Stacey Vanek Smith: When times are tough you’d think people would take it easy on the champagne and designer wear. Well, apparently not. The world’s largest luxury goods company has posted huge profits today.
In our Mid-day Extra, the BBC’s Sarah Stolarz reports on how sales to the 1 percent shot up by 25 percent.
Sarah Stolarz: Dom Perignon, Louis Vuitton, Bulgari — they’re all names synonymous with luxury and excess. You may not have heard of LVMH; it’s the company that owns all of those brands and it’s posted a 25 percent rise in sales in the past three months. Continual growth in emerging markets like Asia and Russia is fuelling the increase.
James Lawson is director of Ledbury research, a consulting firm for luxury brands and wealthy consumers. He says that a love of spending and travel amongst new consumers is helping to prop-up markets world-wide
James Lawson: The impacts of these emerging markets is not only in their home markets but also in their historic markets of western Europe and North America.
Lawson says wealthy customers from emerging markets will vacation in the developed world, and open their wallets for luxury goods that are hard to find back home.
But LVMH says not all its success was from the high-end brands. The strongest brand growth at the company was actually seen at cosmetics retailer Sephora.
The makeup company is usually thought of as directed towards the 99 percent — it caters to walk-in customers at shopping malls. And analysts argue the success of a mid-level brand like Sephora could be a sign that the luxury bubble may be about to burst.
In London, I’m the BBC’s Sarah Stolarz for Marketplace.
If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air. But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.
Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.
When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.