Strategy in TECH...
Ferrari NV (NYSE: RACE), manufacturer of the leading luxury sports car embraced by many wealthy car enthusiasts, had its scariest ride ever on Wall Street last week, when its stock value had the single largest daily drop in the company’s history. In just one day, the value of RACE shares closed down by 15%. Does this mean trouble for the Luxury market?
It was a small thing really. I mean, any decline in revenue is not good, but a 3% decline doesn’t sound particularly troublesome. But when that small 3% revenue decline hit Moët Hennessy Louis Vuitton (LVMH), that slight shudder hit more like an earthquake that had the whole world of luxury shaking. You see LVMH is the world’s most valuable luxury company.
Or, I should say, LVMH was the world’s most valuable luxury company…
According to the latest data from national realtor Redfin, sales of luxury homes in the U.S. have declined a record -44.6% for the three-month period ending January 3, 2023, on a year-over-year (YoY) basis. That result outpaced the decline in sales of non-luxury homes of -37.5%.
Walmart surprised analysts in its latest earnings report for its fiscal second quarter. After having issued a warning last month that its profit may drop as shoppers were feeling the effects of high inflation and focusing purchases on necessities like food rather than discretionary (and more profitable) items such as electronics. But on Tuesday, the company reported solid revenue increases and although earnings tightened a little, they still beat analysts’ forecasts.
In a tough economic environment for retailers, how did they do it? The company says they are attracting more middle- and high-income shoppers. These high-income consumers are ‘trading down’ – an effect that has been discovered in past times of economic slowdowns and recessions. And it seems to be happening now…
A little more than ten miles south of Myrtle Beach in South Carolina, you come to a tiny, unincorporated area known as Murrells Inlet. Known as the Seafood Capital of South Carolina (or at least that is what they say), like many seashore areas, Murrells Inlet is a true lifestyle community where residents and visitors enjoy outdoor living, great seafood restaurants, gorgeous beaches, lots of wildlife in the natural marshlands, and more. It is also where you’ll find Custom Theater & Audio, a custom integration business co-owned and managed by John Sciacca – and just one of the many hats he wears.
Now, adding yet another hat, he is also the new owner of Cineluxe, an online media site seeking to provide lots of informative and interesting content – as well as added support – for the luxury home entertainment consumer.
If you are like many of our readers, you are either a custom integrator or specialty AV retailer who serve the Affluent ($75,000 per year income and up) market. Two new pieces of market research provide colorful illumination of the holiday shopping plans of Affluents for this coming holiday season.
In news sure to send a chill through the backbone of every luxury retailer and manufacturer of every luxury product – electronics included – eMarketer is reporting that new research makes it clear that Affluents, loosely defined as those with household incomes over $100,000, are now shopping online in increasing numbers. Up until now, online shopping was predominantly the domain of the mass consumer, with Affluents preferring gorgeous showrooms laden luxury appointments and knowledgeable, well-dressed and poised staff who cheerfully kowtow to them. Not any more…
AudioXperts
Last month, we reported on the pre-launch of a new brand…the rather boldly named AudioXperts – founded by well-known industry veteran, Eli Harary and the team of sales, marketing, engineering, and product specialists he assembled. This pre-launch announcement was then followed-up by an official launch at a press event in Manhattan on Tuesday of this week. For a lot of reasons, this was a notable event – not the least of which is that there are very few new companies launching in the current incredibly difficult industry environment. But this “birth of a brand” also – for a number of reasons – set a very high bar for expectations related to its launch, which drew a substantial press contingent.
