We’ve covered the concept of fractional ownership in the past, now Portfolio provides a round up of how this concept and luxury rentals are helping the luxury sector during the economic downturn. Portfolio reports:
These descendants of the shops that rented designer formalwear for special occasions include rental and fractional-ownership businesses offering everything from destination vacations to yachts, jets, and collectible cars. Industry watchers believe such businesses may benefit from the pain retailers are beginning to feel as gyrations in the stock and housing market cause even well-heeled customers to pull back on spending.
The economic downturn “will focus the minds of people on what the alternatives are to full ownership and help accelerate the growth of the industry,” says Milton Pedraza, chief executive of the Luxury Institute, a New York-based research firm. “I think long-term, people will realize that instead of owning an asset you can just buy the experience.”
Michele Krause, founder of Bling Yourself, says her customer base has grown about 40 percent a month since she launched her jewelry-rental business last July, and that the economic slowdown has had “no impact” on the number of new customers or rentals. Another such enterprise, From Bags to Riches, which rents and sells handbags, is even expanding, preparing to launch spinoffs in Canada, South Africa, and the United Kingdom within the next three months.
