FT warns of weakening luxury industry
During the Financial Times' Business of Luxury Summit in Monaco, Johann Rupert, chairman of Richemont, warned of the damage the luxury industry faces from a growing wealth inequality worldwide. SuperyachtNews.com asks whether the superyacht industry could be impacted in the same way.…
During the FT Business of Luxury Summit in Monaco earlier this month, Johann Rupert, chairman of Richemont and owner of Cartier and Van Cleef and Arpels, warned of the damage the luxury industry faces from a growing wealth inequality worldwide.
“What keeps me awake at night is how society will cope with structural unemployment and envy, hatred and class welfare,” he stated. “The people with money will not wish to show it. If your child’s best friend’s parents are unemployed, you won’t want to buy anything showy.”
In an article published by the Financial Times following the event, journalist John Gapper analyses a drop in luxury goods sales in China – one of the superyacht industry’s much-cited ‘emerging markets’ – as one result of the current political climate.
“[It] is a result of the crackdown on Communist party corruption, which has hit the local habit of giving expensive gifts to well-connected officials,” reports Gapper. “Bain and Co expects that luxury goods sales will fall in China in 2015 after years of being the biggest growth market.”
While Gapper admits there are still plenty of millionaires and billionaires in the world, he explains that the China crackdown shows what can occur suddenly to conspicuous consumption. “Officials there no longer want to be seen wearing expensive watches or driving in flashy cars… Perhaps discretion will be in more demand: minimalist jewellery instead of bling; Audis instead of Ferraris (although Ferrari plans an initial public offering); silver watches rather than gold chronometers,” he speculates. “A yacht is hard to disguise, but it can be sailed out of sight of public beaches.”
Asking the brokerage comminity whether a growing wealth inequality could have a similar ramifications on the superyacht industry, Ocean Independence’s Toby Maclaurin remains confident that it would remain resilient, due to its niche status. “I would say our industry's success lies in the previous paragraph; the ability to sail away out of sight,” he advises.
“We must safeguard the privacy and the freedom of our clients to enjoy time afloat. I would also definitely add a third watch word; ‘simplicity’. Yachting is unique in the world of luxury because we can offer experiences others can't match. However, we must keep a watchful eye on simplicity when it comes to delivering the all-important customer experience, we must not forget we are in the marine leisure business.”
“What keeps me awake at night is how society will cope with structural unemployment and envy, hatred and class welfare,” he stated. “The people with money will not wish to show it. If your child’s best friend’s parents are unemployed, you won’t want to buy anything showy.”
In an article published by the Financial Times following the event, journalist John Gapper analyses a drop in luxury goods sales in China – one of the superyacht industry’s much-cited ‘emerging markets’ – as one result of the current political climate.
“[It] is a result of the crackdown on Communist party corruption, which has hit the local habit of giving expensive gifts to well-connected officials,” reports Gapper. “Bain and Co expects that luxury goods sales will fall in China in 2015 after years of being the biggest growth market.”
While Gapper admits there are still plenty of millionaires and billionaires in the world, he explains that the China crackdown shows what can occur suddenly to conspicuous consumption. “Officials there no longer want to be seen wearing expensive watches or driving in flashy cars… Perhaps discretion will be in more demand: minimalist jewellery instead of bling; Audis instead of Ferraris (although Ferrari plans an initial public offering); silver watches rather than gold chronometers,” he speculates. “A yacht is hard to disguise, but it can be sailed out of sight of public beaches.”
Asking the brokerage comminity whether a growing wealth inequality could have a similar ramifications on the superyacht industry, Ocean Independence’s Toby Maclaurin remains confident that it would remain resilient, due to its niche status. “I would say our industry's success lies in the previous paragraph; the ability to sail away out of sight,” he advises.
“We must safeguard the privacy and the freedom of our clients to enjoy time afloat. I would also definitely add a third watch word; ‘simplicity’. Yachting is unique in the world of luxury because we can offer experiences others can't match. However, we must keep a watchful eye on simplicity when it comes to delivering the all-important customer experience, we must not forget we are in the marine leisure business.”
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