Are luxury brands recession-proof?

[simonova]

Why do luxury goods often thrive even when global economies slow down?

[Despairo]

It's because the luxury brands' customers are not affected by recession.

The economies slow down, but if they're the first hand suppliers, both sellers and end customers will still buy the product because they really need it. Example if we want to clean our teeth, we need a toothbrush and a toothpaste, do people want to create their own toothbrush and toothpaste when they can buy it in cheap price? most people won't.

Since many people depend on rich people's product, those rich people are safe and they can as much as they want, including to buy products in luxury brands.

[retaur]

I thought they were somewhat impacted but not as much. Mostly because many of their margins are fairly loose (they make decent profit per item sold and usually make things out of parts that can be widely sourced)..

Recessions push economic hardship onto those that are poorest in an economy and don't effect the wealthier parts all that much (or people with decent savings).

The wealth and value in an economy aren't often lost, they're just transferred to those who can take the risk of who perceive/know there's less risk in a sector.

[yslyv]

Why do luxury goods often thrive even when global economies slow down?

when global economies slow down, the middle class generally disappears... The number of the very rich increases slightly, while the number of the poor rises so much...
And yes when this gap widens, luxury consumption also raises. you can see more luxury things like cars etc in this case...

[Ultegra134]

when global economies slow down, the middle class generally disappears... The number of the very rich increases slightly, while the number of the poor rises so much...
And yes when this gap widens, luxury consumption also raises. you can see more luxury things like cars etc in this case...

I remember seeing a documentary about luxury goods such as Gucci bags and similar accessories (most shown were woman ones, if that's relevant). It claimed that a large number, if not the majority of their customers weren't wealthy people, but the middle class, because they wanted to appear rich (social status whatsoever), the truly rich people didn't bother with such petty items. It's been a while since I last saw the reportage, so I don't quite remember the details, but a quick Google search brought similar results to those I mentioned.

Link's here.