LONDON/PARIS : While millions are fretting whether they can afford another $1,000 on energy this year, others are still splashing out on $10,000 Hermes handbags as soaring prices leave wealthier people relatively unscathed.\r\rA string of consumer companies, from spirits group Diageo to Birkin bag maker Hermes, have this week reported they're making money from their most expensive products and expect to continue to do so, despite a cost of living crisis that shows no signs of abating.\r\rSharply higher interest rates, surging inflation and a prolonged energy crisis are leading to the conclusion that the global economy is headed towards recession.\r\rBut millions of wealthier consumers are still sitting on a cushion of savings built up during the COVID-19 pandemic and keen to treat themselves after two years of restrictions.\r\rHermes reported a record quarterly profit margin on Friday, as sales rose sharply amid strong growth in Europe and the United States, and a rebound in China in June.\r\rChairman Axel Dumas said he saw no sign of a slowdown in any region, even though the company has raised prices 4 per cent this year.\r\rCarmaker Renault also said its turnaround strategy of focusing on selling fewer but more profitable cars was paying off, and upgraded its forecast for full-year margins. The most expensive Renault cars can cost over $100,000.\r\r"The surprising resilience of European consumers can also be seen in the strong results of luxury brands owner, Louis Vuitton, particularly in their fashion and leather goods, such as Fendi and Christian Dior," Rebecca Chesworth, senior equities strategist at investor State Street SPDR ETFs, said.\r\r"Consumers enjoying travel reopening have been boosting sales of wines and spirits."\rSource: CNA
Vikshita Vitthal Gujaran
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