Over the last year or so, many consumers traded down to discounters like Wal-Mart Stores
According to a Wall Street Journal article today, consultancy Bain & Co. said that luxury-goods sales were expected to drop by 8% worldwide this year. The consulting firm doesn't expect a full recovery of the luxury-goods market until 2011 or 2012. But the firm did note that companies aren't being forced to discount their luxury products quite so deeply, suggesting that some shoppers are willing to pay full price again.
On the other hand, researcher Unity Marketing asserted that spending on luxury goods in the third quarter surged by 29% among high-income consumers, according to a Bloomberg report. The news service also cited a MasterCard
Don't get too excited, Fools. Rather than portending a full-fledged recovery in the luxury market, this uptick could simply represent a surge of pent-up demand among customers weary of pinching their pennies.
Still, these signs of life may spell good things to come for companies with venerated luxury brands, such as Tiffany
Whether these surveys bode well or ill, investors should remain choosy about luxury-goods stocks. Despite September's signs of increasing consumer confidence, real issues such as high unemployment and overly indebted households still plague our economy. Consumers may treat themselves to an occasional high-end item here and there, but the era of conspicuous consumption is probably over for now.
What do you think? Will the luxury-goods market's malaise linger? Or are consumers getting ready to binge on luxury once again? Leave your comments in the boxes below.