Wealthy Curb Financial Excesses During Recession
Rich People Bargain-Hunting Just Like Everyone Else
Jul 9, 2009
If you find yourself cutting back on little luxuries during the recession, you are not alone- the very rich are doing it too. In fact, that person you may have been fighting with over a piece of marked down designer merchandise may actually be a member of this select group. The Associated Press' Anne D'innocenzio reports that the wealthy increasingly are bargain hunting just like everybody else.
Meanwhile, both Prince Charles and Camilla, Duchess of Cornwall are getting more wear out of their clothes and slashing personal spending. As well, they are opting for vacations closer to home, cutting staff and watching their use of electricity.
Banking on the Rich
However, Brioni, the high-end Italian clothier is one company that is banking on the rich being unable to resist buying a little something luxurious. It may be whistling in the dark but the Wall Street Journal's Ray A Smith reported that back in October it defied the naysayers and introduced its most expensive line of men's made-to-measure suits ever. Constructed of exotic fabrics such as vicuna and pashmina they sell for $43,000 each. "The timing was not fortunate for us," explains Andrea Perrone, the company's co-chief executive in a classic piece of understatement.
Note of Muted Hysteria
Much of the current budget consciousness among the wealthy is not that new. For nearly two years it's been fashionable for them to be discreet and almost 'old money' about flaunting their purchases, so much so that some boutiques package them in brown paper bags. However, recent stock market gyrations have introduced a note of muted hysteria to their behavior. It's not just about being tasteful any more; it's about being ever so slightly scared. The rich may be well cushioned but, as the zeros get knocked off their net wealth, they are taking precautions.
A film of the Metropolitan Opera during the early days of the crash showed New York audience members looking grim as they clustered in groups before the performance. There was a whole lot of head shaking going on.
Tiffany Survived the Civil War
Bloomberg.com reported that Tiffany & Company, that icon of luxury, reported a fall of 21 percent in holiday sales and that even a 10 percent price reduction on engagement rings failed to jump start success. "This is at the worst end of expectations," said David Schick of Stifel, Nicolaus & Company, "but Tiffany survived the Civil War so Tiffany will absolutely be a survivor through the slowdown."
Rich are Adding to their Art Collections
There is one place that the rich are not scrimping and that is their homes. There they are positively splurging. Clive Christian a maker of luxury bathrooms, kitchens, butler's pantries and libraries reports that its sales for the first part of 2009 totaled $5 million, $2 million more than the whole of last year. Indeed the Straits Times' Joana Seow reported that the rich are adding to their art collections and buying jewelry, gems and watches because they believe they will increase in value. She was writing about the 13th Annual World Wealth Report released by Merrill Lynch and Capgemini.(capgemini.com/industries/financial/solutions/wealth/worldwealthreport)
The recession is doing the unexpected and becoming more of a leveler than was originally imagined.The wealthy are worrying over diminishing fortunes, cutting costs and bargain hunting just like everyone else.
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