Global economic crisis pushes men to therapy, women to handbags
The desire to sport a different handbag for every occasion is shielding the largest makers of luxury leather goods from the economic crisis as women prove to be more consistent spenders than men.
Louis Vuitton and Hermes bags are still amongst the most sought-after luxury products compared with weak demand for watches, a traditionally male-dominated sector.
Gender marketing expert Diana Jaffe said the uncertainty about jobs caused by the economic slump posed a threat to male identity, prompting men to cut back on spending. Meanwhile, women are taking steps to cheer themselves up with a treat.
“Women are also worried about their jobs, but not to the extent that they feel their mere existence is being threatened and so they are in the mood to buy despite the crisis,” Jaffe said.
Some men have stopped themselves from splurging on flashy goods that could be deemed as tasteless during times of austerity, while others don’t have the capacity to think about spending on luxury items, Jaffe said.
“Many male managers are suffering from a huge loss of status, many feel under an enormous amount of pressure or are suffering from burnout. They just don’t have the resources to think about buying luxury goods and prefer to go to a life coach,” she said.
Banks, insurers and asset managers have slashed nearly 400,000 jobs worldwide since the credit crisis started to intensify in August 2007, hitting retailers who cater to the luxury-loving professional classes.
Swiss watch exports slumped 26 percent in the first half of the year and the industry is grappling with the sharpest drop in demand in some 20 years, while French luxury goods group Hermes posted a 28 percent rise in first-half sales in its leather goods and saddlery unit.
Women are also more used to dealing with change at various points throughout their careers, making it easier for them to cope with this financial crisis, said Eva Kreienkamp, director of marketing agency FrischCo.
“Men are more affected psychologically by the crisis than women. A bag can be bought on impulse, whereas a jewelry or watch purchase is not,” said Armando Branchini, secretary general of Italian luxury goods association Altagamma.
But handbag envy is not the only aspect boosting groups such as LVMH and Hermes.
These players are benefiting from their own extensive retail networks, which make it easier for them to control how much stock is hitting the shelves.
Watchmakers, on the other hand, are more dependent on third-party retailers, which are currently looking to run down stock levels and have put a brake on new orders.
“The difference in the end demand between watches and leather goods is possibly not as big as some figures suggest, but there is still a substantial difference,” said ZKB analyst Patrik Schwendimann.
Handbags and other leather items are also more accessible than top-end watches as they do not cost as much, said Kepler Capital Markets analyst Jon Cox.
“When it comes to luxury watches, these can be big ticket items — at least $10,000 and for more prestige models $50,000 plus. I think the soft luxury category is holding up because it is still more of an affordable treat,” Cox said.
Shoppers of both sexes who are still buying favor big brands, which are seen as a better investment than less well-known names.
Within the watch industry, analysts at Credit Suisse said Swatch Group’s Omega and Richemont’s IWC and Cartier were mentioned by retailers as brands that had held up better in recent months.
Stephan Schuck, manager of the Zett Meyer watch and jewelry shop on Zurich’s exclusive shopping precinct Bahnhofstrasse, said his female customers just do not appear to be as affected by the crisis as men.
“Many of the women buying in our store are independent or employed and earning their own wage which they manage themselves. These women are paying less attention to the crisis when shopping than men,” he said.