October, 2013 – This article from Barron’s discusses the poor appeal of certain luxury brands to affluent consumers based on the Fall 2013 survey by AARC. (http://online.barrons.com/article_email/SB50001424053111904897104579149483249095554-lMyQjA1MTAzMDIwODEyNDgyWj.html?mod=barrons_article_email )
By Robin Goldwyn Blumenthal
It seems that nothing says parvenu quite like some of the more vaunted luxury brands, so when you’re buying for the wealthy this holiday season, you might want to skip the Louis Vuitton ostrich loafers or Hermès scarf and opt for something a little more understated.
So says a study from the American Affluence Research Center in Atlanta. The outfit examined the perceptions of a representative sample of the wealthiest 10% of Americans about 17 randomly chosen luxury brands and found that at least a quarter of the respondents believed that most of them are overrated.
In the case of Louis Vuitton, a brand owned by Paris-based LVMH that is known for imprinting products with its initials, a full 44% of those surveyed felt that “people need to be associated with such a brand to enhance their own stature or status,” says Ron Kurtz, president of the research firm, which has conducted its surveys of the mood and future spending plans of the wealthiest U.S. households, based on net worth, semiannually for the past 12 years.
Other brands perceived as appealing to status seekers: Hermès, Gucci, and Prada, which nearly 40% of respondents called overrated. Faring better were Clinique, Lancôme, Nordstrom, Lexus, and the Four Seasons and Ritz-Carlton hotels, which were tagged negatively by only a fifth or less.
The good news, if there is any for the so-called overrated brands, according to Kurtz: Those identifying them as such tend not to have owned them—a market waiting to be tapped if ever there was one.