the luxury dos and don'ts in times of crisis

Here's an instersting article by Cotten Timberlake, published on the Bloomberg website on how the current crisis will influence our spending on luxury items and how certain brands, including VC can come out the bigg winners


The online article: Bloomberg

Oct. 8 (Bloomberg) -- In-your-face luxury is suddenly very passe.

Ostentatious taste and conspicuous consumption will make way for conservative looks and ``stealth wealth'' in the wake of the worldwide financial crisis, said Milton Pedraza, chief executive officer of the Luxury Institute in New York.

``Nobody wants to be the luxury pinata,'' Pedraza said in an interview yesterday after a global sell-off sent markets reeling from Europe to Asia. ``Who wants to be the focus of attention on greedy spending in a tremendous crisis?''

Luxury consumers will still covet extraordinary things, but they'll spend less and won't let everyone know what they're consuming, Pedraza said. That may be especially true for members of the financial industry, he said.

``If you made your money on Wall Street, you are going to be an unpopular guest,'' Pedraza said. ``You clearly need to be discreet, far more than those who made their money in, for example, technology. Even Donald Trump is going to be a little more subdued.''

Bloomberg News asked Pedraza to identify the dos and don'ts of luxury consumption during a financial meltdown. His firm surveys the wealthy regularly and sells data to clients including major luxury-goods makers.

Living in ``a huge McMansion'' is out, and buying a ``classic Colonial'' is in, Pedraza said. Owning the biggest yacht is out, and choosing an environmentally friendly model is in, he said.

``I don't think you'll want to show up in your orange Lamborghini,'' Pedraza said. `You might want to bring your navy blue BMW instead.''

Fewer Insignias

Oversize watches are no-nos, he said, while classic timepieces are de rigueur. Likewise, forget $10,000 mobile phones and buy an iPhone instead.

Insignia mania will subside as the wealthy get frugal, Pedraza predicted. That should benefit brands like Hermes, Bottega Veneta, Salvatore Ferragamo, Patek Philippe and Vacheron Constantin, he said.

``Logo-free is optimal,'' Pedraza said. ``Logo-subdued is the next-best alternative.''

Men's fashions will undergo a noticeable change, he forecast.

``The `I'm-rich-but-casual' look is out, and the `I'm- credible-and-conservative' suit and tie are in,'' Pedraza said. ``You don't want to be the most casual-looking guy in the room with a custom shirt and chinos.''

The tie will make a big comeback, he predicted, with men favoring slender styles with sedate patterns over solid bright- colored ties with big knots.

Loafers Out, Wingtips In

In the current environment, bold, multicolored shirts with French cuffs and bejeweled cuff links are ``tacky,'' Pedraza said.

Loafers -- in particular, rubber-studded driving shoes -- now seem ``flimsy'' and streamlined wingtips are the better, more substantial choice, he said.

Pedraza also said more men will start carrying attache cases as a symbol of gravitas. As for the bigger picture, the luxury expert sees a gender shift.

``Women are in as CEOs and board members, men are out,'' Pedraza said. ``Men have lost a lot of credibility.''

To contact the reporter on the story: Cotten Timberlake in Washington at ctimberlake@bloomberg.net