Are luxury brands recession-proof?

[eightdots]

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.

A downturn in the economy doesn't mean the same thing for everyone. There are people with money who become richer in such situations, and the amount of luxury consumption they engage in increases as the number of wealthy people grows. An economy falling below a certain level causes some people to become poorer and others to become richer. Some people seize opportunities in such situations and become wealthy, and the goods they consume may become luxury goods.

In these cases, consumption habits change over time, and interest in luxury goods increases. While not true for everyone, a large portion of the wealthy consume luxury goods.

[justdimin]

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.

Depends on who you are talking about. If we are talking about "billionaires", as in B, then no, they are not in survival mode, they never are. In fact, luxury brands are mostly towards women, men maybe could buy supercars and yacths, but women could go to shopping and spend 300k like nothing if they are wealthy, bags, furs, shoes, whatever and they could buy from the most expensive brands there is.

So when they have billions, they do not care about a 300k shopping that day, it's nothing to them, like spending 10 bucks for us. It is not going to matter for them at all, they are going to end up with absolutely nothing when the market gets a hit. Sure it is not good for the business itself, but their personal wealth won't be hit.

[shinratensei_]

Luxury brand is recession proof in a small to moderate recession. When shit hits the fan and disaster happen, nobody would even think about luxury brand.
Something like total war is where the luxury brand gonna lose its value while gold retain its value.

[Dareo]

Luxury brand is recession proof in a small to moderate recession. When shit hits the fan and disaster happen, nobody would even think about luxury brand.
Something like total war is where the luxury brand gonna lose its value while gold retain its value.

However, I think it is not always the case that luxury brands completely collapse in small or medium recession, because their main customers are not ordinary people, but high net worth class, During Covid we have seen many luxury brand sales recover quickly, because the spending power of rich people does not decrease so easily, so it is a bit difficult to call its direct evidence of recession. However when we speak of a full scale war or extreme crisis, things change. In this case, gold has been historically valued, as it does not rely on any company or brand. To me luxury brands and gold are two distinct assets. The value of one is from brand, demand and lifestyle, the value of the other is from security and long term trust.

[shinratensei_]

However, I think it is not always the case that luxury brands completely collapse in small or medium recession, because their main customers are not ordinary people, but high net worth class, During Covid we have seen many luxury brand sales recover quickly, because the spending power of rich people does not decrease so easily, so it is a bit difficult to call its direct evidence of recession. However when we speak of a full scale war or extreme crisis, things change. In this case, gold has been historically valued, as it does not rely on any company or brand. To me luxury brands and gold are two distinct assets. The value of one is from brand, demand and lifestyle, the value of the other is from security and long term trust.

That's exactly what I'm saying. Luxury brands are pretty much low to mid level recession proof and won't collapse because their customers are entirely different demographic. Their customers are the people who bet on the market when recession happen with capital you won't even think of.
In a total recession though, these luxury brands might collapse because simply put, their customers are affected too.

[EarnOnVictor]

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

It's because luxury goods are originally designed for the rich.

By that, I mean the ultra-high-net-worth individuals in society. Some people could fake that they are rich, but they are exposed when the economy slows down. But the true rich people often continue to live their frivolous/luxurious lifestyle unaffected. For instance, can economic slow down make expensive football/basketball players stop buying their luxuries, or would it make leaders in the industries stop looking and smelling luxurious? I guess not! Since they are the main customers of the luxury goods, the business continues to thrive.

[o48o]

I've been trying something lately. Middle income people still have luxury brands, but at the moment the are struggling and need cash and they sell stuff online.

They need fast cash, and they don't have much experience of product placement, advertising and selling, so they are often selling luxury products with fraction of the price (if you know where to look).

And all i need to do is confirm that's legit, buy it and sell it 2x or even 3x prices with better photos and placement, as i know where to sell and have time to wait. That's now my side hobby. I am thinking i should scale it up, but it's time consuming if i want max profit from them.

[Marvelockg]

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

It is not about the brand being a luxury brand or not. any brand that remains relevant even in the midst of economic downtime does so because the people that patronize them are still doing well in such time and considers it wise that in the midst of war or challenges that they can still key into such product.  even from a buyer point of view, if you are buying  a luxurious item for the wrong reason at the time that the economy is not doing so well, you will to suffer for it because luxury serves the right function when it also has a resell function and you can afford to get it and  your finances wont shrink in the process.
 

[Unknown Op]

However, I think it is not always the case that luxury brands completely collapse in small or medium recession, because their main customers are not ordinary people, but high net worth class, During Covid we have seen many luxury brand sales recover quickly, because the spending power of rich people does not decrease so easily, so it is a bit difficult to call its direct evidence of recession. However when we speak of a full scale war or extreme crisis, things change. In this case, gold has been historically valued, as it does not rely on any company or brand. To me luxury brands and gold are two distinct assets. The value of one is from brand, demand and lifestyle, the value of the other is from security and long term trust.

That's exactly what I'm saying. Luxury brands are pretty much low to mid level recession proof and won't collapse because their customers are entirely different demographic. Their customers are the people who bet on the market when recession happen with capital you won't even think of.
In a total recession though, these luxury brands might collapse because simply put, their customers are affected too.

Many rich people have fear of being poor because they have a child who have no intelligence and father developed businesses but after a time , business is destroyed by a son who have no financial education which is necessary for them to be rich in life and they are buying luxury things because they want to show to the people they are rich people and they have luxury things like car and luxury suits . Rich people always try to be rich by investment but they could have a over spending child who will destroy their wealth by buying useless things. If they will buy cheap thing then they will remain rich but if they will spend money on luxury clothes and cars they will be poor in a short time.

[lizarder]

It's because luxury goods are originally designed for the rich.

By that, I mean the ultra-high-net-worth individuals in society. Some people could fake that they are rich, but they are exposed when the economy slows down. But the true rich people often continue to live their frivolous/luxurious lifestyle unaffected. For instance, can economic slow down make expensive football/basketball players stop buying their luxuries, or would it make leaders in the industries stop looking and smelling luxurious? I guess not! Since they are the main customers of the luxury goods, the business continues to thrive.

Those who are truly rich will make branded items into collections, so it is natural that we often hear that these items are more resistant to recession. This kind of product does not target the middle class market so only a few people may be able to reach it so buying it is more of a collectible item which is often done by the really rich. The opposite is true regarding quality and usually luxury products are not produced in large quantities so the products launched are very few so many rich people compete to buy them.

Some wealthy public figures are actually willing to buy branded watches that are produced in small quantities at quite expensive prices and they see items like this as a form of collection and in the long term the price will continue to rise due to scarcity. Some figures like the ones you mentioned sometimes like to use branded products so that production quantities are limited to only those who can afford it and this is not surprising, especially for those who like branded goods like that because this business is also very promising.

[Cheema02]

Luxury brand is recession proof in a small to moderate recession. When shit hits the fan and disaster happen, nobody would even think about luxury brand.
Something like total war is where the luxury brand gonna lose its value while gold retain its value.

However, I think it is not always the case that luxury brands completely collapse in small or medium recession, because their main customers are not ordinary people, but high net worth class, During Covid we have seen many luxury brand sales recover quickly, because the spending power of rich people does not decrease so easily, so it is a bit difficult to call its direct evidence of recession. However when we speak of a full scale war or extreme crisis, things change. In this case, gold has been historically valued, as it does not rely on any company or brand. To me luxury brands and gold are two distinct assets. The value of one is from brand, demand and lifestyle, the value of the other is from security and long term trust.

Your point about luxury brands is based on reality and its true that brands and especially luxury brands are not always makes profit and some time bad time comes for their but these type of brands are so rooted and don't easily panicked in moderate tough situations. Because there customers are belongs to elite classes and are the most stable persons of that location. For example in COVID duration many companies don't goes for loss like LVMH and even they grow because elite class spending in it. But in sawere situations like war temporarily people focused on survival and not prefer status or wealth and only goal for that time is security. So the only assets which seems to stable in all extreme conditions is gold and its not depends on condition and not represents reputation and status but its the sighn of trust and security for long time. And investing in brands and gold both have importance but it depends on mentality of people.

[DiMarxist]

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

I agree with you because, anyone buying luxury goods and products in this harsh economy no matter the country they find themselves is not affected by the economy. This is a fact that should be established there are people who are living above the poverty line to success people spending money is not a problem to them because they have it. Luxury goods is not easily affected by the economy or volatility because these are not every day goods you can get in the market as usual but, these brands are a proof of wealth and class.

[summonerrk]

Rich people often buy luxury goods without thinking about the fact that they may start selling them tomorrow because of their poor financial situation. I do not accuse rich people of ill-considered actions, men often think ahead, but women do not, they live within a week at best, their horizons do not allow them (most) to predict the financial issue further. Therefore, they immediately start selling things whenever they have any difficulties. Gold, bags, luxury brand clothing. Knowledgeable people buy it for cheap and then sell it on sites where you can sell it at a premium. It's just another market and nothing more.

[AgriTrack]

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.

we understand that the things that are in luxury brands are of good quality, such as clothes perfumes cars shoes etc. It also includes bags. When the economy is in a downturn ordinary people reduce their spending and the rich people buy things anyway because their spending does not decrease. They continue to buy things from brands. Luxury brands are not completely safe but they are also less affected because their purchases are made by rich people. The business of brands is usually stronger than other businesses because the rich people continue to buy them even in times of inflation. In short brands are generally less affected by recessions and are stronger than others.