NEW YORK (AP) — For more than 30 years, real estate broker Faith Hope Consolo has trekked up and down side streets and combed through clothing racks at stores all over the world to find new fashion designers to bring to the U.S., from Jimmy Choo to Paul Smith to Giorgio Armani.
As a result, Consolo has helped to revitalize Madison Avenue and Fifth Avenue as hubs of luxe shopping as well as reshape other retail corridors of the country from Los Angeles’ Rodeo Drive to Boston’s Newbury Street.
Consolo, now chairman of Douglas Elliman Real Estate’s retail group, has seen many trends in her position on the front lines of luxury spending: from the shop ’til you drop” mentality that lasted for two decades until the Great Recession when shoppers retrenched or hid their purchases in brown paper bags. Now, she’s witnessing the post-recession preference for splurging on vacations rather than dressing head-to-toe in designer duds.
The changing habits have helped to slow luxury sales. According to consulting firm Bain & Co., global sales of personal luxury goods at constant exchange rates were expected to rise 4 percent to 224 billion euros, or $245 billion, last year, lower than the 7 percent growth rate from the previous year. Still, the luxury business has more than recovered since the downturn. According to MasterCard SpendingPulse data, which tracks sales across all kinds of payments, luxury sales in the U.S. hit $12.7 billion last year, compared with $11.4 billion in 2007.
In a wide-ranging interview with The Associated Press, Consolo discussed Birken bags, tourist spending, the shopping habits of millennials and more. Here are excerpts edited for length and clarity.
Q. You brought Jimmy Choo to the U.S. back in the early 1990s. Back then, he was designing shoes for Lady Diana and other royal family members. How did you find him?
A. I got lost (in London). I see this one shoe in the window. It was a beautiful, beautiful shoe.
Q. What’s the current state of the luxury business?
A. It’s bastardized. I think people equate luxury just with price. Luxury (in the 1980s and 1990s) was different. Luxury was less available. It was more about quality than quantity. It was more of a special customer. Now, luxury is not only mass produced, every designer lends his name. You can buy the Oscar name for a bottle of perfume.
Q. Other big challenges?
A. E-commerce remains something luxury must work hard to embrace, and consignment stores do provide both a challenge and opportunity. A great concern going forward is the staggering amount of student debt millennials are accumulating. The future affluents (because they’re doctors, lawyers, MBAs) can’t enter the luxury shopping market as early as previous generations because they’re paying off tens, if not hundreds of thousands of dollars, of student loans. The millennials who have a moneyed background will keep things going, but aspirational shoppers will remain just that for a while.
Q. The affluent shopped ’til they dropped and then pulled back during the financial meltdown. There’s a shift in priorities, right?
A. Before, they were buying these products like they were bread. It was more about the consumption and having ten of this and eight of that instead of getting a unique black lizard bag…It will never go back. The shift in the trend now is not that fashion is out. It’s about entertainment. It’s about going on very luxurious holidays. Immersing in ridiculous events — with food and fashion. It’s about the experience. That’s why Hermes still shines because you still can’t get the Birken bag — no matter what time and when you want to do it.
Clothing is a challenging market. They’re still buying pieces. But the old days where people bought their entire wardrobe from Armani, or Valentino or Chanel, that doesn’t happen now.
Q. Which luxury brands do you most admire and why?
A. Hermes and Chanel, because they have remained true to themselves. They didn’t introduce bridge or even lower-priced lines to attract the dollars of the aspirational shoppers. And thus they didn’t lose those dollars during the downturn. Tiffany, on the other hand, courted that customer, and literally paid the price during the downturn. It still is. Let’s see what will happen in the timepiece sector as they react to the Apple watch — and if Apple’s luxury version will succeed.
Q. Is part of your job educating landlords about new designers?
A. A lot of owners before were less sophisticated about the brands, although they owned beautiful buildings on Madison and Fifth. They didn’t travel the world. I remember bringing Prada and this owner said to me, ‘Faith, what’s wrong with you? Who would pay that money for nylon shoes?’ He owned like 50 buildings.
(For Gianni Versace), I called the owner. He kept screaming at me, ‘Johnny who? I’m not leasing to anybody called Johnny.’ I said, ‘No. It’s Gianni.’ I had to go there and literally paint the picture.
When I made one of the first Fresh deals, they didn’t want it either. I went to the landlord’s office. I brought the soap. I brought the hand cream. I told everyone in the office, ‘Stay here, smell this.’ I was putting hand cream on everyone.
Q. Prices for designer goods have soared.
A. The everyday Manolo (shoes) used to be $200 to $400. Now, it’s $600 to $800.
Q. Are prices stabilizing now?
A. Yes. They feel they’re not reaching the higher-end consumer. There’s been some talk from some European houses to lower prices.
Q. Macy’s and others have cited lower levels of spending among international tourists. Any worries?
A. We will be able to evaluate that over the summer. I think it’s going to affect the department stores more than the brand stores. I think the brand store is what attracts them. So they will buy one Chanel bag, one pair of Nike sneakers.
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