Luxury Good Spending Increases

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Fellow appraiser Logan Adams, ISA CAPP sent me an article from the Associated Press on spending over the holidays on luxury goods by the wealthy.  The results are impressive at the top retailers, with the likes of Tiffany increasing their sales and profit prediction based on the spike in holiday sales. According to the article, this is a big change from just six months ago when luxury good spending was a bit more sluggish.

The report corresponds well to the recent Appraiser Workshops Fine and Decorative Arts Market Confidence Survey for luxury goods. The survey reported that almost 60% had increasing confidence in the luxury market, 30% neutral and only 10% negative.

The AP reports

The splurges reached a head the week before Christmas. Average daily spending reported by upper-income shoppers rose 45 percent to $183 during the week ending Dec. 26, according to a Gallup Poll. For all shoppers, the figure rose only 18 percent to $85 that week.

Six months ago, wealthy Americans got spooked by a stock market slide and cut back spending. Now, they are trading back up to higher-status brands as the stock market bounces back. The rich in booming Asian economies, especially, are ramping up spending.

On Tuesday, Tiffany & Co. raised its profit outlook for the year because of better-than-expected holiday sales, and noted particular strength in more expensive fine jewelry and diamond rings. Silver jewelry, which had propped up Tiffany's business when its customers hit the brakes on spending in the recession, was weaker.

Revenue at stores open at least a year rose 7 percent in the U.S. in November and December and was even stronger in Asia, rising 15 percent. That's a key measure of a retailer's health because it excludes the effects of stores that open or close during the year.

The jeweler's report backs up strong December sales reports last week from pricey department stores Saks Inc., Neiman Marcus and Nordstrom. All said revenue

To read the article, click HERE.