“Luxury goods, once considered immune from economic turmoil…”
I read a lot of financial news, and I have to wonder who these morons are who come up with these theories.
You know who buys the majority of Luxury goods? Is it the ultra rich? No, it is the normal Joes who are splurging on an up market product. Look around and you will see a fair share of 20 somethings driving around in Lexus and BMW. Good financial decision? No, but credit was easily available, and it was a status symbol so it was purchased, or leased.
This isn’t something that is limited to status focused 20 somethings, everyone does it. It might be a purse, or a car or a pair of shoes, and when there is extra disposable income, everyone has an upgrade they would like to partake in. If luxury brands truly only catered to the super wealthy, they wouldn’t have stores in malls.
I believe this happens at all levels, and during an economic downturn, people return to the level the are most comfortable at. If this is true, and Wal-Mart is the bottom rung retailer in the US, then Wal-Mart isn’t actually going to experience some growth. This is also a financial theory I have seen in the news a lot, but if everyone is stepping down their spending, how can luxury goods be immune to economic downturns.
Two economists, two theories that cannot both simultaneously exist. Good job guys! And thanks Big News for repeating their rubbish.