Forget the early weight gain known as the “Quarantine 15,” or the surge in floppy-eared pandemic pup adoptions—the newest COVID-19 trend is all about designer duds and flashy cars, and it comes with a hefty price tag. Call it revenge spending, or call it a case of yolo (an anagram for “you only live once”), but luxury goods are reporting blockbuster sales despite ongoing supply-chain snares, surging inflation, and global uncertainty due to the pandemic.
Last week, the fine jeweler Cartier reported a 30% increase in sales during the last three months of 2021 compared to the last quarter of 2020, while Italian fashion house Prada earned 8% more this year than pre-pandemic sales in 2019. Louis Vuitton, Dior, and BMW all have released earlier-than-expected reports in mid-January boasting sales that have far surpassed those in 2020, and even outpaced pre-pandemic sales. So why are consumers splashing big bucks on ultra-luxury goods?
“In the early days of the pandemic, the government did a great job of supporting disposable income, but even without lockdowns a lot of people were avoiding using face-to-face services. Thus spending on restaurants, entertainment, and travel dropped like a rock,” says William Dickens, professor of economics and public policy at Northeastern. “With disposable income holding up, that left people with lots of money to spend on things such as manufactured goods. Particularly things that could be bought without going out, stuff from the internet,” Dickens says.
