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Jewelers Court the Super-Rich – The New York Times

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PARIS — After a year of exceptional growth at Chanel, the company’s global CFO Philippe Blondiaux said in a recent interview with the Business of Fashion news site that Chanel would open an unspecified number of exclusive VIP stores in Asia. next year to complement its existing global network of 250 boutiques.

Some have questioned, in a year of price hikes and accessory purchase quotas, how the brand would carry out this plan, how much one would have to spend to qualify as a VIP, and even who would be rich enough to shop at Chanel.

“What does that mean in terms of quality, availability, customer service if they have boutiques only available to super special, elite VIP customers?” London-based influencer Romina Rose May asked in a recent YouTube post.

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Still, the news is a sure sign of the luxury industry’s rapid recovery from pandemic lockdowns which, despite lingering supply chain challenges and economic woes compounded by war in Ukraine, has led some brands to make a strategic shift towards ultra-high consumers.

Analysts at global consultancy Bain & Company said the luxury industry had come back with a bang in the first quarter of this year, with sales in the luxury personal goods market forecast to reach at least €305bn, around $322 billion, by the end of 2022, compared to €283 billion in 2021 and €281 billion in 2019.

Luxury goods sales are driven by heavy consumers, with wealth concentrated among more than 2,660 billionaires around the world, collectively worth $12.7 trillion, according to Forbes. The United States is home to the most billionaires, with China coming in second.

At Chanel, revenue in 2021 rose 50% year-on-year to $15 billion, an increase of 23% from 2019 levels. Its watches and jewelry division posted double-digit growth in 2021, which resulted be the 100th anniversary of Chanel’s No. 5 perfume. As a tribute, the company designed a high jewelry collection with a necklace set with a D-flawless diamond, cut from a single 55.55-carat stone in the shape and proportions of a perfume bottle stopper.

“We are very happy and satisfied with our growth, business is extremely good,” Frédéric Grangié, president of watches and fine jewelry at Chanel, wrote in an email. Fine jewelry, he said, “is extremely dynamic, fine jewelry is booming, and watchmaking and haute horlogerie are also experiencing strong growth. I am confident in the post-pandemic recovery.”

Just this spring, Chanel reopened its flagship watch and jewelery store on Place Vendôme in Paris, transformed into a contemporary showcase with the feel of an elegant, art-filled home. Customers will find Chanel’s full range of jewelery and watches inside, but only a lucky few will be invited down to what Grangié said was a “secret space dedicated to heritage” where rare archives and singular objects linked to history are kept. by Chanel.

“This is a unique tool to offer to some of our specific clients,” Mr. Grangié wrote.

He declined to comment on dedicated VIP stores in Asia or additional plans for treating major customers.

Meanwhile, analysts project that Chinese consumers will be the dominant force in global luxury by 2025 despite restrictions imposed by their government’s pandemic policy. “China is on track to overtake America and Europe to become the world’s largest luxury market,” Bain analysts said.

Ketty Pucci-Sisti Maisonrouge, an adjunct professor of luxury strategy at Columbia Business School in New York, said that “since the pandemic, the Chinese government has encouraged its citizens to stay home and not travel abroad.”

“The number of passports issued or renewed in China has been reduced by 90 percent, as part of a political decision to encourage local consumption,” Maisonrouge said in a telephone interview. “It makes sense for luxury brands to be in Asia.”

Chanel isn’t the only company looking to attract buyers with the deepest pockets.

For the presentation of its new high jewelery collection, Dior received its VIP clients last month in Sicily, at a hotel owned by its parent company, LVMH Moët Hennessy Louis Vuitton. The jewels were presented for a week, paired with dresses created for the event by Dior’s haute couture division.

LVMH’s watch and jewelery division, which includes Bulgari, had revenue of €8.96 billion in 2021, 167% more than in 2020 and 7% more than in 2019 (partly explained by LVMH completing the acquisition of Tiffany & Company in 2021).

Boucheron offers what it calls VIC (“Very Important Clients”) with a stay in the luxurious penthouse of its boutique overlooking Place Vendôme, with full-time concierge service provided by the Ritz hotel. Boucheron’s penthouse stays are limited to five nights per year since its reopening after the height of the pandemic, “to keep the experience super exclusive,” said Hélène Poulit-Duquesne, chief executive of Boucheron. Clients are also offered the opportunity to view jewelery collections with Boucheron’s creative director, Claire Choisne.

“The apartment is a ‘money can’t buy’ experience,” Ms. Poulit-Duquesne said. “It’s not about money, since the stay is priceless, but about awakening emotions, and experiencing something that will live forever in your memory.”

Cartier woos its ultra-rich clients with special events often linked to its cultural programs.

It will be a patron once again of the Venice International Film Festival in September and plans to invite VIP clients to walk the red carpet, attend screenings with the stars; and catch performances at the Teatro Verde, an open-air amphitheater set in gardens on the island of San Giorgio Maggiore. (The recent restoration of the theater was financed in part by Cartier.)

In November, VIP clients at the opening of the Cartier Women’s Pavilion at Expo 2020 in Dubai were treated to a program of women-focused talks and performances, including a recital by Georgian-born pianist Khatia Buniatishvili on a queue installed under the stars in the dunes of the Dubai Desert Conservation Reserve.

“High jewelry customers don’t fit into one category,” Cyrille Vigneron, Cartier’s chairman and chief executive officer, said in an interview in Paris. “We create events that we know our customers will like but don’t always expect.”

Sales of the Richemont group, owner of Cartier, exceeded 19,000 million euros in 2021, an increase of 46% compared to the previous year. While the group does not disclose revenue by individual brand, its three jewelery houses – Cartier, Van Cleef & Arpels and Buccellati – generated combined sales of €11bn, much of which came from Cartier. In a May press release, Richemont chairman Johann Rupert praised the jewelry houses’ “customer-focused initiatives” that resulted in “direct-to-customer sales” and an “improved perception of customer profiles.” customers”.

Companies say knowing more about their high-spending customers can be crucial.

“We have a lot of new data sources like media partners, digital platforms, social media and our own stores to get insights about our customers,” Vigneron said. “We know what they want and we can channel brand messages in a different way.”

“This is a ‘supply-driven’ market,” he said. “We have a distinctive style and we do beautiful things that people don’t expect. Sometimes, we don’t know how the market will react. But we try to add value to customers.”

While the luxury business may be booming, managing the highest value customer’s in-store shopping experience remains a challenge.

“Even when money is not an issue, how do you deliver an exceptional in-store experience or the type of product VICs want in a fairly reasonable amount of time?” Mrs. Maisonrouge said.

“Training and retaining sales associates is another challenge,” he said. “With the ‘Great Resignation,’ no one wants to work in a store.”

Much of brand perception is tied to the in-store shopping experience.

“Customers walk into our boutiques with different expectations,” Antoine Pin, Bulgari’s head of watches, said in an interview in Paris. “It’s hard to separate high jewelry from handbags when the store isn’t big enough.”

“Still, the luxury experience has to be inclusive and wonderful,” Pin said.

“We encourage people to come in and try things on, even if they can’t afford some of the pieces,” Mr. Pin said. “By sharing a ‘wow’ moment, we create a love affair with the brand.”

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