CONSUMERS

Is the ‘Rich Recovery’ All it’s Cracked Up to be?

by

Lucy Archibald

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July 21, 2010

This is the featured image caption

Credit: This is the featured image credit

Opinions are divided over whether we’re really any closer to a return of the good times

Over the last decade, collaborations between luxury brands and contemporary artists have gone beyond mere artistic partnerships towards a new kind of luxury branding.

PARIS – Art and fashion have always developed side by side, for fashion, like art, often gives visual expression to the cultural zeitgeist. During the 1920s, Salvador Dalí created dresses for Coco Chanel and Elsa Schiapparelli. In the 1930s, Ferragamo’s shoes commissioned designs for advertisements from Futurist painter Lucio Venna, while Gianni Versace commissioned works from artists such as Alighiero Boetti and Roy Lichtenstein for the launch of his collections. Yves Saint Laurent’s vast art collection, recently auctioned at Christie’s in Paris, testified to his great love of art and revealed the influence of a variety of artists on his own designs.

In the 1980s, relationships between luxury brands and artists were advanced when Alain Dominique Perrin created the Fondation Cartier. In the Fondation Cartier pour l’Art Contemporain, a book marking the foundation’s 20th anniversary, Perrin says he makes “a connection between all the different sorts of arts, and luxury goods are a kind of art. Luxury goods are handicrafts of art, applied art.”

The Fondation Cartier pour l’Art Contemparain building in Paris

Opinions are divided over whether we’re really any closer to a return of the good times

Opinions are divided over whether we’re really any closer to a return of the good times

Although there are some recent indicators which bode well for the luxury industry, like the Walpole-Ledbury research and evidence suggesting that the super rich are richer than ever other voices, including Robert Frank of the Wall Street Journal, are warning that the ‘rich recovery’ is stalling. Frank refuses to be blinkered to the other side of the story.

An expert on the American wealthy in particular, and author of “Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich”, the senior WSJ writer has been pedalling his cautionary tale since June, when he wrote about the ‘Paralyzed Plutocracy’ and examined five broadly psychological reasons for what he saw as a ‘financial lock down’ amongst the rich.

The stumbling blocks Frank highlighted back in June haven’t really been resolved and in fact there are some indications that confirm his dim outlook. A new survey from Phoenix Marketing International shows that whereas in April 30% of affluent investors were pessimistic about the US economy, that number has now risen to 52%. And the result is that the wealthy feel less inclined to invest their money – the number of millionaire investors planning net decrease in their portfolios has risen to its highest point since June 2009. The worry is that if this mood becomes pervasive, young businesses will struggle to find the finance they need and at a macro-economic level everyone will suffer at both a corporate and an individual level. As Frank puts it, “Rather the leading the recovery, the wealthy seem to be simply following the stock market. When it is up, they are up. When it isn’t, they freeze. That could make for a slow and volatile recovery…”

Admittedly, Frank’s analysis is based mostly on the American economy, yet overall the mixed messages currently circulating throughout the media suggest that the many signs of recovery should still be considered tenuous at best.