Status: U Return-Path: Received: from mx-collie.atl.sa.earthlink.net ([127.0.0.1]) by mx-collie.atl.sa.earthlink.net (EarthLink SMTP Server) with SMTP id 1l52Db2F63Nl36t0; Tue, 25 Nov 2008 13:27:25 -0500 (EST) Received: from wsmarth-ovenbird.pas.sa.earthlink.net ([207.217.120.247]) by mx-collie.atl.sa.earthlink.net (EarthLink SMTP Server) with SMTP id 1l52Db2eW3Nl36t0 for ; Tue, 25 Nov 2008 13:27:25 -0500 (EST) Received: from domrl-brush.atl.sa.earthlink.net ([207.69.231.198]) by wsmarth-ovenbird.pas.sa.earthlink.net with smtp (Exim 3.36 #4) id 1L52d9-00011Y-00 for merileek@earthlink.net; Tue, 25 Nov 2008 10:27:23 -0800 X-ELNK-Loop: merileek@kerncommunications.com Received: from dukecmmtar01.coxmail.com ([68.99.120.48]) by domrl-brush.atl.sa.earthlink.net (EarthLink SMTP Server) with ESMTP id 1l52D84W83Nl5vE0 for ; Tue, 25 Nov 2008 13:27:22 -0500 (EST) Received: from merilee07cf8a9 ([68.15.13.44]) by dukecmmtar01.coxmail.com (InterMail vM.6.01.06.05 201-2131-130-106-20070212) with SMTP id <20081125182722.MNHN27464.dukecmmtar01.coxmail.com@merilee07cf8a9>; Tue, 25 Nov 2008 13:27:22 -0500 Message-ID: <9109AB13CDE144568C70E4C1E4FFC343@merilee07cf8a9> Reply-To: "Merilee:::Kern Communications" From: "Merilee:::Kern Communications" To: "Gilbert Gautereaux" , "'Kamran Razavi'" , "'Rob Gautereaux'" Cc: Subject: San Diego News Room placement Date: Tue, 25 Nov 2008 10:27:26 -0800 MIME-Version: 1.0 Content-Type: multipart/alternative; boundary="----=_NextPart_000_01D6_01C94EE8.698FC9E0" X-Priority: 3 X-MSMail-Priority: Normal X-Mailer: Microsoft Outlook Express 6.00.2900.5512 X-MimeOLE: Produced By Microsoft MimeOLE V6.00.2900.5579 X-ELNK-AV: 0 X-ELNK-Info: sbv=0; sbrc=.0; sbf=00; sbw=010; This is a multi-part message in MIME format. ------=_NextPart_000_01D6_01C94EE8.698FC9E0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable http://www.sandiegonewsroom.com/news/index.php?option=3Dcom_content&view=3D= article&id=3D6377:gina-giacopuzzi&catid=3D46:san-diego-business&Itemid=3D= 54 Demand for some luxury goods remains steady despite economy =20 Business and Finance - San Diego Business =20 BY Gina Giacopuzzi =20 Monday, 24 November 2008 16:16=20 =20 How many consumers are still buying the new Dooney & Bourke bag? = What about limo service to parties? Ferretti yachts? Bentleys? Global = luxury sales are expected to fall as much as 7 percent next year, = according to a report by Bain & Company, a global management consulting = firm. However, some retailers are finding bright spots in the market. = JustLuxe.com, a luxury lifestyle portal based out of San Diego, = announced record-breaking third quarter growth and profitability in = October, a 141 percent increase over the same period last year. The company offers access to a luxury hotel reservation system, = articles on high-end goods and services, and travel recommendations, all = of which are apparently still in high demand. The company's Web site = traffic increased 300 percent over the same period last year and expects = record-breaking revenue and traffic growth well into 2009. Gilbert = Gautereaux, president of JustLuxe.com, said the travel sections of the = site receive the most traffic, followed by luxury boats, cars and = planes. Part of the reason for this could be Bain's prediction that global = spending on luxury-goods products will surge in the next five years, as = much as 20 to 35 percent in some emerging markets. While what it calls = "accessible" brands, like Ralph Lauren, expect no growth by the end of = this year, "absolute" luxury brands like Hermes will still recognize an = 8 percent growth this year-down from 10 percent in 2007. James Hurley, = managing director of Telsey Advisory Group, recently said on CNBC that = the ultra-rich are not "price-sensitive," and the only thing that could = hurt luxury-goods sales are factors outside the market, such as = geopolitical risks or terrorism.=20 "It depends on the level of affluence," Gautereaux said. "The = wealthy-people valued over $5 million-will make some cuts, but the = super-wealthy (who have a net worth of over $10 million) will not." The foundation of the current economic downturn, the housing = market, does not affect top-tier earners because most don't have = mortgages, Hurley said. According to Business Week, top luxury home = prices were still going up early this year. About one-third of buyers of = $1 million-plus homes pay cash, making them less concerned about = interest-rate fluctuations and other issues. Some sectors of luxury goods struggle more than others, however. = According to the New York Times, between Oct. 15 and Nov. 15, luxury = hotels slashed their room rates by 5.4 percent while Nordstrom's = executives said clothing prices had been lowered by an average 22 = percent. Saks reported an 11.5 percent drop in sales this past quarter, = compared with a gain of 11.4 percent during the same period last year. = The combination of less demand and possible deflation have some = retailers trimming their inventories and store openings-Saks is ordering = 15 percent less merchandise for spring 2009. Gautereaux said some of the = hardest hit businesses are yacht and plane charters. Luxury cars are also among the hardest hit sectors. Bentley sales = are down 27.9 percent this year, while mass luxury brands like Mercedes = Benz and Lexus saw even sharper drop-offs. The worldwide operations = manager for Bentley was quoted as saying the drop-off wasn't because = customers couldn't afford a Bentley-it was because they didn't want to = "create the wrong impression in terms of extravagance and so on." According to a recent study by market researching firm Harrison = Group, 83 percent of individuals surveyed who were making more than = $100,000 a year said they would be able to weather the current economic = climate. However, only 50 percent agreed that "a few luxuries are = important in tough times." According to the company's chairman, this = could be indicative not of an inability to afford certain luxuries, but = of a changing definition of "living well." However, no sector is across-the-board immune from or victim to = the economic downturn. Rolls-Royce's U.S. sales are up 48.8 percent, = partly due to the release of their new models, while Lamborghini and = Ferrari expect 2008 sales to be on par with last year's.=20 The success of sites like JustLuxe.com and Gilt.com, an = invitation-only online version of sample sales, could be that luxury is = still important to some but not in the sense that it has been in the = past. Companies are scrambling to change their advertising approaches, = structuring ads to appeal to customers who don't want to appear flashy = but want to maintain their lifestyles.=20 "People need to reach their client in a down economy," said = Gautereaux. "They want to target their message"-one possible reason = JustLuxe.com has seen a jump in advertising. However, most of the site's = advertisers target the super-rich and are "holding their own." "It's the middle that's being squeezed," Gautereaux concluded. = "Wal-Mart's doing well, too. People are either going up or down." It remains to be seen when-or if-the super-rich will feel the = effects of the housing market, deflation and stock declines. As long as = there are five-star resorts to offer distractions from the current = economic news, it seems the demand will remain. =20 ------=_NextPart_000_01D6_01C94EE8.698FC9E0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
http://www.sandiegonewsroom.com/news/index.= php?option=3Dcom_content&view=3Darticle&id=3D6377:gina-giacopuzzi= &catid=3D46:san-diego-business&Itemid=3D54
 
Demand for some=20 luxury goods remains steady despite economy    
Business=20 and Finance - San=20 Diego Business
BY = Gina Giacopuzzi    =
Monday, 24 November = 2008 16:16=20
How=20 many consumers are still buying the new Dooney & Bourke bag? = What=20 about limo service to parties? Ferretti yachts? Bentleys? Global = luxury=20 sales are expected to fall as much as 7 percent next year, = according to a=20 report by Bain & Company, a global management consulting firm. = However, some retailers are finding bright spots in the market.=20 JustLuxe.com, a luxury lifestyle portal based out of San Diego, = announced=20 record-breaking third quarter growth and profitability in October, = a 141=20 percent increase over the same period last = year.
 
The=20 company offers access to a luxury hotel reservation system, = articles on=20 high-end goods and services, and travel recommendations, all of = which are=20 apparently still in high demand. The company's Web site traffic = increased=20 300 percent over the same period last year and expects = record-breaking=20 revenue and traffic growth well into 2009. Gilbert Gautereaux, = president=20 of JustLuxe.com, said the travel sections of the site receive the = most=20 traffic, followed by luxury boats, cars and = planes.
 
Part of the reason for this could be Bain's prediction = that global=20 spending on luxury-goods products will surge in the next five = years, as=20 much as 20 to 35 percent in some emerging markets. While what it = calls=20 "accessible" brands, like Ralph Lauren, expect no growth by the = end of=20 this year, "absolute" luxury brands like Hermes will still = recognize an 8=20 percent growth this year-down from 10 percent in 2007. James = Hurley,=20 managing director of Telsey Advisory Group, recently said on CNBC = that the=20 ultra-rich are not "price-sensitive," and the only thing that = could hurt=20 luxury-goods sales are factors outside the market, such as = geopolitical=20 risks or terrorism.
 
"It=20 depends on the level of affluence," Gautereaux said. "The = wealthy-people=20 valued over $5 million-will make some cuts, but the super-wealthy = (who=20 have a net worth of over $10 million) will = not."
 
The=20 foundation of the current economic downturn, the housing market, = does not=20 affect top-tier earners because most don't have mortgages, Hurley = said.=20 According to Business Week, top luxury home prices were = still=20 going up early this year. About one-third of buyers of $1 = million-plus=20 homes pay cash, making them less concerned about interest-rate=20 fluctuations and other issues.
 
Some sectors of luxury goods struggle more than others, = however.=20 According to the New York Times, between Oct. 15 and Nov. 15, = luxury=20 hotels slashed their room rates by 5.4 percent while Nordstrom's=20 executives said clothing prices had been lowered by an average 22 = percent.=20 Saks reported an 11.5 percent drop in sales this past quarter, = compared=20 with a gain of 11.4 percent during the same period last year. The=20 combination of less demand and possible deflation have some = retailers=20 trimming their inventories and store openings-Saks is ordering 15 = percent=20 less merchandise for spring 2009. Gautereaux said some of the = hardest hit=20 businesses are yacht and plane charters.
 
Luxury cars are also among the hardest hit sectors. = Bentley sales=20 are down 27.9 percent this year, while mass luxury brands like = Mercedes=20 Benz and Lexus saw even sharper drop-offs. The worldwide = operations=20 manager for Bentley was quoted as saying the drop-off wasn't = because=20 customers couldn't afford a Bentley-it was because they didn't = want to=20 "create the wrong impression in terms of extravagance and so=20 on."
 
According to a recent study by market researching firm = Harrison=20 Group, 83 percent of individuals surveyed who were making more = than=20 $100,000 a year said they would be able to weather the current = economic=20 climate. However, only 50 percent agreed that "a few luxuries are=20 important in tough times." According to the company's chairman, = this could=20 be indicative not of an inability to afford certain luxuries, but = of a=20 changing definition of "living well."
 
However, no sector is across-the-board immune from or = victim to the=20 economic downturn. Rolls-Royce's U.S. sales are up 48.8 percent, = partly=20 due to the release of their new models, while Lamborghini and = Ferrari=20 expect 2008 sales to be on par with last year's. =
 
The=20 success of sites like JustLuxe.com and Gilt.com, an = invitation-only online=20 version of sample sales, could be that luxury is still important = to some=20 but not in the sense that it has been in the past. Companies are=20 scrambling to change their advertising approaches, structuring ads = to=20 appeal to customers who don't want to appear flashy but want to = maintain=20 their lifestyles.
 
"People need to reach their client in a down economy," = said=20 Gautereaux. "They want to target their message"-one possible = reason=20 JustLuxe.com has seen a jump in advertising. However, most of the = site's=20 advertisers target the super-rich and are "holding their=20 own."
 
"It's the middle that's being squeezed," Gautereaux = concluded.=20 "Wal-Mart's doing well, too. People are either going up or=20 down."
 
It=20 remains to be seen when-or if-the super-rich will feel the effects = of the=20 housing market, deflation and stock declines. As long as there are = five-star resorts to offer distractions from the current economic = news, it=20 seems the demand will remain.=20
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