NEW YORK — 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.
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 $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.
Here are edited excerpts of Consolo’s interview with The Associated Press.
Q. What’s the current state of the luxury business?
A. 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.
Q. Other big challenges?
A. E-commerce remains some- thing luxury must work hard to embrace, and consignment stores do provide both a challenge and opportunity. A great concern ... 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.
Q. The affluent shopped ‘til they dropped, then pulled back in the financial meltdown. Is there a shift in priorities?
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. ... It’s about the experience.
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, doesn’t happen now.
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.
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.