US luxury market recovers gradually, however, apparel underperforms
The country’s richest consumers will drive luxury spending up between 6 and 8 percent this year, according to a survey of affluent Americans conducted by American Express Publishing Corp. and Harrison Group, but apparel is unlikely to benefit. Apparel spending by these consumers has recovered somewhat, but continues to slide, falling 5 percent in the first quarter and 4 percent in the second quarter. By comparison, apparel spending by this group slid 8 percent during the fourth quarter of 2008 and 9 percent in the first quarter of last year.
Overall spending by the most affluent 10 percent of the U.S. population is expected to surge $56 billion this year versus 2009, and half that amount is expected to go toward the purchase of luxury products.
Harrison Group vice chairman Jim Taylor told WWD at a Luxury Marketing Council presentation in New York Wednesday that apparel spending is generally discretionary and not a necessity. “It has become an event-driven business,” he said. “Still, I think it will be a pretty good Christmas.” . He also added: ”Aspirational wealth in America is gone,” explaining that, with or without a double dip, the economic landscape has fundamentally changed.
Even wealthy consumers have become more “resourceful” in seeking out the best deals and “more independent” in general, added Cara David, senior vice president of corporate marketing and integrated media at American Express Publishing. Clothes may matter less, but happiness matters more to those with discretionary incomes in the $125,000-to-$500,000-and-up category. David said the affluent have placed a greater emphasis on their personal lives. “Success is now more about the lives they are living than the living that they are making,” she said, adding that this consumer is spending more time with family and friends, and appears to be more grounded.