FLORIDA, December 8, 2012 — Not so long ago, people expected superior quality when they purchased a luxury good. Designer labels and the like really weren’t brought into consideration.
Today it is a different story.
Along with our society as a whole, the luxury industry has changed tremendously over the last several decades. What were once small companies catering to generational wealth have become international powerhouses devoted to the public at large. Personalized product lines have morphed accordingly into mass-produced inventory.
One might wonder just what the Twenty-First Century definition of a luxury good is.
Dana Thomas would surely know. As a fashion journalist, she has covered the industry’s ever-changing norms and standards for too many publications to mention. In her 2008 book “Deluxe: How Luxury Lost Its Luster,” the trials and tribulations of high-end merchandising are explained in fascinating detail.
In this first part of our discussion, Thomas explains why the luxury industry has embraced the idea of popular appeal as of late. She also addresses the industry’s increasingly populist nature, whether or not handmade goods are still prevalent, and much more.
Joseph F. Cotto: The luxury industry has taken a turn toward popular appeal over the last few decades. In your research, did you find a specific reason for this?
Dana Thomas: In the old days — say pre-1990 — the luxury business was primarily small companies run by the founders or their heirs. It was a niche business for a niche clientele, and there was great pride and integrity in the product because it bore the designer’s name.
Since about 1985, many of these old luxury companies have been taken over by business executives who had no previous ties to luxury or fashion — they came from real estate, finance. Their goal was to make money. To do this, they “renovated” the brands, installing young, household-named designers, amping up advertising, opening stores around the world, even getting into the outlet business, and turning those small companies into multi-billion-dollar global corporations.
To understand the growth, consider this: in 1977, Louis Vuitton had two stores — Paris and Nice — and did about $14 million a year in sales. Today, it has more than 400 stores, often next to or across the street from McDonald’s, and does reportedly more than $7 billion a year in sales. That says it all.
Cotto: One of the gravest concerns cited with the luxury industry is its increasingly populist nature. Do you believe that this is really a problem?
Thomas: No, I don’t believe luxury going populist, or democratic, as luxury titans like to say, is a problem. On the contrary, I think it is wonderful that anyone with the desire and the money can walk into a luxury brand store today and purchase what they want without feeling anxiety regarding their station in society or receiving a snobby response from staff. That to me is true democracy.
The problem is the listing of luxury brands on the stock market: with that, the raison d’être of these companies has switched from producing beautiful products to producing beautiful profits. Shareholders want to see growth every quarter, and to achieve that, companies have cut corners and sacrificed their integrity, which, in my view, is anti-luxury.
Cotto: Not too long ago, businesses selling the finest of luxury goods tended to be family owned. Why do you believe that this has changed?
Thomas: Many of the founders or owners grew old and retired, and either had no heirs, or their heirs weren’t interested, or worse, their heirs drove the companies into the ground. (Think of Gucci). So they sold the companies to investors or luxury brand groups.
Cotto: Handmade goods have traditionally been a hallmark of the luxury industry. Are these still prevalent today?
Thomas: It is increasingly rare. Most luxury goods are produced like any other product today, assembly line, often in China or another developing nation, where labor is cheaper. The prices are just higher for handbags, for example; the retail price is roughly 12 times the production cost.
There are a few companies that still make some items wholly by hand, by one craftsman from beginning to end — most notably Hermes, who still has artisans producing their Kelly, Birkin and other handbags that way, to order. But that is why there is a wait list for those items — because it takes longer to make them. Haute couture is still made primarily by hand and made to measure. And of course, suits on Savile Row are made to measure.
This article is the copyrighted property of the writer and Communities @ WashingtonTimes.com. Written permission must be obtained before reprint in online or print media. REPRINTING TWTC CONTENT WITHOUT PERMISSION AND/OR PAYMENT IS THEFT AND PUNISHABLE BY LAW.