The Luxury Market

I just received a copy of a recent issue of the Kiplinger Letter.  I spotted in interesting couple of sentences on the luxury market and I think it has some relevance to what is happening in the fine and decorative arts markets and sectors. There was also a shot notation on the estate tax situation which I have also posted.

Kiplinger states luxury retailers such as Tiffany are expecting 4% growth this year in poor economic conditions.  That is rather good, but it would be better, but the buyers are from the wealthy economic spectrum, and the luxury retailers are not getting a strong cross over effect from the middle class.  Perhaps this is a parallel to the art markets, where the upper market sectors are rather vibrant and strong, while the middle market continues to languish.

From the Kiplinger Letter

Luxury retailers face a difficult adjustment to the postrecession market.
They’ve lost a big chunk of consumers, maybe permanently. Upper incomers are starting to come back to Tiffany & Co., Neiman Marcus and other posh purveyors…the luxury market worldwide will likely rise 4% this year. But “aspirational” shoppers, the middle incomers who eagerly sought pricey merchandise and fueled growth in the American luxury market over the past decade, are nowhere to be found.

There was also a short note on the Estate Tax situation. Interesting concept that perhpas 2010 estates may have the choice between no tax and the stepped up basis or the 2009 rates.

The Kiplinger Letter states

There’s no such move possible on estate taxes, though. Even liberals
don’t want to see the top rate soar to 55%, with the $1-million exemption returning. Odds of resurrecting 2009 rules for 2010 estates get shakier as time passes. Those estates may get a choice: Use 2009’s $3.5-million exemption and 45% top rate or enjoy no estate tax this year but be stuck with carryover basis rules. Then, starting in 2011…a phase-in of lower rates and higher exemptions.