Argentina’s luxury market to take yet another dramatic blow
With the aim to discourage ”discourage extravagant consumption,” President Christina Kirchner’s Government has announced new taxes on luxury goods, especially cars, boats and planes. Major luxury fashion houses had already closed up in Buenos Aires earlier this year with many more luxury brands on the verge of closing down their stores in the Argentinian capital. Luxury brands which exited Argentina in 2012 and this year include: Emporio Armani, Yves Saint Laurent, Escada, Calvin Klein Underwear, Polo Ralph Lauren and Cartier.
The measure is the latest in a series of government moves aimed at curbing inflation, which could exceed 30 percent in 2013, and stemming a sharp drop in its hard currency reserves. Sales of luxury cars – almost all of which are imports have exploded this year in Argentina, as the rich have taken advantage of favorable exchange rates to acquire top car brands like Mercedes Benz, Audi and Land Rover etc
Inflation also is seen as a huge problem. Earlier this year, Buenos Aires imposed a price freeze on Argentina’s largest retailers, but that measure was by and large unsuccessful in preventing consumer prices from spiraling upwards.
The latest anti-luxury measures deepen controversy over President Christina Kirchner who is often seen purchasing ultra-luxury jewelry, watches, apparel and leathergoods in Paris or London. Local media reports that her assets increase 20% to 8 million dollars in 2012.