Just when you thought the recession was over, there's sad news from Park Avenue, Rodeo Drive, and all the other luxury shopping streets of the country: rich people stuff is getting too expensive for rich people. According to The Wall Street Journal, sales of luxury goods are growing at 7 percent a year, which is down from the post-recession rate of 11 percent a year. Part of that is due to China's crackdown on giving gifts to officials (aka bribes), and the strength of the euro against the dollar, but part of it is that the cost of Chanel handbags and Gucci sneakers is rising faster than the 1 percent's willingness and ability to pay.
"Prices have gotten really crazy," said one shopper, who had to cut back from four or five pairs of $495 Jimmy Choos (per year, not per lifetime) to three pairs of $650 heels (still per year). According to the Journal, luxury good stores raise prices to help drive sales and to stay separate from "entry level" luxury dealers like Michael Kors.
And this isn't just a problem for the real husbands and housewives of America — China is also seeing a decrease in how much rich people are willing to buy. China's millionaires and billionaires spent 15 percent less in 2013 than 2012, and sales growth declined by 5 percent, Time explains. Part of that may, again, be the whole corruption thing, but at some point there has to be a limit to how much people can spend.
This article is from the archive of our partner The Wire.
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