Gucci Store in Virginia
On a sunny May morning in New York’s upscale Fifth Avenue retail corridor, Carron Ryan stopped to admire a diamond-encrusted Van Cleef & Arpels necklace in the window of the Bergdorf Goodman department store. Louis Vuitton’s sprawling flagship store was right across the street, but she turned her nose up at its lineup of logo-stamped satchels and tote bags.
“It looks a little trashy, ” Ryan said. “It’s better to be subtle.”
Ryan’s fondness for low-key, logo-free pieces is shared by a growing number of wealthy shoppers, experts say, who prefer to shell out for unique, hard-to-find pieces instead of highly recognizable handbags from big-name brands such as Louis Vuitton, Gucci and Prada.
The shift is largely about adapting to a moment in high-end fashion when personal taste and individuality — not conformity — are the ultimate badges of cool. But experts say the penchant for more discreet luxury goods is also partly being fueled by the simmering political debate about income inequality, which is leaving some big spenders worried that it is tacky to carry a purse that practically announces its four-figure price tag.
“We clearly can see that this is something where people are not wanting to show their wealth quite so conspicuously, ” said Sarah Quinlan, who studies consumer spending patterns as the head of market insights for MasterCard Advisors.People walk past the illuminated exterior of a Louis Vuitton store in Shanghai, China. Newly affluent Chinese customers are no longer clamoring for the flashy luggage. (Tomohiro Ohsumi/Bloomberg)
This new attitude has helped create a rough patch for some of the titans of the luxury retail industry. Louis Vuitton, Gucci and Prada ascended as icons of global wealth as their , 500 handbags and 5 silk scarves became status symbols from New York to Shanghai.
But today’s luxury shopper has soured on such obvious signs of affluence, in particular the logo-emblazoned goods that these brands became known for as they aggressively opened stores in emerging markets and in smaller cities in the United States and Europe.
“This is really what keeps me up at night, ” Johann Rupert, the chief executive of Richemont, which owns Cartier and other big luxury brands, said at a business conference last week. “Because people with money will not wish to show it. If your child’s best friend’s parents go unemployed, you don’t want to buy a car or anything showy.”
Today’s high-end shoppers will shell out $1, 800 for a pair of heels, but they want them to be bulletproof in an era when Instagram, style blogs and live-streamed runway shows make trends go boom and bust faster than ever.
That has made for a tough lesson for many luxury retailers, which have effectively become too popular for their own good. Gucci’s sales slumped 1.1 percent in 2014, adjusting for currency fluctuations and other factors. Prada also saw its sales slide 1.5 percent last year and has said it will scale back store expansion plans. At LVMH Moet Hennessy Louis Vuitton, the Paris-based luxury giant, sales growth has slowed in the once red-hot fashion and leather goods division anchored by Louis Vuitton.
Their stumbles have come even as the overall market for luxury goods has grown steadily since the end of the recession, according to data from Euromonitor. Accessories — the bread and butter of these handbag-centric brands — was one of the fastest-growing categories of luxury goods last year, according to research from consulting firm Bain & Co.