Until now the U.S. market has mainly been a local consumer market. But that could change, adding to strong domestic demand. The government is relaxing visa requirements for Chinese visitors, hoping to attract the large number of tourists who head to Europe to snap up luxury goods.
"The stronger economy and loosening of visa restrictions for the Chinese mean that business this year will benefit from both affluent locals and tourism," said Milton Pedraza, CEO of the Luxury Institute, a U.S. consulting firm.
To welcome the expected boost in tourists, luxury houses are making sure their flagship stores are in tiptop shape. Burberry Group (BBRYF) recently renovated its main Chicago boutique. Hermès plans to refurbish and expand its Rodeo Drive store in Beverly Hills, Calif. Next year, the company is scheduled to move its current store in Miami -- a gateway for Latin American visitors -- to a larger location in the city's up-and-coming Design District.
"We didn't open any new stores or do any renovations in 2012 in the U.S., so (growth) was really done through the existing store network," said Axel Dumas, Hermès' chief operating officer. Dumas is set to become joint-CEO alongside Thomas later this year.
At Hermès, sales in the Americas last year rose 14% to $753 million, while sales in Asia excluding Japan increased 25% to $1.4 billion. The company doesn't break out U.S. figures. Total sales were $4.6 billion for the year.
Though executives are enthusiastic about the U.S. growth, they are also realistic about its limits. As recently as 2007, luxury brands were opening dozens of stores in smaller cities from Seattle to Nashville, Tenn. But analysts say luxury-goods sales haven't lived up to expectations in some of those places.
"Where some have gone too far is in thinking Middle America is going to be buying luxury," says HSBC's Belge.
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Craving for luxury? Maybe. The problem is that a very small minority of Americans have the lions share of expendable money under this debt monetary system.
These wealthy people however, have most everything they need in the luxury department, and need not spend much more. They end up hoarding their wealth instead of investing in those that are not gainfully employed. Ironically, investing in those less fortunate, creates more jobs, which in turn creates more wealth that gravitates right back to the wealthy investors. Instead, those potential investors complain about welfare, unemployment, etc., etc.. By not investing, they are endangering their own fortunes by feeding into the nation's potential for economic collapse.
This system monetizes debt. Without continued borrowing, the system begins an immediate collapse. All money is created through the extension of credit from private commercial banks, or other debt intstruments, such as treasury bill, notes or bonds, which congress puts on the public's credit card.
The interest on all of this borrowing, gravitates to the bankers and those wealthy enough to be invested in those financial debt instruments.
Those that crave that luxury, are unfortunately mortgaged to the hilt and the bankers have a lien on most everything of value that they own. The more their cravings go unfulfilled, the less profit taking for the wealthy few. It will not be too many years before just servicing the interest on total indebtedness will surpass total gross consumer income. Then all is lost!!!!!
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[BRIEFING.COM] Stocks entered the weekend on a mixed note as the S&P 500 shed 0.1% while the Dow ended with a gain of 0.1%.
The major averages began the day on a lower note as nine of ten sectors saw losses of more than 0.5%.
The consumer staples sector was the lone exception as the group spent the entire day in positive territory thanks to the relative strength of Dow component Procter & Gamble (PG 81.89, +3.19). The second-largest staple stock advanced ... More
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