Are luxury brands recession-proof?

[Davidvictorson]

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

Very epic reply.
They are not affected by the recession in anyway. Infact, they may just as well be the reason why recessions happen due to their impact on these economic policies. I have seen my president and governors in hundreds of thousands of dollar worth of wrist-watches during a time when the citizens were struggling with being able to afford food and pay for basic stuffs. These folks were on tv flaunting them.

Luxury brands are recession-proof because of these folks.

[Jateng]

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

Luxury goods will always thrive during economic slowdowns because they cater to a very specific group of consumers who are largely insulated from broader financial pressures, obviously wealthy individuals still have disposable income and tend to view luxury purchases not just as items, but as symbols of status, success, or just investment so they will always spend. Somtimes these goods even become more desirable during uncertain times because they are seen as lasting assets and just ways to signal stability and prestige. So long they target the wealthy, the economic situations to an extent does not really affect luxurious brands

People who are financially strong will definitely use luxury brands. For them it does not matter how much money is being spent because those brands show their quality. Exclusive consumers only use luxury brands. Most of them project their power and prestige to other people without worrying about their financial status although luxury items are not even used in their daily lives. Luxury brands are limited only to rich people because they are expensive because people who meet basic needs do not use luxury brand items. Despite this luxury brands do not suffer any loss but they remain stable and even increase in price.

[sunsilk]

Despite this luxury brands do not suffer any loss but they remain stable and even increase in price.

They are desired by people who like to social climb and that's why despite that there's a recession, we can say that people still purchase them.

Because even with the pandemic, those who likes to own it will just justify that they rather have it before they die than not to have it.

And they're good in marketing because they are teaching their staff to hit the ego of their potential customers through telling them they're not allowed to touch any of their products so, they'll purchase it as their ego shows that they can afford it.

[hafiztalha]

Despite this luxury brands do not suffer any loss but they remain stable and even increase in price.

They are desired by people who like to social climb and that's why despite that there's a recession, we can say that people still purchase them.

Because even with the pandemic, those who likes to own it will just justify that they rather have it before they die than not to have it.

And they're good in marketing because they are teaching their staff to hit the ego of their potential customers through telling them they're not allowed to touch any of their products so, they'll purchase it as their ego shows that they can afford it.

Luxury brands are not bought by poor people and poor people are impacted by recession and we saw Many recession periods in the World and everytime there was a big loss of poor people because poor people have a limited things and they will not buy costly things and costly things bought by rich who have millions of dollars and recession period and inflation does not matter for that kind of people. People are watching the prices of big brands which are going up and up and people are buying that because they know that is due to the name of brand which they made for that years and now that is time to earn and they developed different strategies to make their brand at top quality and now they are dominant in the market and can sale everything which they want.

[hyudien]

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

Very epic reply.
They are not affected by the recession in anyway. Infact, they may just as well be the reason why recessions happen due to their impact on these economic policies. I have seen my president and governors in hundreds of thousands of dollar worth of wrist-watches during a time when the citizens were struggling with being able to afford food and pay for basic stuffs. These folks were on tv flaunting them.

Luxury brands are recession-proof because of these folks.

Agreed, that's one reason luxury goods are recession-proof.
And from what I know, well-known luxury brands also tend to maintain their value over the long term and can even increase in value due to scarcity, as they're typically not produced in large quantities. This has also given rise to the perception that these items are investment-worthy.

[SUPERSAIAN]

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

Good answer, when customers keep buying luxury things while won't luxury brands keep thriving because they buy quality and valuable stuffs and the rich and influential people in the society always go for the best things therefore the luxury brands also keep making those items available all the time. Recession only affects the poor but for those who are rich and wealthy, they are used to luxury lifestyle that is the reason why some of them after buying those luxury stuffs they come on social media and begin to say ''luxury or nothing''.

That's a correct answer. Some segments of society are unaffected by economic crises, and perhaps even the people who create economic crises are part of this minority. The clientele of ultra-luxury brands is already well-defined. Even middle-class people haven't been customers of these brands, even when economies were doing well. Therefore, it's perfectly natural that they are unaffected.

[BRINIRHA]

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

Actually, the answer is quite simple because we know that luxury goods consumers are not from the lower-middle class. They are usually from the upper class or the upper-middle class. And we know that when the global economy is uncertain, it is actually the lower-middle class who are most affected, as their income is truly unstable and many have even lost their jobs due to the declining global economy. But the upper class or wealthy people are actually accustomed to living with expensive luxury goods from the start. even the basic ingredients they usually buy for food are usually much more expensive because they prioritize quality. This is in contrast to the lower class, who are accustomed to choosing cheaper goods or ingredients without worrying about whether they are of the best quality or not. The important thing is that they are suitable and healthy for consumption. Therefore, inflation is sometimes more noticeable among the lower class than the upper class. The upper class is accustomed to buying above market prices, while the lower class is accustomed to buying at market prices.

[dansus021]

In standard economics, when prices go up, demand goes down. Luxury items are often Veblen goods, where a higher price actually increases demand.

One of the more curious phenomena in economics is the concept of Veblen goods. Named after the American economist Thorstein Veblen, these are products that defy the typical laws of supply and demand. Instead of becoming less desirable as their prices increase, Veblen goods become more desirable precisely because of their high prices. They represent a fascinating intersection of economics, psychology, and sociology, revealing much about human behavior and social dynamics.

In traditional economics, there’s a simple rule: when prices go up, demand goes down. This makes sense because most people prefer to pay less for the same product. But Veblen goods operate differently. For these products, higher prices don’t deter buyers they attract them. Why? Because Veblen goods are about more than just utility; they’re about status. - This actually great article bout your question (https://umbrex.com/resources/tools-for-thinking/what-is-veblen-goods/)

People give more importance to small, shiny new ornaments and affordable statement pieces when they’re cash strapped than when they have a lot of disposable income.

This phenomenon is called the ‘Lipstick Effect’, although it extends to other beauty products and small luxuries as well - Link

[viljy]

This industry never feels a crisis. Because in any difficult times, the demonstrative consumption of the elite only increases. The best banquet is a banquet during the plague. Actually, I've already written about this topic here in the thread. I will only add that it is very difficult to create a business in the luxury industry. The main thing there is to grow a brand, which then ensures guaranteed sales. In other words, the business structure is very different from the mass segment.

[Mr_Brilliant$]

it is simply because the people that use to buy luxury things are not heavily affected by any economic slowdowns. 
When an economy weak, it mostly the middle class and lower class earners that feel the pressure...  In a failing economy most of the low class earners sometimes lose their jobs, face salary red reduction, they will even have to reduce spending to focus on essentials. While the wealthy ones, maybe already have multiple income streams, investments, businesses, assets, so their financial stability is even barely tied to those short term economic conditions..
So for someone who is already used to a certain standard of living that he or she can afford, a slower economy will not automatically change their spending habits..

[Faisal2202]

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

No, they are not recession-proof, they are in demand all the time. Rich people have a hell lot of money, and they are always buying brands. Their lifestyle has a higher standard, so they need to wear branded items. They won't wear anything that is not a brand. So with the recession, the poor are becoming poorer and the rich are getting richer.

So the demand is not decreasing but increasing. But I have seen some brands losing value but that is also marketning because the real cost value of such products has always been lower like too low that rich people pay at least 5x of the original price while buying brands.

[terrific]

This industry never feels a crisis. Because in any difficult times, the demonstrative consumption of the elite only increases. The best banquet is a banquet during the plague. Actually, I've already written about this topic here in the thread. I will only add that it is very difficult to create a business in the luxury industry. The main thing there is to grow a brand, which then ensures guaranteed sales. In other words, the business structure is very different from the mass segment.

I think that you're right. I remember last year where there were chinese manufacturers that have exposed the luxury bag industry.
They've said that they're the ones making it and just exporting it to the countries where these luxury brands originated just to get stamped.
But even with that expose' done by the chinese manufacturers, it seems that people are still buying on it.
So, with bad publicity and crises that happens to the world. They're still staying strong.

[Findingnemo]

As long as people find value in those brands they will keep buying it, so it kind of mange the level of demand and supply no matter what and even if the sales dropped a lot still those compnaies have enough cashflow to manage their business for long time so even if the recession hits they will be same until they feel there is no chance of recovery.

[Orpichukwu]

..I will only add that it is very difficult to create a business in the luxury industry. The main thing there is to grow a brand, which then ensures guaranteed sales. In other words, the business structure is very different from the mass segment.

And I will also have to go with the saying and belief of some that "not all businesses are meant for the common people." You need to have some level of connection to a certain class of elites and command certain respect before you can succeed in some kind of business, and luxury business is among this list. To build a brand in luxury, you need customers whose patronage also has a voice in promoting the brand among their colleagues.

[khiholangkang]

Luxury goods are immune to recession but it is necessary to measure first how big the recession is so that it can be a benchmark in the price index for luxury goods, because luxury goods are bought by rich people, as long as these rich people do not have major problems in their economy then their demand will remain the same for luxury goods, because most of the recessions that are affected are from the lower middle class who do not buy many luxury goods, we need to see the strength of demand first.

[abhiseshakana]

Luxury goods are immune to recession but it is necessary to measure first how big the recession is so that it can be a benchmark in the price index for luxury goods, because luxury goods are bought by rich people, as long as these rich people do not have major problems in their economy then their demand will remain the same for luxury goods, because most of the recessions that are affected are from the lower middle class who do not buy many luxury goods, we need to see the strength of demand first.

Talking about luxury items always bring me to 3% of population in the toop of pyramid. For ultra rich people recession is defined as fluctuation in their financial life, except there are market collapse or credit freeze, their consumption pattern will remain the same. On modern economy, wheb economy down, only rich people has cash and credit access wich bring effect of wealth accumulation and strengtening wealth concentration to the top of pyramid, when it happen they spend more on luxury shopping and we see luxury booming when working class struggle to eat, what a very sad gap. So luxury market is driven by these population not majority of us, which mean even economic slowing down luxury market can be have significant grow. So i conclude luxury as indicator of economic gap which mean economy divided, the 3% become reacher and population on bottom of pyramid increasingly suffering and depressed

[Fortify]

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

They don't. Luxury items sell better when the economy is most buoyant and they often suffer the most out of all companies when an economy hits. Billionaires and millionaires are not immune to a recession, they often go into survival mode too as business values shrink which is often where they hold most of their fortune. They will close the lowest performing stores and optimize like everyone else. It is a myth that anyone who does just a little bit of research before suggesting it would dispel the idea.

[Samlucky O]

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

What you should know is that, even if the economy slows down, it doesn't mean that everyone is slowing down. Even in the worst situation of the country there must always be people who are living well. This means that all fingers are not  equal. Some are poor some are average and some super rich, so if the worst case scenario happens it will affect the poor most, but the rich will still continue with their luxury. Afterall luxury is not for the poor but for the rich, so when global economy slows down, it affect those that can't afford luxury.

[whiteblue]

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

What you should know is that, even if the economy slows down, it doesn't mean that everyone is slowing down. Even in the worst situation of the country there must always be people who are living well. This means that all fingers are not  equal. Some are poor some are average and some super rich, so if the worst case scenario happens it will affect the poor most, but the rich will still continue with their luxury. Afterall luxury is not for the poor but for the rich, so when global economy slows down, it affect those that can't afford luxury.

When the economy slows down, there will definitely be people who benefit and there will be opportunities at that time or there are people who benefit from the economic slowdown, we are talking about money circulation where when it slows down it means it is collected in several parties and they are the ones who will benefit, but for the poor people on average they will suffer when that happens, on the other hand the rich who are luxurious will not be disturbed, they can still buy luxury goods and go on vacation wherever they want.

[CageMabok]

When the economy slows down, there will definitely be people who benefit and there will be opportunities at that time or there are people who benefit from the economic slowdown, we are talking about money circulation where when it slows down it means it is collected in several parties and they are the ones who will benefit, but for the poor people on average they will suffer when that happens, on the other hand the rich who are luxurious will not be disturbed, they can still buy luxury goods and go on vacation wherever they want.

A slowdown in economic circulation, or in other words, a slowdown in the circulation of money within society, must have a cause and effect that causes it to occur in a region or area. Therefore, if we draw the core solution, it is necessary to maintain money or income so that life can be carried out without disruption to the point of causing ourselves suffering. Because we can all see how the rich can still enjoy a luxurious life without feeling the effects of a slowdown through economic growth, and this is proof that those with money can still live as usual without experiencing any suffering in their lives.