High life for hire
Logic says the luxury goods sector is due to be squeezed as the fallout from the credit crunch ripples through the global economy. But the expected slowdown has yet to materialise.
For every firm that reveals disappointing sales (Gucci), another delivers impressive growth (Burberry).
But as the slowdown begins to bite, more wealthy individuals may prefer to hire rather than own luxury goods.
A recent survey of wealthy couples in the US by Prince & Associates, a specialist research firm for the wealth services industry, found a sharp increase in the number expecting to rent luxury goods in the next 12 months.
Nearly two thirds of those with a net worth of between $1m (€1.2m) and $10m said they expected to rent products in the next year, while a quarter of those worth more than $10m said they would.
The most popular goods to rent among the less-wealthy were handbags and cars, while fine art was top of the list for their richer counterparts.
Flora Heathcote, co-founder of Ecurie25, a London-based club that rents out top supercars, said the credit crunch has been a double-edged sword. While some people who would previously have bought cars have joined the club instead, it has lost younger, more aspirational members who are finding they can no longer afford the £11,445 (€14,422) minimum annual membership.
Regardless, she expects plenty of demand for the new Ferrari Scuderia 430, which will be one of the first available in the UK when it arrives in late summer. She said: “People may be able to afford one, but they will join the club because they just can’t get hold of one.”
According to the Prince & Associates survey, while affordability was the prime motivation for couples worth less then $10m to rent, for their wealthier peers the main driver was access to greater variety.
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