Is Luxe Shopping Over?

Is Luxe out?
From New York Magazine
Kelly Cutrone: ‘Fashion Luxury, Forget It. It’s Over.’

Here is her quote...do you agree?

Here is what I think is the future: Street life and
life style. Style is in; fashion luxury, forget it. It's over. Gucci, Vuitton,
Hermes ... all those places are really great, go for it. That business exists in
a city called Paris, France. That's where that is. Those businesses will
continue. Retail business, pretty much over. I think people who sell to retail
companies are people who can't afford their own stores. The poor boys — Old
Navy, J.Crew, Gap ... they already knew that and aren't wholesaling. Editorial,
magazine, we are going to say buh-bye to them as we know them. They will still
exist but everything is on the internet.

Meanwhile over at 24/7 wall street we've got an article on 10 brands that will disappear. The demise of Zales has been predicted for years but Moodys?

Will luxe brands be next?

(and why do I have problems with the block quote function)

The Big Spin on the 2009 Spend

Finally...The Death of The Art Project Statement Necklace -

Fashion Not Quality

From Forbes.com
In Depth: How The Luxury Consumer Will Spend In 2009

This is one of a handful of habits luxury buyers are expected to embrace in 2009. Wealthy consumers will spend, but differently than before. Exclusivity will be embraced as will quality and dependability. What's more, luxury brands will begin offering discounts and incentives--something many have never done before.
"The days of shopping 'til you drop are over," says David Lamb, chief strategic officer at diamond giant De Beers, which, with London-based market research firm Ledbury Research, recently examined the changing demands of the high-net-worth customer. "Instead of seeking out novelty, they're exploring authenticity," he says. "In this kind of economic climate, you literally can't afford to make a mistake."

Real Jewelry With Intrinsic Value, Not Fashion Statements, Will Sell

"This income bracket is very aware of the public backlash against them. In many respects, those that have the wealth played a role in the economic turmoil that has erupted," says Brian Sozzi, a retail analyst at Wall Street Strategies, a New York-based independent stock market research company. "So, there is no need to throw it in the face of someone shopping at Wal-Mart by showing off the new Louis Vuitton bag."
Yet Sozzi and others believe that conspicuous consumption will never entirely fade.

Shireen El Khatib, CEO of Al Tayer Insignia, the luxury goods arm of the Al Tayer Group, which inked a deal to bring Bloomingdale's to Dubai in 2010, says that while the number of tourists in her stores--including Yves Saint Laurent and Italian cashmere brand Loro Piana--this November were down, sales among locals were up. (She would not reveal specific numbers, but she did say growth has slowed from double digits in 2007 to single digits in 2008.)

"The consumer is becoming more and more sophisticated and brand savvy--looking for limited editions and other timely items," she says, "but [in the Middle East], they're still shopping."

Or not...

However, Ron Kurtz, founder of Alpharetta, Ga.-based market-research firm the American Affluence Research Center, says this might not be the case for long. As the oil that has made many in the Middle East so wealthy loses its value, those who he calls the "new rich" may begin to cut back, including those in Saudi Arabia, Brazil and China. New initiatives--such as Saks Fifth Avenue's Jan. 12 announcement that it would open a store in Jeddah, Saudi Arabia, its second in the country--might be postponed due to a decline in overall consumer confidence.
"The wealthy citizens of the countries now experiencing recessions and declines in oil and commodity prices will contribute to the decline in sales of 'true luxury' brands," says Kurtz.

My take on all of this is that the affluent will cut back substantially but the ultra affluent will alter their spending habits only slightly....they will still spend, but discreetly.

And finally they won't be dropping $2500-$10,000 on those ridiculous statement necklaces that were all the rage in the 2008 collections....they will go for quality and intrinsic value.

Bling Biz News

A couple of interesting things are happening in the Bling Biz.

From Women's Wear Daily:

One Sparkling Sector: Demand Stays Buoyant For High-End Jewelry

— Top-tier jewelry companies aren't flinching in the face of the U.S. economic slowdown — and are proceeding full-speed ahead with their store expansion programs.

So even in this economy Graff, Chanel, Bulgari, Van Cleef and other high end jewelers are expanding. Recession or not, the expectation is that highest end luxe client will continue to shop.

But on the lower end, things sales aren't so sparkling.

From Idex:

Online super jeweler, Blue Nile reported that US sales were down 1% in Q1, compared to a 34% gain in Q1 of 20078. Demand for diamonds in the low end of $5,000 and below remains strong but in the $100,000 plus level demand is weak. Has the high end customer stopped shopping or just opted for the retail store schmooze rather than online efficiency?

While the company reported that first quarter revenues were $70.5 million, up 3.8 percent from the prior year, all of the increase came from sales in international markets, including Canada, the U.K., Western Europe, and to a lesser extent, market tests in Eastern Europe and Asia. Sales in non-U.S. markets were $5.7 million, up 124 percent from last year’s $2.5 million in the first quarter.

I think that the trend for international sales will stay strong due to the weak dollar.

Then again...some super smart people I know are starting to short oil and euros...maybe we're in for a stronger dollar soon.