Affluent young shoppers helped limit the damage to the luxury sector last year and set it on a course for recovery earlier than other parts of the economy.
According to recent transaction data from a network with more than $111 billion in annual luxury spending with more than 700 luxury merchants, American Express Business Insights, the analytics and consulting organization within American Express, said global luxury spending in 2009 showed signs of a rebound, and even growth.
Despite a 20 percent decline in U.S. luxury spending last year, consumer purchases during the second half of the year increased almost 10 percent. Following up on that rebound, they spiked just over 20 percent in February and March of this year.
This stabilization in luxury spending is part of a global trend, in which emerging economies such as India and Brazil have bounced back vigorously. The two markets weathered a 20 percent decline in luxury spending last year, but registered a 54 percent pickup in February and March.
Luxury spending in Japan and Australia was up 5 percent in 2009, and jumped 18 percent in February and March. In the European Union, which declined 15 percent last year, it increased 14 percent in February and March, according to American Express data.
“We saw luxury fall off pretty quickly, but we thought it would be more sustained,” said Ed Jay, senior vice president of Business Insights. “We were surprised it did not fall more through , and we were even more surprised at how quickly it came back.”
Jay attributed the breakneck reversal in emerging markets and in Australia to the fact that credit availability and the fallout of the U.S. financial markets affected these regions less.
For Europe and North America, the slow ascent had more to do with the growth of sales in luxury e-commerce. In 2008 to 2009, the spend performance by luxury e-tailers soared 87 percent, while sales at retailers with Web sites increased just 0.7 percent.
Instrumental in this rebound was the younger, more affluent spender, who is typically male and between 25 and 44. Although these consumers represent a small segment of the overall luxury demographic, they were the most resilient during the downturn, rebounding the most dramatically.
But what also fueled luxury’s comeback was the fact that, among traditional shoppers, the number of transactions during the recession never fell, Jay said.
Perhaps it was a fear of committing a faux pas, but many of these shoppers opted to make their purchases online.
“They just didn’t want to be seen coming out of stores with shopping bags,” he said, noting this shopper traded down less than originally believed.
As a result, when the economy started to turn, luxury recovered faster, Jay said, noting that normally, this sector’s recovery lags post-recession.
This momentum has continued, Jay said, despite the fact that there are fewer promotions, less inventory and higher prices than last year.“We are not seeing a slowdown in luxury spending. We are seeing growth across the board,” he said. “We don’t see an inflection point yet.”
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)