Luxury designers are optimistic about recovery

Isaac Mostovicz writes that the optimism expressed by top luxe designers bodes well for the industry's speedy recovery...


Here’s an interesting interview in the Wall Street Journal with Carolina Herrera that I caught via Luxist. Like most in the luxe business, she, too, felt the pinch from a faltering global economy. But now she sees things changing.

I saw the impact in the beginning. I saw it with the women who used to come to the boutique to buy. They bought less. All the information in the newspapers makes them nervous. When you see a lot of people losing their jobs and they have children to send to school and other commitments, then you think [more before] buying.


Lately, it has been better. At one point, I used to see the people who used to buy a lot, and they were a little concerned about buying. Now they are shopping again.

It’s good to see major players in the luxury scene express this level of optimism publicly, not just retailers. She explained a bit about what her strategy was during the worst of the recession.

During the downturn, she has had to walk a fine line, trying to cater to frugal consumers without damaging quality or image. … Ms Herrera responded by cutting prices about 10% and making tweaks to trim costs. She is also expanding her lower-priced CH Carolina Herrera line, adding 17 standalone shops this year to the current 48.

Her strategy speaks to an interest in not alienating a core Theta personality customer. If Ms Herrera had reduced her prices to 15% or 20%, her brand may begin to be seen as masstige. This would alienate both Theta personalities and any potential Lambda personality as a client.

Because she resisted that, her brand’s position is in good position to grow more as the recession fades.

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