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- 6 Dec 2010
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Miami's Exposé of the Art Oligarchs & the New American Leisure Class

The Mood Among the Art Oligarchs at Art Basel Miami Beach


‘High Definition’ by Luiz Zerbini of the Fortes Vilaça Gallery of Sao Paulo

Gallerists and art collectors packed up their wares and wallets yesterday as this year’s edition of Art Basel Miami Beach came to a close. As the preeminent art marketplace in the US and one of the most important art shows in the world, the event inevitably attracts the attention of all sorts of people keen on predicting the next big aesthetic and buying trends. But beyond the idiosyncratic realm of art, this sprawling spectacle is also a place to gauge the mood and motivations of luxury consumers in a very intimate social setting.

Perhaps not surprisingly, many observers made a tenuous link between visual art trends and the temperature of the market., for instance, called this edition the “gilded age of anxiety” where there were “hints of bling” like Damien Hirst’s gold-plated pill cabinets at the White Cube gallery’s booth or where there was a “humble material transformed into a precious object” such as a giant cubic sculpture by Alicia Kwade from the Berlin gallery Johann Koenig which gilded bronze casts of coal slabs used to heat ordinary German homes.


‘Kohle (7T Rekord)’ by Alicia Kwade of the Johann Koening Gallery

If artists really are in tune with (and indeed creating according to) the vibes they get from the market they are ‘serving’, then the message – according to author Sarah Douglas at least – seems to be that such luxury consumers have begun to acquire an anxious but growing taste for more extravagant purchases. And perhaps more telling is that while they are responding positively to the irony about consumption and wealth embedded in these works, they are not yet prepared to let their purse strings loose like they did during the art market’s boom years.

Indeed, a later report in the week by Douglas included a host of comments from dealers and collectors which supported the conclusion that there was a greater sense of optimism and confidence than in recent years. A sweep of other reliable sources, such as Guy Trebay from the New York Times revealed a similar picture.

 Like the luxury apparel, auto and jewellery sectors before it, the art market is now consolidating into the hands of the few 

The Art Newspaper‘s roving reporters focused on the symbolic power of Art Basel Miami Beach to showcase the rise of the mega-gallery – those with locations around the world like the Gagosian and others with more than one location in a single city such as Thaddaeus Ropac in Salzburg. Like the luxury apparel, auto and jewellery sectors before it, the art market is now consolidating into the hands of a few gallerists as they face increased competition from curated sales of multi-national auction houses.


American artist Julian Schnabel in front of a Maybach for the announcement of their partnership

With Vogue, Cartier, LVMH, Bally, NetJets and Fendi among the luxury brands present last week to use the event as a marketing opportunity, it is little wonder that luxury automaker Maybach also decided to use it as a platform to make several important sponsorship announcements involving The Musée de Louvre, MOCA and artists Tony Cragg and Julian Schnabel.

After all, there aren’t many events around the world where luxury brand executives can rub shoulders with billionaires so eager to shop that they are literally running from one vendor to the next on opening night.

The Latest Wealthy American Lifestyle & Demographic Data


A 2009 show home displayed by the US’s National Association of Home Builders in Las Vegas

At times of great economic and social flux, market researchers go into overdrive to survey their target consumers with the hopes of uncovering even the smallest of behavioural or lifestyle changes which might offer clues for future business opportunities — especially since the latest crisis made every insight valuable no matter how seemingly small.

The luxury industry is of course no different, of course. But in recent years market research has become much more readily available and often more hotly contested, as last month’s feisty duel between Ron Kurtz of the American Affluence Research Center and Pam Danziger, president of Unity Marketing revealed in the LS Opinions section.

 A decline in marriage will have a direct and potentially negative impact on the prospects for luxury marketers in the future 

The latest bit of demographic minutiae to be presented by Danziger which she believes could affect the luxury market in the not too distant future follows the publication of findings by the Pew Research Center of a widening “marriage gap” and an overall decline in marriage among the younger generation.

Danziger put the following spin on it for the luxury industry:"The findings of the Pew study will have a direct and potentially negative impact on the prospects for luxury marketers in the future,” she said.

“Among the affluent segment of the population, a number of demographic factors like marriage are aligned with increased levels of wealth. That young people are delaying marriage or foregoing it altogether means fewer households will have the spending power to afford luxuries over the long term. That marriages rates are declining among certain ethnic and educational groups ultimately can limit their social mobility up the rungs to affluence."


Poolside at the Hotel Sorella, Houston, Texas

Then, on Thursday, the webinar which Danziger conducted featuring Unity Marketing’s recently released 3Q2010 Luxury Tracking Study found that (according to Apparel News), “on average, luxury consumers spent $2,781 on luxury clothing in the third quarter of 2010—an increase of 65.9 percent over the previous year. But spending on luxury goods is showing signs of slowing. Between the second and third quarters of 2010, average spending declined by 38.9 percent.” The data was based on interviews of luxury shoppers whose average household income was $298,300 and was conducted in mid-October.

In other data related news, over at the Wall Street Journal , Robert Frank’s The Wealth Report column once again provided some fascinating figures which puts the evolution of the luxury industry into some long term perspective. Frank cited two studies, in both the US and Canada, about the sources of income of what would once be defined as “the leisure class”.

The Canadian study demonstrated that the top 1% of earners now get more than two-thirds of their total income from salaries – rather than capital gains, inheritance or assets related wealth. In a similar American study, salary was found to make up for 56% of the income for the top 1% of earners.

These numbers suggest an entirely different consumer mindset from just one generation earlier, when the wealthy derived much less of their income from salary directly linked to work. Frank’s canny conclusion? “Today, even the true leisure class–or what’s left of them –want to be seen as productive,” he wrote.