Flagships as grand — and as frequented — as a Guggenheim museum. Handbags that cost as much as a Hummer — and purchased on a whim.
Those were among the signs of a banner year for luxury, when most players posted double-digit sales and profit gains, thanks to a booming stock market and a strong consumer tendency to trade up to the best.
As Michele Norsa, chief executive of Valentino Fashion Group, put it last September: "Tourism has picked up, new markets are opening up and there is a lot of cash around."
And how. Ultraexpensive items, from $30,000 crocodile handbags to $58,000 diamond-studded watches, were such brisk sellers at designer boutiques and specialty stores that buyers wished they had ordered more. Janet Brown, who operates a namesake fashion boutique in Port Washington, N.Y., said of the $3,000 gowns and $7,000 fur coats from Lanvin she carries, "Their shelf life is usually a day."
Gucci Group was among luxury players to seize on this upscaling phenomenon, which propelled its sales in the third quarter by 11.6 percent. Leather goods led the increase, with nine out its 10 best-selling bags from the pricy La Pelle Guccissima line.
"When a product becomes a must-have piece, its price does not matter anymore," said Gucci Group president and ceo Robert Polet. "There has been a strong trend toward individuality and a desire for product made with superior quality, precious materials and outstanding craftsmanship."
Chanel said robust sales of luxury ready-to-wear in its boutiques, at prices approaching the opening ranges of couture, proved that a ceiling has yet to be reached for today's elite shopper. "I don't see price resistance at all at the highest prices," said Chanel SA president Françoise Montenay, citing sellouts of $41,300 coats and $30,500 knit ensembles for fall.
The good times rolled around the globe, with the U.S., Asia and the Middle East — awash in oil money — among the standout markets. Even Europe, with its long-anemic economies and atrophied image, showed some vigor, boosting the fortunes of firms like Hermès International, which saw its sales there advance 5.7 percent in the third quarter. Japan, also crucial to the luxury sector, rebounded nicely."We are very optimistic," an upbeat Bernard Arnault said while reporting a 19 percent leap in first-half profits at LVMH Moët Hennessy Louis Vuitton, the world's biggest luxury player. Neither shoddy counterfeit handbags nor natural disasters could dent Arnault's enthusiasm: Hurricane Katrina's impact was deemed fairly limited on LVMH's fortunes in the third quarter.
Compagnie Financière Richemont was also bullish about its fiscal year, citing vigorous demand for high-end watches and jewelry worldwide. "I am confident that, in the absence of any external events outside our control, Richemont's luxury business will report good growth."
In a bold expression of its confidence, high-flying Louis Vuitton in October christened its largest store in the world on the Champs-Elysées at the climax of Paris Fashion Week. The sumptuous, art-stuffed 20,500-square-foot behemoth has shoppers gradually wind their way down a central atrium after being whisked up a 70-foot escalator.
And that wasn't the last of Vuitton's big retail statements. As an encore, Vuitton unveiled an 8,500-square-foot global flagship in Beijing in November and now, with Marc Jacobs in tow, will fete an expanded location in The Landmark in booming Hong Kong on Thursday.
While China remained in the spotlight as luxury's latest land of opportunity, some argued that fast-growing wealth and a sharp appetite for luxury make America almost as important as China as an emerging market for European makers of high-end fashions and accessories.
In a report, HSBC luxury analysts Antoine Belge and Erwan Rambourg characterized the U.S. as an underdeveloped luxury market promising consolidated annual growth of 12 percent.
"Luxury has become such a necessity for U.S. consumers, who we believe will save on other products [and] services in order to continue displaying social status through brand purchases," they wrote.
Among the factors boosting demand in America are: a fast-growing population, notably of Hispanics keen to display social status; strong GDP prospects swelling the ranks of the richest; a readiness to indulge in premium products, especially among younger generations, and an enthusiastic reaction to celebrities who now endorse a range of European brands.
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion