Chanel and LVHM Scale Back, Succumb to the Recession
Filed under: Accessories, Style in the News
For a few months, it looked like the luxury brands would somehow escape the economic fallout plaguing the lower classes. Chanel was pumping out its usual flow of outrageously-priced items like the $18K fly fishing rod, and LVMH was busy buying a yacht building company like everything was just peachy keen. Now, after months of worldwide financial Recently, Chanel announced that it would have to lay off 200 members of its Paris staff only weeks after the iconic luxury brand canceled its high polish art show that was scheduled to land in London. Apparently, once the American economy shuts down, even the super-charged newly rich in China and Russia -- the biggest growth market for excessive luxury goods -- have to cut back spending.
By the same token, LVMH has canceled plans to open a mega-mart in the Ginza district in Tokyo. The luxury conglomerate has lost 44% of its stock value since the beginning of 2008. No word on how the downturn is affecting the yacht market, but it couldn't be good. Apparently, luxury goods are just coming off a ridiculuos growth period, gaining 10% or more every year since 2003.
