People Are Starting to Spend Money on Luxury Products Again
Consumers are ready to shop at high-end retailers like Louis Vuitton and Tiffany
After tightening purse strings in the early days of the pandemic, people are finally starting to feel comfortable dropping cash on pricey purchases again, and they’re not just maxing out their credit cards stocking up on toilet paper. Luxury goods sales are on the rise, and according to CNN, that’s good news.
On Thursday, luxury goods conglomerate LVMH — which houses high-end brands like Louis Vuitton, Fendi and Dior — reported solid earnings and a return to growth in its fashion and leather goods division last quarter, with revenue rising 12 percent compared to the same period last year. Jeweler Tiffany and Co. — which LVMH was previously set to acquire in a deal that ultimately unraveled amid the pandemic — also reported “extremely strong” sales, with positive trends continuing in October.
The rising sales in high-end leather goods and jewelry are good news for the global economy, suggesting consumers are getting more comfortable spending money on large, luxury purchases again. However, CNN noted there are still obstacles ahead. While sales in China have rebounded, they can’t sustain the entire business, and while both LVMH and Tiffany said activity in the United States was improving, consumer spending is still lagging behind where it was in January.
LVMH Chief Financial Officer Jean Jacques Guiony also noted that international tourism — which tends to drive luxury goods sales — is expected to remain muted amid the ongoing pandemic. On a conference call, Guiony reportedly told analysts he was “not particularly hopeful that we’ll see a lot of tourist inflows” before a COVID-19 vaccine is available.
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