Boeing will take a nearly $5 billion charge in the second quarter to compensate 737 Max customers as the planes remain grounded.Airlinesread more
Earlier, Williams delivered a speech at the annual meeting of the Central Bank Research Association in which he said, "It's better to take preventative measures than to wait...The Fedread more
Stocks in Asia Pacific traded higher on Friday morning, as comments from a U.S. Federal Reserve official led to rising expectations the central bank could ease monetary policy...Asia Marketsread more
The base version of the sports car will punch out 495 horsepower, 40 more than the seventh-generation car and enough to launch it from 0 to 60 in "less than three seconds"...Autosread more
A man suspected of torching Kyoto Animation reportedly doused the studio's entrance with what appeared to be petrol and set it ablaze on Thursday.Asia Newsread more
Trump said the USS Boxer destroyed Iran's drone in the Strait of Hormuz on Thursday in a "defensive action."Politicsread more
Microsoft beat on top and bottom lines, and guidance was just ahead of expectations, but the company's Azure growth is slowing down.Technologyread more
"We've seen Netflix stumble before, especially maybe after a price hike, but not quite like this," Jim Cramer says.Mad Money with Jim Cramerread more
They also voted to absolve themselves, their party and the voters who elected them – like the ones Trump inspired to chant "send her back" at a rally Wednesday in North...Politicsread more
The computing center launched by BMW and Tencent will start operations by the end of the year. It will provide cars with data-crunching capabilities to help them drive...Technologyread more
See which stocks are posting big moves after the bell on July 18.Market Insiderread more
In Houston, Chanel's new 5,000 square-foot galleria is styled after Coco Chanel's Baroque-inspired apartment, with bronze screens, an antique fireplace and a chandeliered shoe salon.
Yves Saint Laurent's 10,000-square-foot flagship women's store on Rodeo Drive, in Beverly Hills, Calif., its biggest, features white marble and polished brass with a discreet back-alley entrance for celebrities.
And in downtown Manhattan, Hermès, Salvatore Ferragamo and Paul Smith are set to open locations at Brookfield Place, a $300 million luxurious redevelopment of the World Financial Center on the Hudson waterfront, with a glass pavilion and European-themed gourmet market.
Purveyors of high-end luxury goods are chasing millionaires in the United States, as upper-income spending falters in Europe and in the emerging markets once considered luxury's promised land. And the wealth, they say, is not just confined to the American coasts.
Fast-growing industries, like technology and energy, are transforming cities like Houston, Dallas and San Jose, Calif., into some of the densest aggregations of wealth in the world. Since 2012, the number of high-net-worth individuals has jumped as much as 20 percent in Dallas and 18 percent in Houston, according to a Capgemini and RBC Wealth Management tally.
Propelled by market gains and a skewed economic recovery, the United States' share of the world's superrich is rebounding. Since mid-2013, the number of millionaires in the United States has grown by 1.6 million, by far the biggest increase in the world and dwarfing the 90,000 Chinese who crossed the million-dollar mark since then, Credit Suisse estimates.
In 2014, Americans with net wealth of more than $50 million outnumbered their Chinese counterparts eight to one. And the United States is set to remain by far the wealthiest country, Credit Suisse says, with aggregate wealth of over $114 trillion in 2019.
Luxury retailers now see America's ultrarich, over Hong Kong magnates or Russian moguls, as their biggest drivers of growth,
"If you look in the past year, the United States has been at the top of our investment plans," said Michele Norsa, chief executive of Salvatore Ferragamo, the Italian luxury shoemaker.
"There are opportunities on the West Coast, with the tech industry there and Asian tourism," Mr. Norsa said. "There are opportunities in Miami, which is becoming important as a window to Latin America. We see opportunities not just this year, but in the long term."
The strong luxury spending is welcome news for an industry grappling with slowing growth in Europe and in emerging markets that once seemed to offer the most potential for growth, but are now hit by weaker asset prices, currency pressures and economic and political turmoil.4
Luxury sales in China, especially, have slowed in the face of a crackdown on bribery, and probably led to the first decline in luxury sales there in over a decade, according to Bain, the consultancy. A weak ruble and low consumer confidence have taken a toll on spending by another group of big luxury spenders: moneyed Russians.
In the United States, spending on personal luxury goods rose a steady 5 percent last year to about $73 billion, Bain estimates, compared with negative growth in previous juggernauts like China and Russia.
And this week's report by LVMH Moët Hennessy Louis Vuitton, the world's largest luxury-goods maker, underscored the market shifts. The company said that annual sales in Asia dropped 6 percent in 2014 from the previous year because of the ailing Chinese luxury market. Sales in Europe grew a tepid 3 percent. But its bright spot was the United States, where annual revenue jumped 8 percent from the previous year.
"There's a whole new generation of 30- and 40-year-olds making millions of dollars a year in hedge funds and technology and real estate," said David Friedman, president of the wealth consultancy Wealth-X.
Milton Troche, 29, whose father runs a textile company in New York, said business was looking up and that he felt flush enough to upgrade his wardrobe this year. "I wanted the larger buckle," Mr. Troche said, stepping out with his $450 belt from Ferragamo's flagship store on Fifth Avenue. "You can wear a T-shirt with it, but you still get the girls."
Much of the growing wealth in America comes from equity markets that have performed well, adding to the wealth of upper-income Americans who are most likely invested in stocks. In the United States, the rich also have relatively more of their money left over to spend, because of lower top marginal income tax rates.2
And across America, highly skilled, high-income immigrants, of which the United States continues to attract a disproportionate share, are driving high-end consumption. The world's brain drain — and America's brain gain — is transferring more wealth and more luxury spending to America, experts said.
"The U.S. is helped by wealthy immigrant flows, giving additional impulse to the luxury market in New York, Miami, even university cities like Boston," said Claudia D'Arpizio, an expert on luxury spending at Bain.
International tourism to the United States, which has grown steadily to an estimated 74 million visitors last year, has also bolstered luxury spending, experts say.
Labels like Yves Saint Laurent are seeing how the American turn is paying off. The company's Paris-based parent, Kering, reported in October that luxury sales rose 3.5 percent for the third quarter, compared with a year earlier, to 1.67 billion euros ($1.91 billion), led by a 12 percent jump in North American sales.
Hermès, the French luxury brand, is increasing the size of its stores in Dallas, Houston, Miami, Boston and Seattle, and plans a new boutique in Palo Alto, Calif. Hermès is also set to open a location at Brookfield Place, its third in Manhattan, which will be a perfumery that sells Hermès fragrances, said Robert Chavez, president of Hermès U.S.
"Before, growth was really focused on the BRICS," he said, referring to the five major emerging economies of Brazil, Russia, India, China and South Africa. "But the world changes constantly, and the U.S. is now a strong foundation."
No place seems to say new luxury in America more than Manhattan. New York City spent more than $25.5 billion on personal luxury goods last year, more than the whole of Japan, the second-biggest market, Bain estimates. And luxury's focus is shifting to downtown Manhattan, once the domain of harried commuters and office workers. The Westfield Group is set to open a second luxury mall in the neighborhood later this year.
"It's a market unto itself, and it's got tremendous growth," said Gerald L. Storch, chief executive of Hudson's Bay, the parent company of Saks Fifth Avenue, which is set to open a store at Brookfield Place in the spring.
Not all luxury retailers are doing well, however. The jewelry chain Tiffany cut its annual forecast last month, citing sluggish November and December sales.
And economists at Morgan Stanley wrote in a recent report that rapid year-over-year growth in luxury spending might simply be unsustainable.
"How many personal aircraft can one buy?" they wrote.
The weakened euro and yen also threaten to crimp tourist traffic and spending, some analysts say. (But in a sign of the strength of the American luxury consumer, European luxury brands have not been slashing prices.)
Still, Brookfield's clientele is not easily affected by exchange rates, said the developer's chief executive, Dennis Friedrich. Brookfield invested $300 million to revamp the former World Financial Center.
"The change in exchange rates won't dissuade them," Mr. Friedrich said. "We serve a very wealthy demographic."