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Shamed Conspicuous Consumers Spend Less
Associated Press
The global economic crisis has generated a new phenomenon: luxury shame, or the shunning of ostentatious purchases of expensive jewelry, watches and fashion, which is largely blamed for the projected 8 percent drop in the luxury market this year.
But a Bain & Co. study released Monday indicates the phenomenon isn’t durable, predicting a slight 1 percent increase in the luxury market next year, with full recovery not expected until 2011-2012.
The global luxury market is expected to be worth ⁈llion ($228.25 billion) in 2009, compared with ⁈llion in 2008. The 2009 forecast is a slight improvement over the 10 percent decline in sales Bain predicted for the year in April.
For the first time since it began tracking the sector, Bain said exchange rates had a positive impact, dulling what would have been an 11-percent drop in the worldwide luxury market.
The trend against ostentatious spending hit such luxury items as jewelry and watches especially hard. Watch sales are screeching to a halt, forecast to drop 20 percent to ⁈lion this year, Bain said, while jewelry sales are expected to drop 12 percent to ⁈llion.
Conversely, online sales are projected to rise 20 percent, to ⁈llion worldwide in 2009.
“It is much more private,” Bain partner and luxury goods expert Claudia D’Arpizio said. “You just click. There isn’t all the ceremony of paying for the item and making the sale at the cash register.”
Women this year opted to “shop their closets” and accessorize to update their wardrobes rather than buy new clothes, precipitating an expected drop of 12.5 percent to ⁈lion in womenswear sales this year. Leather goods sales are expected to drop just 4 percent to ⁈lion with shoes dipping just half a percent to ⁈llion.
When they did buy new clothes, women tended not to snap up fancy pieces that could only be worn on certain occasions, but rather evergreens, D’Arpizio said
Cosmetics and fragrances _ areas that D’Arpizio expected to be durable _ actually hit hard times, dropping 5 percent and 3 percent respectively (to ⁈illion and ⁈illion) as women went down market, going for supermarket brands rather than the ⁈eams _ the so-called “Nivea effect.”
“Frugality is fashionable,” D’Arpizio said, even for the wealthiest consumers.
Geographically, luxury sales in America are taking the biggest hit, with Bain estimating a contraction of 16 percent to ⁈lion in sales in 2009, while Europe is expected to be down 8 percent. Asia Pacific, excluding Japan, is forecast to grow by 10 percent, boosted by China, which is expected to grow 12 percent to ⁈llion.
The Japanese market continues to slump, with a forecast drop of 10 percent.
A service of YellowBrix, Inc.
© 2009, YellowBrix, Inc. 
AreliR
about 1 month ago
2 comments
Definitely, we should take into consideration that we should not overspend our money or even spend more than we earn. Personally speaking, I have just realized that I was in debt trouble because of overspending which leads me to think of ways to put a little more money in my pocket and get debt off my back- a little debt be brought about by cutting expenditures on things Idon't need. For instance, digital services – high speed internet is great, but examine the package my provider has it tied into. If you're laying out a lot of cash for hundreds of channels of TV you don't watch, you might want to rein the cable services in. Clipping coupons and saving money at grocery stores isn't a bad idea either, and switching to generic brands isn't a bad idea either. Saving a little extra money for debt relief will pay off on the long run.