The Link Between Luxury Goods and Art

In the past I have posted on connections between the luxury market and the art markets, as both typically trend in unison.  The Financial Times has an article where they look at the connection between luxury and art.  The article notes that luxury consumers look not only for areas of status whichcombine designer products, jeweler, luxury hotels, but also luxury markets which include fine art and art fairs.

The Financial Times reports

Earlier this year, Londoners were treated to the results of 15 years of archival work when Bulgari opened an exhibition of late 20th century pieces in its Bond Street store. The Italian jewellery house displayed original drawings of standout designs as well as the earrings, bangles and necklaces themselves.

Neither the drawings nor the pieces were for sale, but the decision to put on the show chimed with the company’s belief that its products have a firm place in the history of decorative arts. The show also catered to what experts argue is a growing trend: luxury buyers’ desire for a shopping environment that includes not just high-end jewellery and fashion, but celebrated hotels, top-rated restaurants and – more ephemeral but just as necessary – fine art.

“It’s about aligning interests,” says Christine Cross, chief retail adviser to PwC. “Customers conflate sectors, they want both goods and services.”

Jones Lang LaSalle, the property group, published a report last year that agreed. Its analysts pointed to six ways in which London’s socalled luxury quarter – Bond Street, New Bond Street and their side streets – distinguished itself from other luxury retail destination around the world. These included its top hotels and restaurants, private member clubs and casinos, luxury homes and office accommodation (particularly for hedge funds), and, finally, the art, in the form of the Royal Academy of Arts, art fairs held in the area, and nearly 90 galleries and dealers.

The phenomenon is not new. Peggy Guggenheim’s first New York gallery, Art of this Century, opened around the corner from Bergdorf Goodman and Tiffany, while in the 1980s and 1990s, fashion houses followed artists to New York’s SoHo neighbourhood. But two contemporary trends are underscoring the importance of such an environment: the rise of the non-European customer and the internet.

The Chinese, for example, are among the world’s biggest spenders on luxury goods as well as a driving force in rising art market prices. It only makes sense that Chinese tourists might gravitate towards cities and districts that offer access to both fine art and high-end shopping.

The Jones Lang LaSalle analysts point out that, in order to compete with websites such as Net-a-Porter, physical shops and their employees need to play a wider variety of roles. “[They] need to become entertainers, comperes, theatre producers, masters of ceremonies, butlers, concierges, pamperers, flatterers, psychologists, social workers and more.”

In neighbourhoods such as Mayfair, at least part of this work can be farmed out. Galleries still abound, and others are looking to move in despite demand for prime locations outweighing supply by 10 to one – according to a report published this month by London Luxury Quarter, an initiative by New West End Company and Heart of London Business Alliance to promote the area. Even so, says the report, some retailers and galleries are not satisfied with mere proximity, and are instead engaged in closer collaborations and pop-up shops.

These might become more important if rising rents and higher-earning retail empires push out galleries and dealers from the traditional art districts. Thomas Woodham-Smith, creative director of art, antique and design fair Masterpiece London, argues that businesses selling and showing older art are particularly susceptible to this sort of pressure.

He says that rich people today crave proximity to only a very narrow band of contemporary art.

And while landlords might well be aware of the need to preserve diversity in terms of retail versus galleries, restaurants and hotels, the finer distinctions between a small-time dealer in, say, Renaissance sculptors and the Gagosian Gallery might not be made. That could lead to big changes to the face of thoroughfares such as Bond Street, where Henry James’s protagonists once strolled for antiques.

Source: The Financial Times