Luxe is losing its edge

This is from an article in IHT:

Since the 1990s, sales of luxury goods have exploded, along with the growth of a well-heeled new global elite, turning once little-known European brands into giants and transforming chic addresses like Fifth Avenue, Bond Street and the Champs-Élysées into veritable open-air malls for the upper middle class.

Now, reality has caught up with Bulgari and the rest of the industry. Sales at the 125-year-old jeweler rose an anemic 2 percent in the third quarter. Analysts are pessimistic about a recovery in its current fourth quarter, a period that is responsible for an outsize portion of the company's annual results. And demand for luxury goods is expected to drop by 3 to 7 percent next year, according to a recent study by Bain & Company, the first time the sector has recorded an annual sales decrease since Bain began tracking it in the early 1990s.

"Past slowdowns were more regional in nature and people could perceive the end game," Angela Ahrendts, Burberry's chief executive, said in an interview. "This is global. We were with an investor last week who has had to rerun his worst-case scenario five times in the last five months, and we're still not there yet."