Are luxury brands recession-proof?

[Owena]

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

Luxury brands are somewhat recession-resistant, but not entirely recession-proof. During economic downturns, wealthier consumers may still maintain their purchasing power, continuing to buy high-end goods, but demand for luxury items often slows as middle-class consumers cut back. Brands that focus on exclusivity, quality, and heritage tend to fare better. However, even the most prestigious luxury labels are not immune to shifts in consumer behavior or economic pressure. Factors like brand loyalty, global markets, and the brand's ability to adapt to changing tastes also play significant roles in their resilience during recessions.

[palle11]

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

At every point, there are people happy and laughing and others are sad and crying. Tables do turn too.

Every government has people that it benefits or people that will keep milking the benefit from it, the government. There are rich people that are spreading out to attract more riches and they keep being rich despite the hardship in the system. They will go for luxury goods too because that is the level they operate in. Even in recession, there are people that become rich during that time. Example is when there was COVID-19, those businesses that has to do with internet flourished and most physical businesses had problem and that affected their finance. In the same situation, those people whose businesses were on chemical were flourishing because they were in high demand for making sanitisers and other chemicals to prevent contact with disease. This is how the economy works, there will always be luxury products despite the economic hardship.

[simonova]

Even if the economy is bad, the purchasing habits of the rich are different from those of the poor and the middle class. That's why they are not affected much. Basic needs and luxury spending are similar. In bad economic conditions, it's usually the middle class that's affected and if savings need to be made, they are the ones who do it. In the simplest form, that's the answer to your question.

Interesting. Recession doesn't affect the wealthy minor group of society, so they have no reason to change their habits. At same time, middle and poor classes have never had access to luxury brands, so it doesn't affect that niche of market too. It shows wealthy class lives a world apart, almost invulnerable to struggles everyone else is vulnerable to.

I have seen very rich with multiple businesses getting to zero in covid. Most of them had to got to normal job for paying loans and all.

[MFahad]

Perhaps people have become hungry for luxury items during the crisis. After all, we're all doing well now, until the AI ​​bubble burst, which will likely lead to another crisis (after all, it's not even banks that are investing in it, as in 2008, but governments). Now everyone continues to buy iPhones and expensive clothes, even though these items are no longer the best quality; just look at the reviews. People want to show off, and for them, this is more important than financial freedom. It's a short-sighted decision, but it's their choice.

At the situation of difficult time, people are more focused on expensive things. People don't see their situations, it feel great by buying such things. they do this that they can show off, even though its their misunderstanding. If we abandon the life of pretense and embrace real life, it will bring huge revolution in our lives. Expensive mobile phones and expensive clothes are not the identity of a person, their morals are true identity. If we prioritize improving ourselves instead of showing off This will prevent us from facing difficulties in living when financial difficulties arise. If you spend alot on luxury items to show off in society, it your incompetence. When man improve his financial situation, he can gain a place in society.

[Fortify]

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

What evidence do you have for this, because I think it's a load of rubbish. Luxury brands will be the worst affected in any recession because everyone is watching their money carefully and luxuries get traded down when the economy looks unpredictable. There is a clear pattern for luxury brand profits falling sharply during a recession and the smallest bit of research would tell you this. While the very richest are mostly immune to downturns, most luxury brands now are aspirational and have a large target market that are reaching sometimes beyond their means to buy these products - that segment of customer disappears when lenders are not handing out easy money via loans or credit any more. Luxury brands suffer the worst in such market conditions.

[justinlamode]

In economics,  there is something called giffen goods or article of ostentation and they defy the law of demand and supply because their demand increases even if their supply increases. They are mostly luxury items reserved for the rich or people in certain financial level. Take for instance, iPhone products, despite their high prices and increasing supply, their demand keeps increasing because it is used primarily as a measure of financial achievement by people.

[coolcoinz]

Everything gets hits by recession and you can see it by car data. For instance Porsche was doing so bad in the recent years that it fired its CEO, although their problems came from attempts at electrification.
Anyway, I feel like every single brand can be hit by a bear market and that includes luxuries, but on the other hand some items like watches are treated like investments, so in times of high inflation people will try to spend fiat and park it in items they consider safe like gold, silver, art, jewelry, and similar things.

[Unknown Op]

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

At every point, there are people happy and laughing and others are sad and crying. Tables do turn too.

Every government has people that it benefits or people that will keep milking the benefit from it, the government. There are rich people that are spreading out to attract more riches and they keep being rich despite the hardship in the system. They will go for luxury goods too because that is the level they operate in. Even in recession, there are people that become rich during that time. Example is when there was COVID-19, those businesses that has to do with internet flourished and most physical businesses had problem and that affected their finance. In the same situation, those people whose businesses were on chemical were flourishing because they were in high demand for making sanitisers and other chemicals to prevent contact with disease. This is how the economy works, there will always be luxury products despite the economic hardship.

Brands are making profits in dollars and they are Investing more money on marketing as Product cost is very low but they want to make a brand and they are giving their name to the different You tubers and they are promoting them . Millions of people are not able to buy brands because they are very poor and rich people are buying these kinds of things and if the products of these brands will be costly then it will not impact on the economy because rich are buying from rich people.Poor people are buying from the small shopkeeper where things prices are very low . People are following that path and that is not wrong thing for that economy of the country

[simonova]

Everything gets hits by recession and you can see it by car data. For instance Porsche was doing so bad in the recent years that it fired its CEO, although their problems came from attempts at electrification.
Anyway, I feel like every single brand can be hit by a bear market and that includes luxuries, but on the other hand some items like watches are treated like investments, so in times of high inflation people will try to spend fiat and park it in items they consider safe like gold, silver, art, jewelry, and similar things.

Luxury car brands are a different thing. The item price is like 100-1000 times of luxury normal items.

[Mate2237]

Luxury goods are items which is just like any other items and goods in the market. Inflation is the rise in the price of goods and the standards of living. So the problem is not in luxury goods but the problem of inflation lies in the individuals. Most of the people patronizing luxury goods are those who are above the poverty line. So they are not people who may not be affected by the economic situation which is the reason for the inflation.



No matter how hard the economy bites hard there are people who will still maintain their life style and buy things that may sound high taste to the poor man this is because these set of people are not affected by the present economic situation of their country and so luxury goods will be always move .

[Z390]

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.

Based on the example you used, toothpaste isn't the rich products, we have local made way of brushing teeth and they are better and more healthy than toothpaste, one of the example is black charcoal and another is a smart leave that works very well than Black charcoal.
In third world country like mine, rich people's products are abandoned for the rich, there is no "because they have no choice", these people have many choices to avoid the rich products.
People in America and the UK falls under the category of those people you are referring to, they have no choice than to use some products that belongs to the rich.

[AgriTrack]

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

What evidence do you have for this, because I think it's a load of rubbish. Luxury brands will be the worst affected in any recession because everyone is watching their money carefully and luxuries get traded down when the economy looks unpredictable. There is a clear pattern for luxury brand profits falling sharply during a recession and the smallest bit of research would tell you this. While the very richest are mostly immune to downturns, most luxury brands now are aspirational and have a large target market that are reaching sometimes beyond their means to buy these products - that segment of customer disappears when lenders are not handing out easy money via loans or credit any more. Luxury brands suffer the worst in such market conditions.

I have different point here, if you ask me this question then my answer is yes because mostly producers primarily  target the elite class for their luxury items. Those who have high income  not highly affected by the inflation. So their spending habit remains stable. And another reason is that Elite class is highly status conscious, so to maintain thier status or for ahow off. They continuous spend on luxury items. Moreover keeping the prices low can make a branded item appear cheap or low quality. So producer prefer to maintain high prices of their products. Luxury brands spend lot on promotion or marketing, use celebrities for convincing the customers. These strategies influence people to believe that owning certain brands reflects or build their strong image in the society.  As their main customers are economically or financially stable.So because of this luxury items earn lot even in high inflation or slow economic growth So my conclusive point is, yes luxury item are recession-proof.

[Oluwa-btc]

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

Luxury goods would always thrive during recession because majority of it's customer based are mostly the rich and wealthy ones and they are not really affected by any economic downturn most necessary because they have so many financial backups from businesses they are into or investment they've made, so the luxury brands will always thrive and do well to fit in with the demands of these sets of people.

[eightdots]

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

Luxury goods would always thrive during recession because majority of it's customer based are mostly the rich and wealthy ones and they are not really affected by any economic downturn most necessary because they have so many financial backups from businesses they are into or investment they've made, so the luxury brands will always thrive and do well to fit in with the demands of these sets of people.

When global economies slow, the number of wealthy individuals is likely to increase. This increases interest in luxury goods, leading to higher sales of luxury brands. A global economic downturn negatively impacts many people financially, but the number of wealthy individuals increases significantly during such periods because markets offer ample opportunities.

Those who purchase luxury goods are typically more likely to maintain their financial standing, so their economies are not significantly impacted during recessions. Of course, some are negatively impacted, but because economic opportunities are greater during such periods, more people are willing to seize these opportunities.

[Localhostspeed]

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

Luxury goods would always thrive during recession because majority of it's customer based are mostly the rich and wealthy ones and they are not really affected by any economic downturn most necessary because they have so many financial backups from businesses they are into or investment they've made, so the luxury brands will always thrive and do well to fit in with the demands of these sets of people.

When there is recession, it's not only the poor that are affected, even the rich get affected. The thing is that rich people don't affected to the point they have to cry like the poor, they know how to adjust to current condition of the economy and they have to forgone somethings that are not that important. Brands name is going to be their least worry that time because it's a season of who is going to survive and how they are going to eat comfortably.

Just imagine that during Christmas period, there cows from a particular place are very expensive because of there brands and people feel it's a necessity that they must buy it when there are cheaper ones during recession. Maybe if there is no recession, people will have much to sacrifice to buy it but in this case, wise ones will go for alternative. There are some stubborn people that will still want to patronize brands but are just few in numbers.

[simonova]

When global economies slow, the number of wealthy individuals is likely to increase.

What is the reason behind this ?

[Stavri]

I'm talking about my own country... here luxury goods are mostly bought by the middle and lower middle class. It's really more of a showoff thing So I don't think this is a sign of a recession. It actually shows that the middle class can still spend money.

[tygeade]

Some, not all. Look back on 2008, while 2020 and the whole pandemic thing also had a drop, everything dropped because we couldn't buy stuff, or go out, so it is not just recession. But, look at from 2008 to 2020 and you will see high inflation, issues, crisis, and recovery period as well and you can see if it was good or not.

I can tell you that not every single luxury brand is recession proof, some do go down, some make mistakes, they miscalculate the inventory of how much they will need, and stay with many unsold items and they end up wrong. So it's clear that surely places like channel or prada will not end up with anything good anytime soon but that doesn't mean that we are going to see all of them stay.

[goro_chief]

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

. I’ve always wondered if they actually “thrive” or just decline less than normal brands. Do you have any data or examples? Could also be fake scarcity and strong marketing. Would be interesting to compare pre/post recession numbers

[alastantiger]

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