Purveyors of luxury goods, once seen as immune to a downturn but susceptible nonetheless, are beginning to see their businesses pick up. Related luxury retail exchange traded fund (ETF) may begin to show some splendor as the most moneyed spenders start to relax a little.
The wealthy are spending again, but they are also cautiously taking a handle on costs and prudently looking for the best deals, comments Geraldine Fabrikant for The New Nork Times. After the financial crisis hit, many people, even those who came out relatively unscathed, are pulling back, realizing that the possibility of losing their wealth is real.
Many different industries are relieved by the uptick in spending by the rich, including:
- Yacht builders have seen decreased orders of luxury sailboats and powerboats priced from $400,000 to $1.5 million, but orders are beginning to increase.
- Mark Aaron, spokesman for Tiffany & Co. (NYSE: TIF), said that sales of jewelry pieces that cost more than $50,000 rebounded for the 12 months that ended Jan. 31. [ETF Strategies for the Retail Rebound.]
- The private jet business may have been the hardest hit by the downturn. Richard Aboulafia, a consultant at Teal Group, says “the good news is that people have stopped dumping jets, the bad news is that there is still a lot of inventory and prices are flat.”
- Luxury hotels are experiencing a slow recovery. Ritz-Carlton Hotels remarks that people “are not taking suites as much” and that “they are opting for club lounges where they pay a premium to use a club where they can eat and drink and be merry.”
For more information on luxury-related stories, visit our ROB category.
- Claymore/Robb Report Global Luxury (NYSEArca: ROB): Tiffany is 2.8%. This is the only luxury shopping ETF available; other holdings include luxury hotels, high-end accessories and department stores.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.