MONACO: The economic downturn will change certain aspects of the luxury sector, but could also benefit those brands willing to focus on their core values, says Bernard Arnault, chairman of Moët Hennessy Louis Vuitton.
Speaking at the Financial Times' Business of Luxury summit, Arnault argued "it would be wrong to say nothing will be like it used to be" when the financial crisis does come to an end, although a number of high-end brands may go out of business before then.
However, the head of the world's biggest luxury goods group by sales added that consumers would still be interested in buying premium goods, as "we don't buy our dreams at the supermarket."
Similarly, "the multiplication of products at low prices will have the effect of actually strengthening the demand for products of higher quality and higher prices."
Arnault has also previously spoken out against the "natural tendency ... to cut costs, drop prices, and stop expanding" in the downturn, which "is a mistake, especially when it comes to luxury."
Rather, if "you don't put your products on sale, consumers feel they are buying something that retains its value."
Diego Della Valle, chairman of Tods Group, the Italian luxury firm producing leather goods and shoes, said he expected "consumers to return to shops by Christmas. I can already feel the change in their thinking."
Josh Schulman, ceo, of Jimmy Choo, also revealed that "our most expensive shoe, which costs over $1,300 (€931m; £795), is one of our most popular. If an item creates desire, it still sells."
By contrast, Nick Candy, joint ceo of Candy & Candy, the "exclusive interior designers and property development managers", was less positive.
He forecast that "when the sun goes away and the summer ends, we're all going to wake up and see things are as barren as ever," as there is still "no liquidity" and "banks are not lending."
Data sourced from Financial Times; additional content by WARC staff