Tuesday, June 23, 2009

Luxury: The Good Thing About All the Bad News

After a busy few days, I caught up this morning on the news and walked away with my head a-spin, between high-profile bankruptcies and foreclosures, and reports about luxury spending

From a business standpoint, I cringe. But, honestly, digging a little deeper, I find myself encouraged and confident that this reality check will help the luxury market emerge stronger and more true to itself. 

Perhaps it is partially the old-school New England mindset drilled into me when I was a kid growing up in Connecticut (I can't count how many times mom shook her head and said: the truly wealthy don't put on a show). In my neck of the woods, the "rich" people drove boxy Volvo wagons (before Volvo luxed themselves) and wore L.L. Bean. So, when I started covering the luxury market as a journalist in the mid-1990s I experienced quite a culture shock. That shock came mostly from displays by people who owned small businesses, yet lived (to quote mom again) "like Rockefellers". Private jets, $10,000 bags, over-the-top real estate. Wow. How did they afford that stuff?

As bankruptcies pile up, I realize: they couldn't. Somehow, over the past 15 years or so, "luxury" became all about hype and image. Spending (on credit) was the way to go. Obviously, I'm not stating anything we don't all already know (and perhaps I'm sounding like a broken record). But, as our collective fears are stoked by each wave of bad news, and as we scurry to find our way through these times and regroup for whatever the future of "luxury" holds, I stand firm in my faith that the luxury market, however gradually, will not rebound as much as reemerge. Those companies who remain focused on quality, live and work within their means, and base their businesses on value (rather than hype), will be those who survive and define the future of "luxury"... Not unlike those who defined the word to begin with.

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