Barton (UK)

“Income is the key factor here, too. Despite the fact that much of the ultra-luxury industry – jewellers, watch makers and the like – are concerned with High Net Worth individuals, this is often a poor indicator. Net worth is a marker of financial security, yes, but it is high income that drives luxury spend. Many individuals with significant net worth – HNWs and VHNWs – are no longer in prime income-earning years and now live on more modest investment income and pensions. Those in the older cohorts are also more often more concerned with legacy and passing on wealth to their children and grandchildren than they are buying the next luxury bauble for themselves. They may be able to afford both, but by a certain age such superficial interests fade away considerably.” In our Aug/Sep 2024 Diary entry, we take a look at the different social impact of luxury consumption and how it creates different consumer tiers. Download your copy here: https://lnkd.in/enyvKhf

“In 2022, the collective volume of the 100 largest superyachts was 547,807 GT. In 2023 this had increased to 564,501 GT, an increase of 3.04%. By 2024 this had risen again to 582,541 GT, an increase of 3.2%. Given these trends, we would expect volume growth to outpace length growth. Yachts delivered from 2006 onwards have an average volume of 6,218 GT, whereas yachts delivered in 2005 or before have an average volume of 4,442 GT, around 39% smaller. Average length however is more similar with 2006 deliveries onwards at 115m and 2005 and older deliveries at 109m, a difference of just 5.5%.” The Barton Equation is back again with more number crunching on the top 100 largest superyachts in our May/June 2024 Barton Diary entry. Download your copy here: https://lnkd.in/enyvKhf

This month, Barton turned five years old. Thanks to our clients and followers for helping us get there.

“The e-commerce story appeared copper bottomed. But everyone got it wildly wrong. The multi-brand platforms, squeezed by single- brand e-commerce improvements and the return to physical retail after COVID-19, were the heroes of 2020: but the likes of Matches, YNAP and Farfetch are now all but run-out. Their fall has been stomach-churningly perpendicular. Farfetch at the end of 2020 had a market capitalization of $21.68bn. At the end of last year it had dropped to $250m. It is now worth around $3.5m. The similarly beleaguered Matchesfashion sold in December last year to Frasers Group for $63m (it was valued at over $1bn when Apax Partners bought it in 2017) and was shut down completely by Frasers Group in March this year, having failed to turn the business around and ruling out the heavy restructuring required. . Luxury boutique real estate, by way of contrast, has seen more than $9bn investment from luxury brands since the start of last year. Despite growing sales on their e-commerce platforms, brands clearly see a center-stage role for physical retail outlets beyond that of a glorified gift shop for a brand museum.” In our Mar/Apr 2024 Diary entry, we look at the staying power of the brick-and-mortar luxury boutique. Download your copy here: https://lnkd.in/enyvKhf

“Of course, part of the charm of boutique hotels is that they don’t attract people who like chain hotels. They tend to attract people who dislike copy and paste, inauthentic hospitality experiences. People who prefer character, smaller properties, individuality, and the absence of a corporate dead-hand. Whatever crossover there is between points-junkies and boutique lovers largely centres around the separation of business and leisure travel: high-end business travel is strongly correlated with chain hotels, even if the guest personally prefers a boutique experience.” In our Jan/Feb Diary entry, we take a look at the increasing number of partnerships between boutique hotels and large loyalty schemes. Download your copy here: https://lnkd.in/enyvKhf

“Philanthropy didn’t do Vanderbilt any favours either. In 1873, he donated $1m as a foundation endowment to the eponymous Vanderbilt University in Nashville, Tennessee, the largest single donation at that time. Again, though many wealth comparison sites claim this is equivalent to $22m in today’s money, as a foundational endowment, this would be nowhere near sufficient. In 1869, Harvard University’s total endowment was about $2.3m, so a foundation gift of half of that a few years later would be substantially more than $22m in 2023 terms. If we use the ‘relative output’ value again, this would be around $2.8bn which, given Vanderbilt University’s current endowment of $10.9bn, feels a lot closer to today’s equivalent of a foundation endowment. Despite this astonishing philanthropy, the Vanderbilts that came after the Commodore struggled to ingratiate themselves to the old guard…” In our Festive Edition Diary entry, we look at the relative values of wealth in the Gilded Age. Download your copy here: https://lnkd.in/enyvKhf Wishing all of our clients and followers a very merry Christmas and a prosperous and happy New Year.

“As the electric champion, Tesla had every expectation to remain the dominant brand to beat in the sector, but in the long run, its strategy has always been to offer more affordable vehicles. This runs counter to the philosophy of luxury marques who, like watch brands, are careful to burnish their exclusivity credentials even when, in the case of Porsche, their production volume tells another story. For high-end brands such as Mercedes-Benz, BMW and Audi, the move to electric soon became inevitable with the regulatory environment forcing their hands. Tesla had a head start in manufacturing terms, with its Gigafactories created purely to build electric vehicles. However, the German giants were confident and perhaps even complacent, that their highly desirable and long- established brands would win out in the end. In May this year, Mercedes Benz’s North America CEO had a message for Tesla: “We want to be the most desirable electric vehicle luxury brand. We don't see Tesla as a luxury competitor.” In our October Diary entry, we look at the car revolution’s impact on brand reorientation. Download your copy here: https://lnkd.in/enyvKhf