December 15, 2008--How They're Spending It

I have a friend who writes a column for the Financial Times’ monthly supplement “How to Spend It.”

The glossy magazine highlights the latest in the glitz and glamour of the lux-life. Its articles and ads (its true raison d’être) are devoted to high-priced products (yachts, mansions, interior design, jewelry, watches, haute couture, and fancy cars) as well as fashion advice and columns about what’s happening and especially selling in the arts, gardening, food, and the hotel and travel business.

But, I hear, the FT is scaling it back. It seems that not only do the mega-rich have less to spend but those who are spending at the level “How to Spent It” promotes are doing so more and more surreptitiously.

In fact, as the New York Times reported recently, some of the most indulgent shopping is going on out of view. As an editor of Allure magazine puts it, “Shopping is a little vulgar right now.” It might have been more honest to say that shopping for $1,200 Marc Jacobs handbags in public is vulgar right now but buying them in private at showings in hotel suites is socially acceptable. (See article linked below.)

Robert Burke, a luxury retail consultant (whatever that is) said, “People don’t want to be as public about shopping for luxury goods as they were in the past. It feels good to buy and this is a time for feel-good things.”

Eve Goldberg, a Manhattan diamond dealer, is sensing the same trend: “People are saying, ‘It’s that time of year; I want to buy something, but I feel a little weird.’ Often they will tell me, ‘I don’t want to be out there making an announcement with a big bag that says Harry Winston.’”

I do understand the shopping bag thing. During an earlier, more prosperous time when many wanted to been seen walking around with Saks and Bendels bags, an aunt of mine who couldn’t afford to shop in such places had a collection of bags from high-end shops that she used to carry around her extra sweater or her purchases from Macy’s or Klein’s On the Square.

And I do see evidence of the new covert shopping right here in the apartment building where I live. Every day at about this time the lobby fills up with an increasing number of packages for residents who are more an more doing their shopping via the Internet. The doormen tell me that this is not just because everyone is busier than in the past and that this is a convenient way to shop. In fact, and this suggest what is really going on for many, quite a few of the residents are asking the staff not to mark the apartment numbers on the boxes since they do not want their neighbors to know how much they are buying.

An acquaintance who owns a company that serves as a direct mail middleman for luxury goods sellers—where if you want to purchase designer product for yourself or send one as a gift, his firm has access to these products and will, for a fee, arrange this for you. Countercyclically his business is booming. Much of the increase in volume, he feels, is of this surreptitious sort.

And, he adds, at least 25 percent of his non-gift sales are actually in effect gifts—ones that his customers ask be sent to themselves. Gift-wrapped and with cards that are frequently saying—“This is for you. You’re special. You deserve it.”