Despite the biggest one day drop in the Dow since 1987, tonight in Manhattan restaurants will still be full, Town Cars will still be waiting by the curb and Champagne bottles will still be uncorked. But maybe there will be fewer orders of truffles and more of chicken, some people might take a cab instead, and the Champagne may be by the glass instead of the bottle.
During the recent economic boom New Yorkers of many different backgrounds and incomes have become so used to luxuries of all kinds that they tend to regard them as a matter of course. In much of the rest of the country, however, people rarely dine out, a limo is strictly for weddings and prom night, and Champagne is often eschewed in favor of beer. Yet in Manhattan and its siser cities–San Francisco, Washington, Shanghai, Chicago, London, Moscow, et al–the lingua franca is American Express.
And on this night when the market fell nearly 780 points and is flirting with slipping below 10,000, amidst the whirl of cocktail parties and dinners at Nobu many New Yorkers should not be blamed for hearing a little voice in the back of their head whispering: “This is about to all change.”
Tomorrow stores like Hermes, Tiffany and Louis Vuitton will open their doors and customers will still come in. These customers may not buy as extravagantly as they once did and some may not return at all. For some people, there is never a time not to think about luxury, because for them the line between luxury and necessity has blurred completely. For others, it may just seem in bad taste to spend at a time when so many are pulling in their horns. And, of course, there will be those who simply can no longer afford it, any of it.
The luxury business will continue. Expensive shoes, handbags, wristwatches and wines will still be made and consumed. But not in the same way, not after today for a while. Companies such as Richemont and LVMH will be forced to adjust their profit targets and sales people around the world will lose their jobs as stores close.
In years to come people will look back upon this period as a golden age of sorts, when so many felt so rich for so many of the wrong reasons. In a way, it’s not all bad–except of course for those who will lose their jobs–because it had to stop somewhere. Parties can’t last forever, wine bottles empty. For the luxury business, it will be a time to retool, to rethink what they do. Some companies will disappear–but then again some always will. Like a forest after a fire sweeps through it, things may look pretty black for a while but before too long new buds will emerge and old oaks will flower again. When that happens, we won’t take luxury for granted anymore. At least not at first.