How does the luxury brand Hermes, along with other sought-after, expensive lines, survive a recession of this depth and scope? Despite news of consumer spending coming to a halt, the luxury exchange traded fund (ETF) hasn’t slowed down in recent months.
The sought after salt-water crocodile-skin bag that is forged in France has a waiting list that spans two to three years, and the prize for your patience is an opportunity to spend thousands on one of these objects. While many of its competitors are suffering under the strain of the global recession, Hermes, an iconic brand famous for its silk scarves and handbags, had a remarkably good first quarter, reports Russell Goldman for ABC News.
In fact, Hermes plans to open more stores this year, while competitors such as Gucci are shutting down shops. The secret? Hermes is at the top of the luxury pyramid, and they never overwhelm the market, producing only in limited numbers.
The post-recessionary climate may find other luxury brands copying the Hermes method, which means re-aligning brands with the new values that more thoughtful, careful and selective affluent shoppers will hold, reports JCK Online.
Nevertheless, analysts do not expect a full recovery within luxury markets until 2011-2012. A wave of consolidation in the luxury industry over the next year or so may materialize as companies try to survive, reports Anne D’Innocenzio for Associated Press.
- Claymore/Robb Reports Global Luxury (ROB): up 12.5% year-to-date; Hermes 4.3%
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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.