When The Rich Stop Spending

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When The Rich Stop Spending

Two years ago, it looked like a slam dunk of a business idea…

Neiman Marcus, one of the world’s pre-eminent luxury retail brands, was ready to go public amid near daily headlines about the world’s rich, the not-so-rich and the wannabe rich paying ever higher prices for, well, you name it…

Bigger homes in the Hamptons. The priciest art work. The “blingiest” of diamonds. The haughtiest of haute couture.

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But something happened between 2015 and now.

  • It’s not just Neiman Marcus, which last month killed its plans for an IPO (after reporting five straight quarters of declining sales).
  • Or home prices in the Hamptons, which recently fell 17% compared to year-ago levels.
  • Or art market prices, which crashed last year as well.
  • Or even dull jewelry sales, with Tiffany’s reporting vastly disappointing numbers.

(How desperate does it look when a “luxury brand” like Tiffany’s spends $10 million to appeal to the unwashed, overindebted masses for its first-ever Super Bowl commercial?)

Quite simply, “The Best of Everything” doesn’t seem to work anymore as an investment strategy.

And amid a stock market that continues to march higher and higher, that’s a problem.

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