Zara's India plans (finally!)... and what happens to Gucci?

Online retail newsletter Retail Angle says that Tata's retail arm Trent Ltd has formed a 51:49 JV with the Spanish Inditex Group, which owns Zara.

As part of the memorandum of understanding (MoU), Inditex will hold 51% in the JV, while Trent Ltd will hold 49%. The first of the stores will be opened in 2010 in New Delhi, Mumbai and other major cities of India. The agreement was inked at the Inditex headquarters in Arteixo, Spain.

In other news, Armani has apparently shelved plans for India's first Armani Cafe in Bangalore. Says Retail Angle:

For over a year, Giorgio Armani India, a 51:49 joint venture with DLF, has been reported to be working on setting up a 10,000-sq ft Emporio Armani store accompanied by an elite cafe-cum-bar at The Collection Luxury Mall, a part of UB City on Vittal Mallya Road, promoted by UB Group and Prestige Developers. This was to be India's first Armani cafe, which normally operates as part of the large format fashion retail stores. Media reports now say that the plans for Armani store and cafe at UB City have been dropped, for the time being at least. The decision to slowdown new stores was taken as a result of deteriorating consumer sentiments, and given the fledgling nature of India's luxury market. In late 2008, Armani had opened its first stores at DLF-owned Emporio luxury mall in New Delhi and was expected to roll out stores in Bangalore and Mumbai in 2009.

And finally, the Economic Times recently reported that the Murjani Group may sell its stake in the Gucci India business. The newsletter continues:

The Mohan Murjani family's Indian arm, Brand Marketing India Ltd (BMIL), is preparing to divest the Indian operations of Gucci. They have appointed an investment banker to help them find a strategic partner for the Gucci business. The Mumbai-based BMIL operates with a number of domestic licensing rights for international brands like Gucci, Calvin Klein, French Connection, Jimmy Choo, Bottega Veneta and La Perla. In recent months, BMIL has given away the rights for Jimmy Choo and Bottega Veneta stores in New Delhi and that of the yet to-launched French luxury intimate wear La Perla. The move to divest Gucci comes at a time when speculation has been gaining ground about the liquidity position of the Murjani company.

IHT Luxury Conference postponed

Due to the horrible terrorist attacks in Mumbai last week, the IHT Luxury Conference (scheduled to take place on December 2-4, 2008 at The Imperial Hotel, New Delhi) has now been postponed to next year.

An article in Reuters confirmed:

"We had already put in place security measures but we are, of course, sensitive to the safety concerns of all our conference participants following the terrorist attacks on Mumbai," said Stephen Dunbar Johnson, Publisher of the IHT.

"We felt it was inappropriate to hold this conference at such a difficult time for India - but we plan to be back as soon as the situation is stabilised," he added in statement issued on Thursday.

The IHT said it was "fully committed to bringing its conference to New Delhi early next year."

The Conference is expected to be back on track in New Delhi by March 2009, however, the dates are yet to be confirmed. Stay tuned for more on this.

Armani, Diesel on Indian shores

Giorgio Armani and Emporio Armani have finally opened shop in Mumbai. On Monday (Oct 13), the two stores were launched at the Emporio Mall in Delhi. According to an article in DNR, the stores are managed through a joint venture between Armani and real estate firm retail arm, DLF Retail Brands Pvt. Ltd.

John Hooks, commercial and marketing director of the Armani Group, said the company is "playing it fairly carefully" as the country is developing slowly. "We need to be in [Mumbai], and we need to find the right location," said Hooks, noting that real estate space has been one of the main issues preventing an expansion in India.

"DLF has got some big plans for malls in Mumbai, and we are also tempted by Bangalore," said Hooks, noting that he had seen some locations there, but eventually chose not to take them. "We need to get to know the country, the market and the consumers," said Hooks. "We have no preconceptions."

Earlier this year, Cristiana Ruella, director of general affairs at Dolce & Gabbana, said the company had signed an agreement with DLF Group to secure spaces in the Emporio mall for that company's first boutiques in India. Salvatore Ferragamo SpA also said it plans to open 10 stores in India by 2013 — including three this year — after launching a joint venture with DLF. This year’s units are slated for New Delhi, Bangalore and Mumbai. Ferragamo opened its first own-branded Indian store in 2006 at the Grand Hyatt Plaza Hotel in Mumbai. Gucci is planning its third Indian location at the Emporio mall this year.

Diesel in 2009
Meanwhile, Diesel is also looking to expand its business in the east and plans to enter India in spring 2009. To do so, the Italian apparel company has formed a joint venture with Reliance Brands Ltd., controlled by Reliance Industries Ltd. Diesel will hold a 51 per cent stake in the partnership. Stores will initially open in Mumbai and Delhi, followed by Bangalore, Hyderabad and Chandigarh.

India considers lifting limits on foreign luxury brands

One of India's top economic policymakers said the government would consider lifting a law that limits foreign brands from owning more than 51% of their operations in India.

"We are considering it, seriously," India's Trade Minister, Kamal Nath, told a meeting of French luxury executives in Paris. Reuters says that in addition to inadequate infrastructure and excessive red tape, luxury brands operating in India face import taxes that can reach 500%.

Within India, significant political pressure exists from the country's 12 million or so small shop owners to protect India's domestic retail industry from foreign competition.

Meanwhile, a McKinsey study released last week predicted that these barriers to foreign firms will indeed fall, paving the way for organized retail to earn 14-18% of India's $450 billion market by 2015.

By comparison, the Financial Times currently estimates organized retail at 20% share of market in China and 36% in Russia.

Source: Luxury Brand Network

IHT to host '08 Luxury Conference in Delhi

After Paris, Moscow, Istanbul, Dubai and Hong Kong, the International Herald Tribune will hold the eighth edition of its annual Luxury Conference in New Delhi, India. The topic for this year's conference is 'Sustainable Luxury' and will take place at the Imperial Hotel from December 2nd to 4th.

The focus will be on three key areas: how to sustain brands in an increasingly crowded market, how to sustain profitability in a challenging economic environment and how to sustain environmental performance throughout the supply chain.

IHT's fashion editor Suzy Menkes has said in a statement:

"India is a unique marketplace for luxury and its heritage and culture of exceptional objects goes back in an unbroken line to the Mughal era. Yet at the same time, modern India brings a feisty, entrepreneurial spirit both in creating and selling fine goods. India also relies on its own exceptional craftsmanship, which, in turn, is used by international designers as an important resource."

The confirmed list of speakers include Indian Commerce Minister Kamal Nath, Francois-Henri Pinault (Chairman & CEO, PPR), Christian Blanckaert (Executive VP, Hèrmes International), designers Manish Arora, Dries Van Noten, Roberto Cavalli, Viktor & Rolf, Nicolas Ghesquiére (Balenciaga), Tomas Maier (Bottega Veneta), Elizabeth Hurley, Mohan Murjani (Chairman, Murjani Group), Charu Sachdev (CEO, TSG International Marketing), Patrick Chalhoub (Joint Chief Executive, Chalhoub Group), among several others!

Kenzo debuts in India; wants to woo the sari

Kenzo, the luxury label of Japanese origin now owned by LVMH, opened shop in India at the luxury mall Emporio last week. And Jean Keller, the brand's wholesale commercial director, was at hand to launch the store and spin stories about how Kenzo wants to permanently endear itself to the Indian woman.

In an interview to Business Standard, Keller said, "We are in discussion to start a range of saris. Kenzo did the kimono, so why not the sari? Kenzo is a multi-cultural brand."

The interest in the sari, apart from being a pragmatic approach towards design and silhouette, also shows an astute (astute because few other luxury brands have been able to understand this so far) understanding of how the Indian woman consumer spends.

Points out Keller, "Women here still prefer to wear Indian designers. The Indian designers are very strong in that segment and are strongly established."

You don't say, Sherlock.

The brand hopes to introduce its entire range in India in the next five years. To begin with, the Delhi store will stock men's ready-to-wear, accessories and accessories for women.

------------------

Update
The brand has simultaneously opened a Mens store at the JW Marriott in Mumbai as well.

DFS bags Mumbai airport luxe development contract

I'd previously written about how retail space at India's airports was a gold mine waiting to be excavated. Now, DNA says that DFS Group, a part of French luxury house LVMH, has been awarded the duty-free retail development contract for Mumbai International Airport Ltd (MIAL). So now, Indian travellers can buy some of the world's leading luxury brands at the airport on your way to Paris, London, Milan or Hong Kong. In fact, travellers at the international terminal have already been greeted by banners announcing the arrival of luxury retail, to be started by January 2008.

Earlier this year, MIAL had floated a global tender under which a joint venture of ITDC and Spanish firm Aldeasa was selected the duty-free operators with a bid amount of Rs 571 crore. But due to issues like a delay in forming the JV as also an attempt by ITDC/Aldeasa to renegotiate the terms of the contract, MIAL decided to terminate the contract and award it to DFS Group, the second highest bidder. Reportedly, the ITDC / Aldeasa combine felt that it had bid too high to make any significant business sense.

The new contract with DFS Group entails the payment of a minimum guarantee to MIAL of Rs 250 crore for three years over and above revenue sharing. Sources said duty-free activities in Mumbai airport accounted for revenues of Rs 45 crore last year.

Located in the international Terminal 2C, the new duty-free shopping area will be spread across 24,541 sq ft. Of this, 14,585 sq. ft will be at the departure level, 8395 sq ft at the arrival level and 1560 sq ft will be for storage.

An executive with MIAL told DNA Money: "The two main revenue-generating items for duty-free shops the world over are liquor and tobacco. We expect the same to be true of Mumbai. There will also be shops selling clothing, cosmetics, perfumes and electronic goods as also various other boutiques."

Duty-free shops are retail outlets that do not apply local or national taxes and duties and are usually found in international airports, sea ports or passenger ships. These shops work on the basis that most countries do not levy taxes on goods to be exported. Internationally, they form a source of significant profits for airport operators.

***

On another note, LVMH seems to be pushing for India to become a hub for luxury product manufacturing. In fact, LVMH Global Head (Investor Funds) Daniel Piette is currently in New Delhi along with South Asia & Middle East head Ravi Thakran to initiate talks with the potential companies to invest in.

Says the Economic Times:

When contacted LVMH India group director Vispi Patel confirmed that Piette were here. He, however, chose to downplay the visit.

"They were here to meet different people," he said and declined that any decision on manufacturing unit has crystallised. "We are looking at India as a strong sourcing destination and that explains our interest in the market."

This comes close on the heels of the luxury giant's decision to launch a e500 million private equity (PE) fund in India, by March next year. The company would then begin its investment across different segments. These would include ready-to-wear apparel, watches, jewellery, home furnishing and also leisure. These investments would be mostly in mid-cap companies, Mr Patel added. "We would explore all the sectors that most PE players don't look at."

LVMH had launched two similar PE funds in Europe for investments in area of its core competence. And focused on mid-cap companies that offered expertise in those areas. "The focus would largely be the same for India as well. We would also look at investing in existing manufacturer who could offer expertise lets say, in leather," Mr Patel added.

Earlier this year, Louis Vuitton (LV) reportedly set up a 50:50 JV with South-based maker of high-end leather accessories, Hi Design, to manufacture leather accessories. The greenfield project is looking at setting up a leather manufacturing facility in Puducherry.

Source: Economic Times

Now you can bag a Bottega too

...if you can afford the price tag, that is. Alongside the Jimmy Choo store opening a day before, Bottega Veneta's famed intrecciato weave bags are now on display at its store at the Galleria, Nariman Point. Opened on November 22, Bottega has been brought to India by the Murjani Group, which has also brought in Gucci, Jimmy Choo and soon La Perla.

The Bottega store offers luxury enthusiasts a range of handbags, shoes, small leather goods, belts, eyewear and luggage.

In an exclusive interview with Hindustan Times, Bottega Veneta's creative director Tomas Maier said the idea of the launch is to get the brand closer to Indians who already shop at Bottega boutiques abroad and also to introduce the same to those who are not familiar with the brand.

"The Indian consumer is very sophisticated and this market is very dynamic, so our hopes are high in India," he said. "India has a tremendous artistic and cultural heritage so I think the customer's aesthetic sensibility is very strong here. At the same time this is a period of great development in India and there seems to be a very international outlook with respect to fashion."

Jimmy Choo steps into India

British luxury label Jimmy Choo opened its doors to India with its first store in Mumbai, at the Hilton Towers' Galleria in Nariman Point on Wednesday. The store shares the neighbourhood with Gucci, which is also the largest single-brand luxury store in India yet.

Both brands have been brought to India by the Murjani Group, and an exclusive launch event will take place for Jimmy Choo lovers on December 6. Doffing its hat to the brand's English roots, the JC event will be a 'Champagne High Tea' - very unlike the regular cocktail party launches that Mumbai socialites have grown accumstomed to.

Says Mid Day:

Probably the most expensive pair of heels (Rs 60,000 approximately) in the city, The Sign adorns the entrance, with a lifesize poster of Canadian supermodel Heather Marks for company. You might wonder if it's "possible" to part with a sizeable chunk of your monthly income on a pair of heels. But when they are selling you Hollywood style glamour, the zeroes invariably fade into a blaze of arc lights.

Well said, eh?

2 more Gucci stores in the offing

Ahead of Gucci's official flagship store launch in Mumbai on Saturday (October 13), CEO Mark Lee said in an interview to Mint:

Where does India fit into the larger scheme of things at Gucci?
India will no doubt in the future, in five, 10, 15 years—it is a question of time and remains to be seen—become one of the important countries in the word for luxury and for the Gucci brand. We are at the official beginning of our adventure in India. We have two more stores coming up soon in New Delhi—one before the end of the year and another when the (DLF) Emporio Mall finally opens in the first half of 2008. We will also be looking at other cities such as Bangalore.

Manish Arora at World Luxury Congress

Indian designer Manish Arora will be a speaker at this year's World Luxury Congress in London starting October 22.

Arora holds the distinction of being the first Indian designer to be invited to show his collection at the Paris Fashion Week this year, after showing for four consecutive seasons at London Fashion Week.

Pic courtesy: Elle UK

Mahindras move to luxury retail

Telegraph India is reporting that the Rs 18,000 crore Mahindra group is entering the retail business, under the Mahindra Retail brand.

Raghunath Murti, executive vice-chairman of Mahindra Intertrade, said, "The group believes that this is the opportune time to extend its business to direct retailing, when the organised retail market is expanding in India."

Mahindra Retail is planning multiformat stores for luxury lifestyle products, mainly in soft goods. The stores will open within a year and the company will sell private labels and international brands.

Rothschild investing in Indian luxe retail

Llyod Grove of Portfolio.com recently did an interview with Lynn Forester de Rothschild, CEO of EL Rothschild, the holding company she owns with her third husband to manage investments in the Economist and various enterprises in India. Those include FieldFresh, a startup that will grow and export Indian fruits and vegetables for markets in Europe and Asia, and a soon-to-be-announced retail venture aimed at the exploding Indian middle class. Here's an excerpt from the interview:

L.G.: What else will you do with E.L. Rothschild?

L.R.: We are also looking very seriously at the retail space in India, both in terms of front-end retail as well as Indian brands that we believe have opportunities. I think that'll be the next area where you'll see some announcements from us.

L.G.: When? Can we make some news?

L.R.: Not by the time you go to print. [Laughs.]

L.G.: Give me a hint. I know you're on the Estée Lauder board, and I know you're very interested in luxury goods in India. Would it have something to do with that?

L.R.: Well, we're looking at those. You know India has luxury in its DNA. All you've got to do is look at the maharajas and look at the Taj Mahal. There's no Hermès or Louis Vuitton that's going to tell India anything about luxury. Luxury is a very interesting, undeveloped piece of India. I don't think it will be a big piece for a long time, because of the income level, but I think it's interesting. We do think luxury when we think retail, but we also think more mainstream, aspirational brands and opportunities

L.G.: And the country obviously has an exploding middle class, so that could be a good market internally-or are you thinking for export as well?

L.R.: I am thinking more about the domestic markets, more about the growth of the domestic market, because 10 million people are entering the middle class every year in India. You know, there are more billionaires in India than anyplace else. Let me put it this way: Every day in India, the entire nation of Great Britain is on the train, one way or another. So the numbers are pretty colossal. Seventy million people in India can afford anything they want. It's a small percent, but that's a reasonable number.

L.G.: That's a pretty healthy market.

L.R.: Two hundred fifty million are middle-class, so you might not go for the Chanel glasses, but you sure could go for an Estée Lauder lipstick or a Starbucks coffee.

Pic courtesy: Portfolio.com

LVMH invests in India

Sorry for being out of action for a while, but here's some news that's brightened up my day. Reuters reports that LVMH's investment fund L Capital Partners is to launch a fund targeting brands in emerging markets in Asia, and aims to spend US$ 560-700 million in India.

"We are looking to invest in retail and brands of Indian origin," Business Standard's website cited Ravi Thakran, group president of LVMH's operations in South, Southeast and West Asia, as saying.

The fund will be launched within 12 months, Thakran said, adding that it may acquire brands not classified as luxury but which have the potential to become such. Targets in India will include retail chains, jewellers, traditional ayurveda medicine producers and spas.

Thakran also said LVMH plans to acquire real estate in India 'to create luxury destinations in the country... such as hotels or spas.'

Fab read!

Just wanted to write a quick post on Vogue India's first issue. First things first: I didn't think much of the cover. Technically it was perfect, but I found it a tad boring. Also, it seemed to be channeling Vogue China's 2005 inaugural cover. In fact, I liked the China cover better as the clothes had texture and made the cover interesting, where as the Indian cover looks like an ad for L’Oreal.

But never mind that. I've discovered that there's a lot of truth to the adage 'Don't judge a book by its cover'. I just picked up my copy yesterday (after my local vendor said it was all sold out... how fab is that?) and I can tell you it's a riveting read. Haven't finished the entire book yet (it's quite a hefty issue), but the articles so far are well-written and meticulously researched. The writing is intelligent, mature and knowledgable, and you know the people dishing out the goods know what they're talking about. Unlike other magazines, where I get the distinct impression it's being written by amateurs with little knowledge of the industry and what's worse, an eye for things that are purely cool.

Being trendy is one thing, being on trend quite another. And that's where I think Vogue scores high marks. Yes, it caters to a high-end market and only luxury goods really advertise in it, but I discovered yesterday that it also talks to you in a manner that seeks to educate you enough to have your own take on fashion. Everyone else just demands that you wear what's hot right now. Vogue tells you if you can't afford Balenciaga you could shop cheaper and still be on trend. It's not called the fashion bible for no reason, huh? I can already see other fashion magazines running for cover.

India in Vogue

Here's a look at the inaugural issue cover of Vogue India. The magazine is all set for a grand launch at the Umaid Bhavan Palace in Jodhpur (Rajasthan) tomorrow, and features Bollywood stars Preity Zinta, Bipasha Basu and Priyanka Chopra on the cover, along with models Monikangana Dutta and Laxmi Menon.

The Business of Fashion reports that French photographer Patrick Demarchelier especially got Gemma Ward to pose with the Indian line-up for this debut, which includes contributions from some of Vogue's internationally known staffers, including Lucinda Chambers of British Vogue, who styled the cover and editorial featuring Gemma Ward.

Interestingly, the timing of the launch couldn't be more perfect. With a long tradition of luxury in India and an estimated $500 million domestic luxury market, global brands will now be more than eager to advertise their products to India's growing middle class.

India's changing demographics

The Economic Times is currently holding a Dialogue on Luxury in New Delhi, and Neelesh Hundekari of AT Kearney gave a highly-anticipated presentation on 'Indian Luxury Industry - Opportunities and Challenges'.

One of the surprising findings of the study, aided by the Indian Market Research Bureau (IMRB), was the demographic profile of the Indian luxury consumer. According to their research, 52 per cent of luxury expenditure is exercised by consumers belonging to the 25 to 34 year age bracket.

Defining the Indian consumer profile, Hundekari said, "The Indian luxury consumer is a high net-worth individual (HNI) who expects exclusivity, quality and service yet value for money. While he is willing to make an expensive purchase, he expects the best bargain."

The Indian consumer has turned a corner, it seems, as guilt was no longer associated with luxury buying. Ending on an encouraging note, Hundekari highlighted the expected rate of growth within the luxury industry in India, saying, "The luxury products category comprising watches, jewellery, high-end electronics, personal care and apparel and accessories will grow at a rate of 28 per cent per annum. In terms of revenue, the present $377 million will rise to $1 billion by 2010."

Highlights
Indians splurge $2.9 billion on luxury assets (essentially private jets and luxury homes, cars or yachts and art), spend another $953 million on luxury services and top it by buying luxury goods worth $377 million

Big spenders identified in the survey include industrialists, professionals, self-employed and top guns working for leading corporates. Consumers of luxury are located across the nation, be it Kanyakumari or Kancheepuram in the south, Jalandhar and Lucknow in the north, Surat and Pune in the west or Asansol in the east. Mumbai, Delhi and Bangalore are the top three cities in terms of rupee millionaires

A very interesting fact highlighted by the survey was the potential of India to be a source for luxury goods for consumers across the world. Manufacturing luxury items in India can grow to $500 million and India's strengths include traditional craftsmanship and low labour cost

There are a number of challenges, too, including regulatory issues and high taxation. The import duty on premium cars, for example, stood at 205% while wines & spirits invite 185% customs levy. The survey also pointed out that that import duty was high in the case of personal care items, fragrances, leather accessories and watches

Source: Economic Times

JWT partners with French B-school

Indian advertising agency JWT and French business school ESC Rennes have entered into a partnership to understand how international luxury labels can leverage business opportunities in the Indian market. This collaborative study is expected to provide both parties a first hand insight into India’s evolving luxury consumer and pathways to drive luxury consumption here.

According to a Technopak study, the Indian luxury market has a potential of approximately $14.4 billion. However, despite the massive potential of the Indian luxury market, there has been very little research to understand how international brands can leverage this market opportunity. This study seeks to bridge this understanding gap.

This study will focus on a trilogy of questions such as - What is the perception of luxury within an Indian context? What motivates luxury consumption? Is there a concept of 'Indian luxury'? Primary research, co-funded by JWT and a grant from the ESC Rennes Management Research Fund, will involve consumers as well the retail. Preliminary findings of this research will be presented at the 16th Asia Brand Congress, which is being hosted in Mumbai on September 26 and 27 .

Source: Indiantelevision.com

Barking up the wrong tree?

Time magazine recently conducted a Global Luxury Survey and had this to say about India:

For years foreign brands have been put off by this country's high import taxes (up to 50% for watches) and its shabby retail environment (there are no upscale shopping streets and few malls). But today India is experiencing a mall-building boom, perhaps a response to the sharp rise of newly affluent consumers—many under age 25. Analysts at Bain & Co. predict that the luxury market could grow 25% a year over the next three years—a far cry from the days when it was the exclusive preserve of Cartier-bedecked maharajas.



Most often mentioned luxury brands:
Three of the six most often mentioned luxury brands in India are local and cater primarily to men. Survey respondents who were asked to name the most familiar brands off the top of their head listed menswear labels—which can be explained by the fact that the majority of Indian women wear traditional saris. As foreign brands go, Swiss watchmakers have made the deepest inroads into this market, and only one foreign fashion label—Gucci—made the Top 10.

Err, am I hallucinating or did they just call Park Avenue a luxury brand???

Picture and text courtesy: Time magazine

Fat and fashionable

Even as people are sounding the death knell for fashion magazines, here's news that business is still booming for top guns like Vogue. And it's all thanks to luxury brands. An article in Guardian says:

Luxury goods, once the preserve of the rich and famous, seem to be everywhere. Confirmation that the premium product market is booming and reaching more shoppers than ever before comes next week in the bumper edition of fashion bible Vogue.

The October edition out on Monday is the biggest for almost two decades. Weighing in at more than a bag of sugar - 1.2kg - the latest tome will have 462 pages, 306 of them adverts.

But, of course, everything is bigger in America, and the US September edition of Vogue is the thickest ever at 840 pages. Seven out of every eight pages are adverts and the magazine weighs more than 2kg.

Oblivious to the financial market turmoil that dominates the headlines, the splurgers on both sides of the Atlantic show no sign of pausing for breath. And with consumer demand for luxury goods booming, premium glossies such as Vogue are enjoying the kind of advertising and circulation that other magazines can only dream about.

The article says this rise in high-end advertisers is thanks to three factors. First, relatively affordable products like accessories are being put out in the market, which has driven the surge in the number of people who can own luxury articles like handbags, shoes, sunglasses, perfumes, etc.

Brand-hungry shoppers in markets like China and India are the second big drivers. China and India - where Vogue is launched this month - have provided the luxury goods groups with new armies of consumers eager to buy western labels.

Finally, there's the "ultra-high net worth" consumer. Partly in reaction to the first group of shoppers, the super-rich are after the most exclusive items they can get. With the term "luxury" losing its cachet as it reaches mass audiences, the billionaires want a new class of treat. The prices for those products drive the overall market up further. Think Bugatti Veyron, £1.2m, the world's fastest road car, or a GoldVish diamond-encrusted mobile phone for £15,000.

"It's a new category with almost unimaginable prices. But demand is still there and the waiting lists are long," says luxury goods specialist Marc Cohen. "It's almost a case of 'build it and they will come', someone will almost always pay for it."

And while advertising sales will inevitably slump in the new year and the turbulence in financial markets does spark a global economic downturn, experts believe there will still be plenty of shoppers to support the luxury goods market. Mark Tungate, author of the books Fashion Brands and Adland, says: "If you are a real fashionista you'll just cut in other areas."

I just had to LOL@that!