The heads of a number of luxury firms recently met to address how to market their brands during a recession in which even the wealthy aren't spending money because it seems tacky. Clearly, the perception of luxury brands has become one of extravagance and indulgence, instead of quality and timelessness. And that is really hurting sales.
Part of the problem, according to Karl Lagerfeld, is that the meaning of luxury had become distorted.
"The word [luxury]...was used for things it was never related to," the designer said. "It became nearly obscene. Now it has to change...and go back to what it used to be about — discretion and elegance, and not bling-bling. The hint of vulgarity has to go. The luxury business will never die. Luxury is about quality, refinement, innovation, and not about price."
Lagerfeld also abhors stinginess, which he calls a terrible vice that often emerges in times of crisis among well-heeled people. "The money has to go out the window to come back through the door," he said.
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Judith Ripka believes the current mind-set will have a longer, residual effect than the actual recession.
"The day will come when consumers will not worry as much about how they spend their every dollar, but they will always remember these economic challenges when contemplating a purchase," said Ripka. "Luxury will continue to be desirable, but timeless and classic pieces will undoubtedly be the focus because of their lasting value."
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"No, luxury hasn't at all become a dirty word," said English accessories designer Anya Hindmarch. "Luxury is about taste, and taste has always been to me what's not wasteful. I'm not into excessive waste and showing off. The ultimate luxury for me is an old Jaguar E-type or my grandfather's watch. The bespoke Ebury bag we launched quite a long time ago now, it's something you’d hand on to your grandchildren. [Customers' choices] haven't changed massively. We've not had that blingy customer. People are being careful about what they spend. They're buying pieces that they know they're going to love in 10 years. The days of buying a bag that you're going to give away six months later are over."
The quotes go on and on in that vein. Essentially, no one knows what the luxury consumer is going to do next. Some people think that the New Austerity is here to stay. Some think that the minute the economy turns around people will start spending like crazy. We'll just have to wait and see.
