Luxury Consumption Index (LCI) in Free Fall

STEVENS, PA, Oct 31 (MARKET WIRE) --
Luxury consumer confidence as measured by Unity Marketing's Luxury
Consumption Index (LCI) continued its downward trajectory in the third
quarter 2008. The LCI dropped 10.7 points to reach an historic low of
40.3 points, the lowest level ever since Unity started measuring
affluent consumer confidence at the end of 2003.

http://www.unitymarketingonline.com/cms_luxury/uploads/luxury_tracking/sept_2008
index.pdf

"Unity Marketing's most recent survey of luxury consumers, conducted
October 3-8 following the bailout and during the recent stock market
upheaval, shows that affluent consumers' negative feelings about their
economic situation are translating into changes in their shopping
behavior," says Pam Danziger, president of Unity Marketing, a consumer
insights firm that specializes in the luxury consumer mindset. "Since
the middle of 2007, the LCI has been in free fall, dropping more than
half of its value to reach an all time low of 40.3 points at the end of
third quarter 2008. But what is of more importance to luxury marketers
than the decline in the LCI is that luxury consumers are taking action
in response to the current economic crisis."

Luxury consumers are not just expressing an intention to save money --
they are taking action

Among the most important findings in this survey among 1,161 affluent
consumers (average income $210,700; age 43 years; 34 percent male and 66
percent female):

-- Some 56 percent are spending less on luxury now as compared with
twelve months ago.
-- Fifty-four percent expect to spending less on luxury in the next
twelve months.

Danziger says, "Among the changes in their shopping behavior, luxury
consumers are shopping more strategically by looking for sales. They are
trading down to less premium brands. In fine dining, they are choosing
less premium restaurants and dining out less often. And they are simply
staying out of the stores to resist temptation. The latest survey shows
affluent shoppers are being prudent and careful with their money. They
are still indulging in luxuries, but they are being more selective in
what they choose to indulge."

LCI predicts a challenging 4Q2008 for luxury marketers and retailers

Commenting on what the latest survey means in terms of holiday spending in
the fourth quarter, Thomas Bodenberg, Unity Marketing's chief consumer
economist, says, "In taking the pulse of the luxury consumer's mindset,
we don't yet see a turnaround emerging shortly. Their confidence
continues to slide, especially among the over 40-year-old affluents who
make up the largest segment of the luxury consumer market. For this
holiday season, we see affluent shoppers turning more frequently to
mass-market retailers with a high-quality, value-driven image, like
Target, as well as to outlet shopping where luxury brands can be had for
less. The Internet is going to be a vital tool for affluent shoppers this
season, as it supports comparison shopping across the widest range of
retailers in the most efficient manner possible."

Advising luxury marketers on ways to see their way through the current
economic crisis, Bodenberg says, "Due to the decline in the value of the
dollar, now is a good time for luxury goods marketers to target
international consumer segments, especially EU residents and Canadians.

"With affluent consumers watching their pennies, this is also the time for
luxury brands to better understand and use pricing strategies in order
to maximize both profits and sales potential. And they should study
their potential target markets to micro-target discreet customer and
prospect segments to further enhance profitability," Bodenberg advises.

For more information on what the latest Unity Marketing Luxury Tracking
survey found for the third quarter and what it predicts for the vital
fourth quarter holiday season, call Pam Danziger at 717-336-1600 or visit

http://www.unitymarketingonline.com/cms_luxury/luxury/luxury3/Luxury_Tracking_3Q
008.php

About Unity Marketing's Luxury Consumer Tracking Study

These findings are based upon Unity Marketing's quarterly luxury tracking
study which surveyed 1,161 luxury consumers (average income $210,700).

Every quarter Unity Marketing conducts a Luxury Consumer Tracking Study
among 1,000+ luxury consumers. Year end statistics from four tracking
studies are compiled in Unity Marketing's Luxury Report 2008 - Who Buys
Luxury, What They Buy, Why They Buy.

About Pam Danziger and Unity Marketing

Pamela N. Danziger is an internationally recognized expert specializing in
consumer insights, especially for marketers and retailers that sell
luxury goods and experiences to the masses or the 'classes.' She is
president of Unity Marketing, a marketing consulting firm she founded in
1992.

Advising such clients as PPR-Gucci, Diageo, Google, Stearns & Foster,
Tempur-Pedic, Waterford/Wedgwood, Lenox, Prudential Fine Homes, Moen,
Orient-Express Hotels, Marie Claire magazine, Meredith, The World Gold
Council and The Conference Board, Danziger taps consumer psychology to
help clients navigate and master the changing luxury consumer
marketplace.

In recognition of her ground-breaking work in the luxury consumer market,
Pam received the Global Luxury Award presented by Harper's Bazaar for
top luxury industry achievers in 2007.

Her latest book is "Shopping: Why We Love It and How Retailers Can Create
the Ultimate Customer Experience," published by Kaplan Publishing in
October 2006. Her other books include 'Let Them Eat Cake: Marketing
Luxury to the Masses--as well as the Classes," (Dearborn Trade
Publishing, $27, hardcover) and "Why People Buy Things They Don't Need:
Understanding and Predicting Consumer Behavior" (Chicago: Dearborn Trade
Publishing, 2004).

She is currently working on a new book tentatively titled, "The New
Customer Service in the Internet Age."

Contact:
Pam Danziger
717-336-1600

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