There’s a lot of talk these days about a rebound in spending on luxury items and what it all means for the recovering economy.
Jeweller Tiffany & Co. recently reported that it more than doubled its first-quarter profit, thanks in part to increased appetite for so-called “statement pieces” priced US$50,000 and up, while the market for luxury homes in the United States appears to be bouncing back in some cities. Other high-end retailers, from Saks to Macy’s, have also reported a rebound in sales.
But some analysts warn that just because society’s upper echelons are feeling better about themselves doesn’t mean that consumer confidence has returned in full force. For one thing, the wealthy were more likely to be buoyed by last year’s market recovery than those with relatively thin investment portfolios. Meanwhile, unemployment remains stubbornly high and many workers are still bringing home less than they did before the recession.