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In the News

The super rich redefine luxury

The super rich redefine luxury$700,000 pens and $40,000 purses have set a new luxury standard as the super rich search for one-of-a-kind items.BY ANNE D'INNOCENZIOAssociated Press

MARK LENNIHAN/AP At a time when the average American is worried about a 30-cent spike in gas prices, the super rich are redefing the world of luxury goods.Forget the $350 stilettos. Shoes with status these days come with $1,000 price tags. And $600 handbags are so bourgeois -- A-listers these days don't want anything costing less than $5,000.

It's no secret that luxury sales have boomed over the past six years. But at a time when the average American is grousing about meager wage growth, the super rich are seeking new heights in pampering, price tags and the one-of-a-kind items that set them apart.

`INSATIABLE APPETITE'

''There's this insatiable appetite for the most luxurious,'' said Faith Hope Consolo, chairman of Prudential Douglas Elliman's retail leasing sales division, who has brought European designers including Versace and Valentino to the United States over the past two decades.

Luxury sales worldwide topped $150 billion last year, of which 30 percent came from the U.S., where such sales have rebounded after a pause following the 2001 terrorist attacks, according to Telsey Advisory Group's James Hurley.

The weakening dollar has fueled a surge of tourists from Asia and emerging countries like Russia. And besides investment bankers and Internet entrepreneurs, the latest source of new wealth is hedge fund managers -- the top 25 last year made more than a combined $14 billion a year, according to Institutional Investor.

Experts believe luxury spending -- growing at double-digit rates for many high-end purveyors -- won't lose momentum.

The over-the-top splurging is happening at a time when the income gap between the wealthy -- those making more than $350,000 -- and everyone else is the widest since the Depression Era. While the average American worker's income increased 4.6 percent in 2006, the wealthy have enjoyed double-digit gains.

Carol Brodie is chief luxury officer at CurtCo Media, the publisher of the Robb Report, whose annual issue features the year's best-of-the-best like a $330,000 Mikimoto golden pearl choker. She said the super rich don't want just the most expensive -- they want the rarest items.

Unlike the 80s and 90s, ''it's not about the logos,'' she said. ``It shouts quietly.''

ONE-OF-A-KIND JUNK

Montblanc recently sold a $700,000-plus pen just a few days after it showed up in the New York store. The pen, adorned with rubies, sapphires and diamonds, took 15 months to handcraft. Cartier gets $1 million to $2 million sales checks -- rare only a few years ago -- a couple times a month at its North American boutiques.

Frederic de Narp, CEO and president of Cartier North America, said the largest bill tallied by a customer on a single visit last year topped $11 million.

Bulgari also reports that single purchases in the millions of dollars are becoming more common in the States.

''Whether it's a handbag, shoe, or watch,'' said Kelly Bensimon, founding editor of Elle Accessories, ``the price of keeping up has gone up.''

 

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