Recession-Proof Luxury: Timelessness & Enduring Quality

July 28, 2010Sparxoo

If you had a choice between buying one uber trendy dress this season and another trendy dress next or buying a timeless dress this season and a timeless cardigan next, which would you choose? At year two, you could either have one dress or one dress and one cardigan. Investing in timeless luxury items is a way to maximize spending dollars in recessionary times while maintaining an affluent lifestyle. More and more, Gen X men and Gen Yers consider luxury an investment and some prestige brands, such as Hermes, are benefiting — even when times are lean.

The overall luxury market fell during this recessionary dip. It dropped 10 percent in the U.S. and 8 percent worldwide in 2009. Trendy fashion houses such as Christian Lacroix went belly-up, meanwhile Hermès managed to increase sales by 8.5 percent, including an 11 percent bump in the final quarter and an astonishing 20 percent gain in the Americas. “Hermès isn’t about trendy,” said Bob AChavez, the CEO of Hermès’s American operation to the Luxury Institute. “It isn’t even a fashion house. We are a house of craftsmanship. We are committed to making products that have an enduring quality and are very versatile.”

Heritage, classics and enduring quality, as found in Hermes and Louis Vuitton products, are powerful selling points to during recessionary slumps — particularly to Gen X men and Gen Yers. “I believe the American male is largely uneducable. We need to focus on the segment of males that have real discerning taste, but I can also say that even the undiscerning American male is a smart consumer. That person is looking for a product that is durable, that is classic, that can stand the test of time,” says Lew Frankfort, Chairman and CEO of Coach. In general, classic and timeless value makes sense when considering men’s fashion versus women’s fashion.

Women’s fashion drastically ebbs and flows with the seasons whereas men’s fashion receives subtle adjustments on existing designs. For instance, slightly v-necked shirts or a small whale pattern or a royal blue instead of a faded blue or a European cut versus relaxed might be en vogue for several seasons. For the most part, men’s fashion remains constant and therefore investing in one product could last many more seasons than women’s uber-trendy drop-crotch trousers — reminiscent of Hammer-time.

Gucci drop-trousers might pique the interests of some young fashionistas, but for the most part, Gen Yers view luxury as an investment — and as such, have a discerning eye for the quality. Unlike its generational counterparts, Gen Y is less concerned with heritage than exceptional quality. Heritage brands might find it difficult to market its spot in history to turn on Gen Y. Instead, luxury brands need to dial-up the longevity, both in quality and style, of its products to make their brand a long-term investment.

Many high net worth individuals are savvy shoppers that buy less on impulse and think about purchases in a calculated, well-thought-out manner. As we’ve seen in 2009, trendy fashion houses are the first out the door due to their ephemeral designs while enduring quality prestige brands, such as Hermes and Louis Vuitton, thrive. Although the recovery is in the purview, high net worth individuals are still wary of spending superfluously but interested in investing in luxury.

To read more about luxury trends:

2010 luxury trends

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