Then again, the main Russian stock exchange was closed on Wednesday for two days because of its steep losses, after its worst-ever loss on Monday and another loss Tuesday. So perhaps no one is truly immune.