The Yuppies Are Back

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Don't look now, but the mass-elite customer is coming back. If three times is a trend, then we definitely have a trend of brands catering to high-end and aspiring consumers reporting impressive numbers.

On Wednesday, Polo Ralph Lauren reported that third quarter revenues rose 24 percent. Yes, sales in Asia were up. But the firm said "higher domestic and European shipments for our apparel products and increased domestic accessories shipments were the largest contributors to growth" in its wholesale sector

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BMW this week reported that it sold 18,656 cars in the U.S. in January 2011, up 21 percent from January 2010.

And where were the BMW owners driving? Why, to the Whole Foods, of course. On Wednesday, Whole Foods noted that ... sales were up 14 percent for the quarter, and identical-store sales were up 9.1 percent. Not even food inflation could deflate Whole Foods's earnings soufflé: EBIDTA (earnings before interest, taxes, depreciation and amortization) was up 26 percent from the prior-year quarter.

The current expansion has entered its seventh quarter, and the pace of growth is accelerating. But these businesses are growing much more rapidly than the overall economy. It's common to speak of a two-speed recovery: the U.S. vs. emerging markets; business vs. consumers; Wall Street vs. Main Street; exporters vs. purely domestic companies; and comparatively rich vs. comparatively poor. Call them Bobos, Yuppies, elites, swells, toffs, or snobs. Just don't call them frugal anymore.

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High-earners ... benefited disproportionately from the policies and trajectory of this recovery. It's always been the case that it's better to have more money than to have less, and to have more education than to have less. But this has been particularly true in the past two years.

Consider the job market ... In January ... the unemployment rate for those with a bachelor's degree or higher — about one third of the workforce — was just 4.2 percent (compared with 9.0 percent overall). That's down from 4.8 percent a year ago. While that is still an elevated level, the job market is far more welcoming to the college-educated than to other workers.

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The willingness of consumers to spend relies in part on the value of their homes, the performance of investments, and the ability to restructure and repair balance sheets. And here, again, the elite have experienced a rapid recovery.

Consider how the policy response has been geared toward inspiring confidence in the haves vs. the have nots. The bank bailouts and direct support of Wall Street helped those at the very top of the income scale, the type whose chefs shop at Whole Foods.

But the broader policies — reducing borrowing costs, allowing Fannie Mae and Freddie Mac to increase the size of mortgages they'll guarantee — have benefited the near-rich as well.

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Bernanke & Co. have pursued an asset-rich strategy: try to make those who already have assets, whether they are corporations or individuals, feel more rich and they'll be willing to spend more.

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Guess who benefits disproportionately from a rise in the stock market? The Investment Company Institute Fact Book notes that, among households making $100,000 or more, 77 percent have mutual funds vs. only 10 percent of those making less than $25,000.

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In the past year, then, people who have — have college educations, have jobs, have stocks, have decent credit, and have expensive homes with equity — have repaired their balance sheets and seen their portfolios reflate. Now they're shucking off their frugality fatigue and propelling higher growth in the luxury and near-luxury brands.

http://finance.yahoo.com/news/The-Yuppies-Are-Back-dg-2914506094.html

[TBoneTX 46,116]

I'll consider buying Polo Ralph Lauren stuff in the resale shops only. Trouble is, it's generally of poorer fit, quality, and design than are so-called "lesser" brands.

[one...two...tree 2,762]

Elitism is never out of fashion.

[Obama 2012 1,714]

Ralph Lauren quality isn't 'that' great in clothing.... It's more of a namesake, especially when you see what it costs to make a single shirt vs. what they sell it for.

I'm quite happy with brands like Eddie Bauer and Izod. Both some of the best quality that seems to last forever.

[Ban Hammer 13,545]

Elitism is never out of fashion.

neither is granola.

[one...two...tree 2,762]

neither is granola.

I see what you're doing there. Consumer elitism isn't a political ideology, Chuckster. However, buying your shirts at Walmart is.

[Ban Hammer 13,545]

I see what you're doing there. Consumer elitism isn't a political ideology, Chuckster. However, buying your shirts at Walmart is.

where i buy my shirts at you can't.

[one...two...tree 2,762]

where i buy my shirts at you can't.

Spoken like a true elitist. Ya big snob.

[Jenn! 918]

Wasn't Ralph Lauren on BY's list of ghetto clothing?

[Ban Hammer 13,545]

Spoken like a true elitist. Ya big snob.

you can do the same. you're still young.

[Krikit 1,165]

The yuppies are back? I didn't know we'd left.

[Ban Hammer 13,545]

The yuppies are back? I didn't know we'd left.

careful, you might be called an elitist.

[^_^ 5,021]

This article tells me one thing very clearly. I need to up my game because I don't wear RL, I don't drive a BMW and I shop at Whole Foods no more than 2-3 times a year.

[Amby 490]

Does a Porsche count?

[Rebecca Jo 1,962]

Does a Porsche count?

For some reason, I always think of a Porsche belonging to some guy in his late 40's or early 50's.