The Commodity of Luxury

This was originally published in my regular column for MensFlair.com. I am posting it here in its entirety with some additional editorial content. Enjoy.

The shiny barrier of luxury that once clearly defined social and cultural classes has fallen by the wayside. Now, even the most average of incomes can support some level of Tiffany, Cartier, Hermes, Asprey, Gucci or Louis Vuitton.

Only one generation ago any of these names would conjure up images of drivers waiting outside intimidatingly luxurious store fronts. Such places were exclusive. They were out of bounds for the ordinary consumer. You could walk in of course, but you didn’t really belong there.

How the world has changed. Though many of these companies took generations to become bastions of excellence and good breeding, it took a relatively short period of time to make their products and accessories available to the masses. When once only New York’s privileged scions browsed for the perfect diamond engagement ring, today every other teenage girl has a “Return to Tiffany” choker wrapped around her neck.

Burberry, that giant of English brands had to hire a new CEO whose first act was to abolish the company’s signature tartan from hundreds of products. In Burberry’s case it was too much of a good thing – that plaid was everywhere and all at once. What had been a cipher for privilege and exclusivity was now the domain of high schoolers.

In their drive to reach the ultimate brass ring of market share, sobriety and tradition gave way to down market sales. Catch them young, the theory goes, let them afford a scarf or a bracelet with the coveted logo on it, and when they grow up and make more money they’ll come back to spend it on a sapphire necklace or an iconic trench coat. And it worked.

At least the first part worked. The problem of course, is that when you have a hot economy and lots of people with spare cash - or more often credit - and a desire for celebrity, the more bling you can sport the better. What began as an effort to ensnare more customers and grow the bottom line quickly twisted into outright brand saturation.

The turning point for venerable Tiffany & Co., apparently came when hordes of cash flushed teens clogging up the “rear salon” – where the sterling silver jewelry and accessories are sold - started to turn off the customers who were coming in to buy the big stuff in the “front salon.” This is where the real action happens; where you might see some fellow drop $50,000 on a charming tennis bracelet for the wife.

These are the customers who really pay the bills and when they start feeling sidelined because Tiffany appears to be catering to a 13 year-old with mom’s credit card, well, watch out. The first half of the down market plan was a success. The problem was since so many people could now afford a piece of the dream the demand became relentless. So were the sales; they just weren't the type of sales that supported Tiffany's blue blood image.

After a lot of internal debate, Tiffany's response was to increase the prices of those very same sterling silver product lines which have been the driving force behind its strong revenues. It's a first really; a luxury company deliberately attempting to drive down sales in it's most broadly profitable product category as a means of preserving the company's overall exclusive cache.

But even as this “affordable luxury” trend spread across the luxury market, from entry level Jaguars to entry level Zegna suits, the inevitable started to happen. The truly rich, the top level consumers started to feel not so special.

Because if everyone can be special, than, really, no one is special. And so as the bottom feeders snatched up their logoed iPod cases, key chains, and handbags-of-the-moment, the top feeders started looking for material fulfillment elsewhere. Coincidentally, around this point the financial markets started to stumble a bit and that really didn’t help the situation.

As most economists will tell you, when consumers believe that their financial situation is threatened the first pull back is often in discretionary spending. While this has different meanings to different people, at some point buying that blue velvet Gucci suit just doesn’t seem like a good investment.

This is the conundrum facing a number of large luxury houses as we kick off the New Year: the target market they have spent years trying to attract - the aspirational buyer - is no long in a spending mood. And the elite customers, who could set the balance sheet in order with just a few shopping trips, no longer desire your brand because it has been watered down.

The result of this perfect retail storm is equally as fascinating. New designers and real craftsmen are starting to make their mark. People both average and wealthy want something new. Those with the means to have pretty much anything they want, want something no one else has. Average consumers who have money but are now more selective want something unique.

Visionaries like Tom Ford and David Chu saw this coming and acted early. After founding and then selling Nautica for a tidy $100 million profit, Chu renovated an entire Manhattan townhouse and turned it into a bespoke atelier from which he offers a full range of custom clothing. After leaving Gucci, Ford decided that New York needed a super high-end men’s clothier that felt like a very exclusive private club, also housed in its own townhouse.

Wealthier shoppers are moving way from brand name luxury because it's simply too common; luxury itself has become a commodity. So, when we get down to it, this has been a rather roundabout way of saying I believe we are starting to see a marked shift in the definition of luxury. People will soon realize that the only way to in fact be unique is to disregard labels and logos altogether.

And to me that time cannot come soon enough. Real style is a personal thing and luxury items are the most extreme expression of personal style. So in a sense we are back at the beginning when true luxury did not have a label slapped on it, when a suit was handmade and the man wearing it was an ambassador of style, not the tag.

Personally, I think that those things most meaningful to you should be uncommon and rare; they should come with some sort of price beyond that of just money. Be it an irreplaceable family heirloom or an expensive and unusual watch that was a once-in-a-lifetime purchase. Even if it’s a favorite sweater bought at a discount store; if you cannot bear to lose it, well, then it’s just as valuable as one from some expensive boutique in Paris.

When you get down to it, those who have a real understanding of style don’t need labels. They don’t care if you recognize their bag or their tie or their coat. It’s not about impressing you; it’s about standards they set for themselves. That’s luxury.