Luxury goods boom in Britain as super-rich young people brave recession

They’re young, rich, and mortgage-free, and the 1%’s offspring are in their roaring twenties.

Despite the economic gloom currently engulfing Britain and many other western countries, sales of luxury brands are booming and a growing number of shoppers are young adults.

Swiss watches, Louis Vuitton sneakers, rare Birkin bags and 81-year-old whiskeys are among the products driving impressive growth for luxury brands like LVMH, Burberry and Kering.

According to the Federation of the Swiss Watch Industry, imports of Swiss watches to the UK rose by 31% in the first half of 2022 – the Watches of Switzerland group’s average spend was around £6,000. Meanwhile, sales of watches under £2,500, sometimes dubbed ‘mid-range’, are falling.

A Rolex watch
Watches play a prominent role in the luxury resale market. Photo: /Alamy

Burberry’s sales are up 11% in the last six months, it was reported last week. LVMH, which owns brands like Dior, Tiffany, Moët Hennessy and Louis Vuitton, rose 28%, while Kering, the company behind Gucci and Balenciaga and others, was up 14%.

“I wouldn’t call luxury recession-proof – it feels like it’s tempting fate – but it’s an extremely resilient sector, both at the high end of the market and in the affordable luxury segment,” said Helen Brocklebank, Walpole’s chief executive , representing the British luxury market.

Tourists from the US and the Middle East are taking advantage of the strong dollar to head to the UK and European countries, according to James Ison, the self-proclaimed Deal Maker For The 0.1%, who started his company as a wrangler for the wealthy after his Rich Kids of Instagram account became popular.

Louis Vuitton
Louis Vuitton is a popular brand of designer bags. Photo: Christophe Petit-Tesson/EPA

“People have a yolo [you only live once] Wait a minute,” Ison said. ‘You drive down to Bicester Village and spend five figures in an afternoon. That includes many people who have fared well in the pandemic, online entrepreneurs.

“These are people who aren’t necessarily paying a mortgage or high fuel bills,” Ison said. “Children of very successful business people or international students. They are the younger generation who are more likely to bid on Louis Vuitton and Nike Air Force 1 sneakers at £7,000 a pair.”

This is the other side of the boom – the rise of the luxury reseller. Buying a watch, purse, or sneaker has become a new type of investment, although no one calls these resold investments “second hand.”

“During the pandemic, people were selling their Rolex for 150%, 180% more than retail,” Ison said. “They just don’t have the supply – the big luxury brands face the same problems as any other supply chain company, so you get people who are able to find something at retail and then sell it online 24 hours a day.” later for double.”

Sotheby’s and other traditional auction houses have set the tone, selling items like a Hermès Himalaya Birkin 30 handbag for $226,180 (£190,250) in 2021.

More modest deals are available online at sites like Vestiaire Collective, Trendy Tickers, and RealReal, which say Millennials and Gen Z shoppers make up 41% of their customers.

“People have more incentive to buy a watch than to save and buy a house,” Ison said. “It gives them opportunities – they buy status, that way they can rise in the crowd they hunt. And a watch is easier to sell than a house.”

According to Brocklebank, whiskeys are the British equivalent of Swiss watches. Last month an anonymous collector at Sotheby’s in London paid £300,000 for a bottle of Macallan’s The Reach, an 81-year-old single malt, the oldest whiskey sold at auction.

However, luxury goods makers in the UK are concerned that dollar-rich tourists will not return to London, preferring European destinations like Paris and Milan because the UK no longer allows tourists to reclaim VAT when they leave the country.

“I go to boutiques and department stores every day and it’s quiet,” said Melody Mashilompane, founder of Style Concierge by Melody, who is a personal shopper for many high net worth individuals.

“People are definitely not spending as much as they were six months ago,” she said.

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