Luxury brands are finally starting to feel the crunch of the current economic crisis, and though the first tangible effects seem to be dramatic cuts in advertising, parties might soon follow, The New York Times reported today.
According to MasterCard SpendingPulse, consumer spending on luxury items dropped 20.1 percent in October alone, making it the first month in 2008 that the industry started suffering like most others. Cost-cutting measures were quickly put into effect. Advertising pages for luxury brands in December magazines are down 22 percent from last year, and the recent cancellation of Marc Jacobs' lavish annual holiday party points to a trend that event marketing may soon head south too.
As of now, however, client dinners and launch parties seem to be above the fray. Many luxury outfits continue to wine and dine as they did in 2007. Swiss watch brand Vacheron Constantin threw a launch event just last month for a new line of timepieces that included a $600,000 watch. The Times described the event as something resembling "pre-crisis times," and, in an interview with Vacheron Constantin North America president Julien Tornare, learned similar parties won't be thrown by the wayside just yet. “As of today I think it would be wrong to stop everything because of the crisis,” Tornare said. “Of course we will adjust if we have to in the future, but right now we don’t want to react.”
