It is often said that the luxury industry is immune from recession; the wealthy will keep shopping no matter what the macroeconomic environment.
And there is some truth to that – not complete, but a strong element. Recent newspaper reports are rife with big upticks for the major brands, despite continuing global economic woe.
As witness I present to you a couple of recent developments in downtown Munich.
It’s well understood locally that Munich itself is almost recession-proof; economic downturns seem to skirt past this city, which is fundamentally very wealthy and enjoys a tax-base supported by successful local family-run businesses – like BMW.
Firing the starting gun for expansion is Louis Vuitton, moving from a smaller store on Maximilianstrasse to a massive new “maison” nearby, the Residenzpost, in the heart of historic Munich.
This location used to be just slightly more utilitarian – it was a Deutsche Post office until a couple of years ago, before the entire block underwent a very expensive renovation/gentrification.
This store is now a world-class LVMH expansion, with three enormous floors featuring pretty much every LV product known to mankind. There is even an LV promo video for the new store. And even at 10:05 AM on a Monday morning there were quite a few people shopping.
This move changes the dynamic of the nearby shopping district immensely. Perhaps not by coincidence, Prada, situated literally just across the street, has decided the time to expand is exactly now, and I would not be surprised to see a few other expansions, refurbishments or relocations in the near future. Belstaff (which is, in my opinion, one of the most unlikely luxury brands ever; when I was young Belstaff was what bikers bought when they couldn’t afford leathers) already opened a brand new store nearby.
But beyond the local environment, this is a telltale of the continuing global success of luxury brands, even the smaller ones in the PPR Group (now called Kering) like Stella McCartney and newly acquired Christopher Kane, about whom I will write a dedicated story later, and Giorgio Armani is no exception.
Globally the tide is lifting all luxury brands. When will it end?