What A Week!

It has been another roller-coaster week thanks to the Greek debt crisis and its impact on the G20 Summit currently unfolding in Cannes. Try as I might to tune out the constant flow of bad news, I can't seem to turn off France Info and the FT's Twitter feed. It feels like I'm watching a slow-motion train wreck with no way of stopping it. This sorry state of affairs makes the robust sales and upbeat forecasts being reported by the likes of Hermes, PPR and LVMH all the more surreal to me.

It's not that I'm not happy (and relieved) to hear some much needed good news. I am however having trouble reconciling what the continued growth of the luxury sector in such troubled times signals for society at large. Record sales of luxury goods against a background of austerity measures, record high unemployment, inflation and growing rates of homelessness strikes a dissonant note that I find difficult to ignore.

I keep having to remind myself that robust sales of luxury goods and services translates into both high and low skilled employment across various sectors. I keep repeating to myself that if everyone stops shopping during troubled times, it will only make matters worst. This is all the more true given that the economies of the United States and Europe are increasingly tied to the spending habits of the top tier of households. Still, it's difficult to enjoy one's good fortunes (no matter how hard you may have worked to get there) when you're surrounded by so much misery.

Enjoy your weekend dear readers and don't forget to count your blessings, large and small.

Sincerely,

The Luxe Chronicles

Comments

[EFM NY]

Surreal is the right word. Our growth model is flawed, it cannot continue to be based purely on more consumption.

[Helene]

Dear John Agee Paris:

You're absolutely right. I get the uncomfortable feeling that we're headed towards a new era of Robber Barons. It's difficult to witness.

Helene

[John Agee Paris]

This news shouldn't shock anyone. The rich have all the cash. Of course luxury is doing well. But this "good" news is, in fact, very bad news. The rich can only have so many dresses, shoes, and bijoux. And when they have "enough" to last them for a while, we'll see how many luxury houses will survive. More than a few won't make it, I suspect. That's why we MUST have a large, prosperous, and confident middle class if democracy and a healthy economy are to last.