Luxury retail defies slump by selling things only money can buy

Tony Gosling tony at
Sun Jun 24 22:50:24 BST 2012

Cameron family fortune made in tax havens

Luxury retail defies the slump by selling the things only money can buy
 From historic hotels to private jet showrooms, 
the business of catering to the super-rich is still booming
Terry Macalister and Zoe Wood - The Observer, Sunday 24 June 2012
Want to fly a fighter jet at 500 miles an hour 
just above the ocean off Cape Town, drink 
champagne inside a glacier halfway up a Swiss 
mountain or host a five-a-side football game on 
the deck of a battleship – complete with England 
star – for your child's birthday?
The price may be prohibitive for most – £5,000, 
say, for the Top Gun experience alone – but 
business is booming for Red Carpet Enterprises, 
the London-based events company that aims to 
tickle the fancy of the most jaded super-rich.
Red Carpet is not alone in surfing the waves of 
cash that are still washing round those parts of 
the British capital that are relatively immune to 
double dip recessions, eurozone crises and cuts in public sector spending.
Italian luxury brand Bulgari has just opened in 
London what it claims is the first newly-built 
five-star hotel for 40 years, where for £700 per 
night you can apparently enjoy an "uncompromising sense of excellence".
Around the corner in the same part of 
Knightsbridge, The Jet Business has recently 
opened what it claims is the world's first 
executive plane salesroom, where you can choose 
your new aircraft inside a full-size, mocked up interior of an Airbus.
And all of this is a stone's throw from One Hyde 
Park, the "oligarch silo" where a penthouse suite 
can set you back £140m, but where you get 
SAS-trained security staff – as well as the ubiquitous gold taps – thrown in.
Last week the annual World Wealth Report produced 
by Capgemini and RBC Wealth Management said that 
the global population of millionaires stood at 11 
million – an elite club whose finances were 
riding out the financial storm, with their assets 
declining by less than 2% to $42 trillion 
(£27tn). If there was a surprise, it was only 
that the Asia Pacific super-rich outnumbered 
those in north America for the first time in 2011.
A recent luxury-goods market study by Boston 
Consulting Group predicted that spending on 
yachts, designer frocks and safaris would hit 
nearly £1bn this year. But the study identified a 
shift in spending patterns among the wealthy, who 
are increasingly keen to buy luxury "experiences" 
rather than add to their wardrobes and car 
collections. More than half of the £900m spent on 
luxury goods last year bought one-of-a-kind 
holiday packages or stays in exclusive resorts 
such as luxury goods group LVMH's hideaway in the Maldives.
"It's all about storytelling," says Robert 
Gaymer-Jones, chief executive of the Sofitel 
chain, which, following several years of 
investment by French owner Accor, has been recast 
as a luxury brand complete with Hermès toiletries 
in the en suites. He points to hotels such as the 
Sofitel Legend Old Cataract in the Nubian desert, 
where Agatha Christie wrote Death on the Nile. 
Visitors there, he says, feel like they are going 
back in time: "Our clients don't want an ordinary experience."
Making the dreams of the super-rich come true has 
proved to be a successful second career for Alan 
Rogers, a former general manager of Luton 
Airport, who now lives on a 17-acre estate in the 
Cotswolds complete with its own lake and manor 
house. The founder of Red Carpet says he has 
fewer corporate clients these days, as executives 
– particularly those at banks – are frightened of 
being accused of excess when many of their 
customers are struggling financially. But the 
market for the "high net-worth wealthy" is still 
the same, he reports, and he says he has never 
been asked for an exotic event or trip that he has been unable to fulfil.
"We organised for people to launch their own 
rocket at Kiruna in northern Sweden, and held a 
champagne reception on the helipad of the 
Peninsula Bangkok. If it's not physically 
impossible, or illegal, we can do it."
Steve Varsano, founder of The Jet Business, has 
the same message. He spent a fortune decking out 
his sales office off Hyde Park, but will fly 
anywhere at the drop of a hat to sell planes that 
cost anything from less than $18m to over $80m. 
"Business at the top end of the market is 
excellent, extremely strong," he reports, with 
Russian oil executives, Saudi princes and 
American technology entrepreneurs always game for a new "time machine".
Nothing is too much trouble: the Arab buyers may 
want seats that swivel to face Mecca, while the 
Chinese may want silk carpets and the Brits a 
replica of an old country pub. "Certainly what we 
are seeing is the buying of bigger and 
longer-range aircraft so that the guy in Mongolia 
can do his business with the oil guy in Nigeria," says Varsano.
The biggest growth in demand, perhaps 
unsurprisingly comes from China – up some 800% 
since 2003 – but there are still only 150 
executive jets registered in China and 1,000 in 
the whole of Asia compared with 450 in England and 11,000 in America.
Jets are now advertised in numerous magazines for 
the super-rich such as the Robb Report and the 
new periodical Elephant Lifestyle – slogan: "Hit 
Big, Live Large" – which claims to be the "luxury 
living magazine for energy tycoons". It offers 
yachts, sports cars and even islands – all priced neatly in barrels of oil.
Private Islands, a luxury estate agent, says that 
business slowed dramatically during the recession 
but has picked up strongly over the last year. It 
is currently marketing the $18m "Cebaco private 
biosphere" off the coast of Panama, which boasts 
"palm-fringed coves with sandy beaches, cascading 
waterfalls and dramatic rock formations".
"We have seen an increase in inquiries from 
potential buyers as well as a healthy number of 
new islands coming on the market," says chief 
executive Chris Krolow, who adds that he has a 
number of islands in the $10m-plus range under 
contract. "The general feeling is that island 
prices have finally bottomed out and investors 
are feeling that this is a good time to buy. This 
is a very exciting time in the island world."

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