What Happens if the Boom Goes Bust?

As a luxury retailer, does it matter to you if the boom goes bust? Instinct says “of course,” but going by recent economic history, perhaps it matters less than you think. Remember the Oct. 19, 1987, crash, when the stock market plunged 23%, wiping out a half trillion dollars in capital? “Black Monday” was an unnerving experience, all right, but the market fully rebounded within 15 months and the overall impact on high-end jewelry sales was negligible. In fact, Tiffany & Co. reported fourth-quarter ’87 sales were 20% higher than the previous year, while same-store sales grew 23% in 1987 and 20% in 1988. Neiman Marcus, which serves roughly the same clientele with clothing, jewelry and other luxury goods, saw a significant slowdown in buying for a week after Black Monday, but sales soon recovered. Henri Barguirdjian, currently president and CEO of Van Cleef & Arpels,

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