Business Tech, 06 March 2016

People who have a lot of money like to spend that money – and they like to invest in everything from classic cars to stamps and coins.

According to property group Knight Frank’s latest Wealth Report for 2016, the world’s ultra-high net worth individuals (worth more than $30 million) have increased spending on luxury goods by over 200% in the past decade.

Not all asset classes have grown equally, however, with super wealthy people finding favour with big buys such as classic cars, wines, coins and art over things like furniture, Chinese ceramics and diamonds.

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Sales of super-yachts rose 40% last year despite number of millionaires and ultra rich falling, according to wealth report

The global super rich continued to splash out on super-yachts and luxury goods last year, despite a decline in their overall wealth in the wake of financial market turmoil.

According to the latest wealth report from estate agents Knight Frank, published on Wednesday, sales of super-yachts – boats longer than 24 metres – soared 40% in 2015, with the rich roaring off to ever more far-flung destinations, such as the Antarctic and outposts in Asia, rather than their traditional ports of call in the Mediterranean and the Caribbean.

The number of ultra rich – people with $30m (£22m) or more in assets – fell 3% last year. There are now 187,500 with assets in excess of that benchmark, down from from 193,100 in 2014. This was the first decline since the financial crisis. Between them, they controlled $19.3tn in assets, down from $22tn the year before. This reflected the rollercoaster global stock markets, the slump in commodity prices and slowing economic growth in China and other countries.

The number of dollar millionaires around the globe also fell from 13.6 million in 2014 to 13.3 million last year. Together, they hold assets worth $66tn – more than the value of all global shares added together.

But the report believes that the decline in the number of millionaires is just a blip, and predicts that by 2025, there will be more than 18 million of them.

So-called investments of passion such as art, cars, stamps and jewellery remain popular among the super rich. Knight Frank’s art index rose by a muted 4% last year, but a number of records were set in the world’s auction houses.

Pablo Picasso’s Les Femmes d’Alger notched up a new record for a painting sold at auction after fetching more than $179m, while Reclining Nude by Amedeo Modigliani went under the hammer for $170m to a buyer from Shanghai.

Classic cars increased by 17% in value last year, while coins went up 13%. Knight Frank’s overall luxury investment index rose 7% in 2015. This compares with a 5% drop in the value of London’s leading share index, the FTSE 100, and a rise of just 1% forprime London residential property.

Andrew Shirley, the editor of the wealth report, said: “Although no classic car managed to beat the record set by Bonhams in 2014 when it auctioned a 1962 Ferrari 250 GTO Berlinetta for $38m, eight of the 25 cars ever to have sold for over $10m at auction went under the hammer in 2015.”

Wine and luxury watches both posted 5% increases. A Hong Kong-based billionaire set a record for a gem or piece of jewellery when he paid $48.4m for the Blue Moon, a rare fancy vivid blue diamond auctioned by Sotheby’s in Geneva in November. The day before, he paid $28.5m for a vivid pink diamond sold by Christie’s.

The value of investment-grade Bordeaux wines slumped as a result of a sharp fall in demand from China, but they have now started to recover, said Nick Martin of Wine Owners.

Even furniture values, which generally had a poor year, set a new auction record for a living maker when the Lockheed Lounge sofa by the Australian designer Marc Newson sold for £2.4m in April 2015.

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A combination of increased demand for high-end brands and low-cost tourism is expected to drive the global duty-free retail market until 2019, according to a new report by Technavio.

Due to high consumer demand and affordable travel rates, the duty-free retail sector is expected to reach approximately $98 billion in revenue by 2019. As such, Technavio’s “Global Duty-Free Retailing Market 2015-2019” examines market growth by revenue and tracks emerging trends for the sector to illustrate why having a duty-free strategy can be profitable for global luxury brands.

“The global duty-free retailing market has been growing significantly because of rising consumption by the growing middle class who are traveling abroad,” said Arushi Thakur, analyst at Technavio. “The fast growth in adoption of luxury goods among developing countries such as China and Brazil increased the global duty-free retailing market to $64.83 billion in 2014 from $60 billion in the previous year.

“Among all the countries, South Korea’s Incheon Airport reported a record sales of $2 billion in 2014,” she said. “The global duty-free retailing market is expected to grow at a CAGR of 8.57 percent for the period 2015-2019.”

(...)

The duty-free market has five distinctive retailers accounting for 49.7 percent of the total revenue. LVMH-owned DFS is the largest duty-free retailer, offering more than 700 of the world’s leading brands, and had a 13.1 percent revenue share of the industry in 2014.

Categories available at duty-free shops such as DFS include fashion accessories and hard luxury, fragrance and cosmetics, wine and spirits, tobacco and confectionery and fine foods. The fashion accessories and hard luxury category offers the most products, at 32.10 percent of total offerings, while perfume and cosmetics accounts for 29.21 percent of duty-free retail items.

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GENEVE, 1er mars (Reuters) - BMW entend rester le leader mondial des voitures de luxe devant ses compatriotes Mercedes-Benz et Audi, a déclaré mardi le président du directoire du constructeur allemand au salon de Genève.

"Notre objectif est d'être numéro un", a dit Harald Krüger, ajoutant s'attendre à une légère progression des ventes de BMW cette année en raison de sa croissance en Chine et en Europe.

Le lancement d'une version longue du BMW X1 en Chine devrait contribuer à une hausse des ventes dans ce pays au second semestre, ce qui devrait se traduire par une légère croissance des ventes en Chine sur l'ensemble de l'année, a déclaré Harald Krüger.

Les ventes en Europe devraient pour leur part augmenter de 5% à 10%, a-t-il poursuivi.

Les nouvelles règles européennes sur les émissions polluantes vont contraindre BMW à effectuer d'importants investissements, qui se chiffreront en centaines de millions d'euros, a dit le président du directoire du constructeur bavarois.

BMW est engagé dans des discussions constructives avec le gouvernement allemand sur les moyens de développer les ventes de véhicules électriques et la prochaine séance de négociations se déroulera d'ici fin avril, a-t-il ajouté.

Interrogé au sujet de l'éventualité d'une sortie de la Grande-Bretagne de l'Union européenne, Harald Krüger a répondu: "De manière générale, nous n'aimons pas effectuer des investissements dans des circonstances incertaines." Il a souligné que ces propos ne devaient pas être interprétés comme une indication sur la stratégie de BMW en Grande-Bretagne. (Edward Taylor; Bertrand Boucey pour le service français, édité par Véronique Tison)

From Premium beauty news,  extract of the Research on Trends lead by Les Persiennes Consulting, by Nilufar Khalessi

After 35 years of isolation, Iran is making a comeback on the international stage. This little-known country, which already represents 29% of the beauty market in the Middle East, is often described as the ‘new eldorado’ for cosmetics brands. Nilufar Khalessi, the French-Persian Founder of trends and consulting agency Les Persiennes Consulting, has taken a look at this country for a first qualitative, forward-looking deciphering. She gave Premium Beauty News an overview of the study The New Faces Of Iran - Fashion, Beauty & Paradoxes, to be presented next May.

With a population of 80 million inhabitants, including 55% under 30, Iran is a growth-driving, dynamic market. The fact that international sanctions have been lifted and that the economic situation should therefore improve have made it even more attractive. But this country is not without its own paradoxes.

For a thorough understanding of unknown Persia’s trends and lifestyles, the study The New Faces Of Iran - Fashion, Beauty & Paradoxes first describes the historical, geographical, cultural, and social pillars that define the Persian civilization. As a tremendous cultural and historical cradle, the country that became an Islamic Republic after the 1979 Revolution, mainly defines itself according to its ancient origins. “It is a Muslim country, but people consider themselves Persians and Iranians above all. It is essential to understand this subtlety,” Nilufar Khalessi explains.

Despite an embargo that lasted for decades, the major cities of Iran have been experiencing much progress, driven by the dynamics of a 2.0, highly-connected, Western-oriented young generation. However, the choices made by these young people show they will not let foreign countries dictate their consumption habits, as they actually prefer national goods. “Young Iranians deliberately have not completely assimilated the Western culture, although they do know and master its codes, since they have integrated them. And we would make a mistake if we tried to force them into a mould,” Nilufar Khalessi adds.

Iranian women, a status apart
As they are extremely educated – so is most of the population in large cities - Iranian women enjoy an important part in society. They are very present in institutions and play a crucial role, whether in the family or society. “The status of women is different from what can be observed in many Arab countries. Even the way they wear their veils is more lax, as it does not completely frame their faces and allows for much femininity to be seen,” Nilufar Khalessi explains.

The study used portraits of women from Isfahan, Tehran, and Shiraz to shape the contours of a generation that has been playing with the paradox between their public lives, as they comply with the established Islamic laws, and their private lives, subverting these laws for more freedom, whether in terms of beauty or fashion. Women are deeply committed to this young generation’s active and creative development, in all artistic fields.

The face at the core of femininity
“Iranian women hardly go out without makeup on, because the relationship with aesthetics is strongly developed,” Nilufar Khalessi affirms. Therefore, it is essential for them to beautify their eyes, eyebrows, lips, and hair. “In the city, the veil does not completely frame women’s faces. It is a real distinguishing feature: half the hair is uncovered, so women work a lot on it, often dying it blonde, and they are not keen on naturalness”. Facial care focuses on “zero defect” choices to fight against pollution-related problems, acne, or oily skins. In addition, the study highlights the very strong relationship with plastic surgery, in particular rhinoplasty.

“They choose L’Oréal, Dior, Lancôme, and many other well-established brands for their daily consumption, although they also buy other products by interesting local brands to be studied,” Nilufar Khalessi concludes.

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This article pinpoints two important facts : American want stronger regulation of cosmetics in the US in order to protect beauty customers in their personal care but this also highlights a willingness for more protectionism of american skincare business in the US.

WASHINGTON – A survey released today by the Mellman Group and American Viewpoint shows that voters overwhelmingly support stricter regulation of the chemical ingredients used in their personal care products.

More specifically:  

94 percent believe that companies should be required to notify the government when their products injure consumers.
87 percent believe federal officials should have the authority to recall personal care products found to contain toxic chemicals.
87 percent want stricter regulation of personal care products.
74 percent are less likely to purchase products from companies that fight regulation.
 
Almost two-thirds of likely voters want their cosmetics to be safe.
 
A third are under the mistaken impression that the government has cleared most of the chemicals used in personal care products. 
 
“These poll results show that Americans want to ensure that the personal care products they use each and every day are safe,” said Scott Faber, vice president of government affairs at EWG. “Few consumers have any idea how minimal the current regulation of chemicals is. No other class of products is so widely used, and in such large quantities, with so few safeguards.”

There is very little regulation of the $60 billion-a-year personal care products industry. The federal Food, Drug, and Cosmetics Act, which was supposed to guarantee the safety of cosmetics, is nearly 80 years old and falls far short of ensuring that cosmetics are safe.

Sens. Dianne Feinstein (D-Calif.) and Susan Collins (R-Maine) have introduced a bipartisan bill to close this regulatory gap. It would require companies to ensure that their products are safe before putting them on the market and give the Food and Drug Administration the tools it needs to protect the public. The legislation, titled the Personal Care Products Safety Act, would strengthen federal regulations that have remained largely unchanged since 1938, requiring the FDA to review five potentially risky cosmetics ingredients each year and giving it the agency authority to ban or restrict ingredients based on these assessments.

This is the first time that federal legislation on this issue has earned the support of both consumer and industry groups including the Personal Care Products Council, leading cosmetic companies and major public health organizations.

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