"Before it hit the fan, people were spending for therapy, and now they're spending out of a sense of exuberance and happiness," Furman says. "The psychology of buying is different now."
With the number of affluent and wealthy U.S. households growing this year for the first time since 2007 — from 10.6 million to 11 million — fewer luxury spenders are feeling guilty about their purchases (45% this year from 54% in 2009) or about being seen as wealthy (30% from 42%). American Express and the Harrison Group estimate that this will bring an extra $28 billion into the luxury market this year, an increase of 7% from 2009.
The emboldened luxury consumer means an enriched luxury retailer, with MasterCard (Stock Quote: MA) Advisors' SpendingPulse reporting luxury sales up 15.5% in April compared with the same period last year after a 23% jump in March and 15% growth in February.
Saks' (Stock Quote: SKS) first-quarter sales jumped 7% and same-store sales increased 12% from 2009. Burberry's sales climbed 7%, while the relatively recession-resistant Tiffany & Co. (Stock Quote: TIF) experienced a 22% boost in sales, driven by a 50% gain in Asia.
This doesn't mean retailers have returned to luxury consumers' good graces, however. Despite a renewed focus on customer service during the recession, the Luxury Marketing Council has found that high-end U.S. consumers are largely disenchanted with the level of service provided within the luxury sector.
Complaints range from understaffing to insufficient knowledge of products and their advantages over competing items — increasingly important as wealthy and affluent customers become connoisseurs of their categories of choice and perform increasing amounts of research. Even consumers who were hardest hit by economic instability still have considerable discretionary income, which retailers should be loathe to leave on the table.
"If you're worth $75 million and lose $30 million, you still have $45 million to play with," Furman says. "You're not exactly impoverished."
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