Meanwhile, Reuters reports that Richemont, the Swiss-based luxury goods maker started by the Rupert family in SA, plans to propose raising new equity at its general meeting in September to improve cash reserves and liquidity as Covid-19 continues to eat into earnings.
Richemont owns some of the world’s most expensive jewellery and watch brands – Cartier, Piaget and Van Cleef & Arpels to name a few. But it’s not looking pretty: Richemont already reported a 67% dip in net profit for the year to March.
Nor is it alone. Luxury fashion houses such as Ralph Lauren, Hugo Boss and Michael Kors owner Capri have seen a similar drop in sales revenue, as the London-based portal Business of Fashion has written about extensively in recent weeks.
Which brings me back to my previous point of how the world’s well-heeled are likely to adopt more virtuous spending patterns than sporting the latest bling in future. It’s a trend that international property group Knight Frank highlighted earlier this year in its annual Wealth Report, published in March on the eve of the Covid storm.
Not that we should expect high net worth individuals to stop forking out massive amounts of cash on coveted objects of desire. Last year, for example, a bottle of The Macallan 1926 Fine & Rare whiskey fetched a whopping £1.2m at a Sotheby’s sale, while a gold and diamond encrusted Hermès handbag was auctioned by Christie’s for HK$2m.
However, Knight Frank refers to a seismic change to a more altruistic approach to investment and spending.
Ironically, given that it was prepared before Covid, one of the key themes that emerged from the report is a renewed focus on wellness, which Knight Frank suggested will drive investment decisions among the world’s wealthy over the next decade.
Liam Bailey, Knight Frank’s global head of research, argued that promoting healthier and longer lifestyles will generate more interest than selfless endeavours such as “giving back” and “impact investing”.
Though Bailey’s prediction was made pre-pandemic, it now looks remarkably prescient.
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