Luxury good
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A luxury good is a good at the highest end of the market in terms of quality and price. Classic luxury goods include haute couture items such as clothing, accessories and luggage. However many markets have a luxury segment including, for instance, cars, wine and even chocolate.
Luxury goods markets are characterized by very high sensitivity to economic upturns and downturns, high profit margins and very tightly controlled brands. Following a nearly crippling attempt to widely licence their brand in the early 1990s for example, the Gucci brand is now largely sold in directly owned stores.
LVMH (Louis Vuitton Moet Hennessey) is the largest luxury good producer in the world with over fifty brands. It made a profit of €2bn on sales of €12bn in 2003. Other market leaders in include the Gucci Group and Richemont.
In popular culture and the public imagination certain goods have become bywords for luxury. These include Beluga caviar, Rolls Royce cars, luxury yachts and so on. Such items are often regarded as status symbols as they tend to signify that the purchaser has significant wealth.
Locations
Like other sectors of the retail market, luxury goods retailers like to cluster their stores closely together in order to create a shopping "destination". In the case of luxury goods, these areas are generally in the old and extremely wealthy areas of major world cities. Some of these well-known areas are listed below
- PC Hooftstraat, Amsterdam
- Via Codotti, Rome
- Sloane Street and Bond Street, London
- Rodeo Drive, Beverly Hills, California (Los Angeles area)
- Madison Avenue and Fifth Avenue, New York
- Place Vendome and Triangle d'Or, Paris
References
- March 2004 on the state of the luxury goods market from The Economist (http://www.economist.com/displaystory.cfm?story_id=1045638)de:Superiores Gut