VHNWI = “Very High Net Worth Individual”. @Sandyb has not commented on the Bang&Olufsen financial notes since 10/2022 (https://forum.beoworld.org/forums/topic/latest-bo-results-summary/) except piecemeal in @mikipedia’s YouTube streams, but the VHNWI’s and HNWI’s keep cropping up. It isn’t solely B&O… Neiman Marcus stores in the USA once had an oil-rich Texas clientele. “Fortune” magazine just published an interview with its CEO Geoffroy van Raemdonck, who “steered” Neiman Marcus from 2018 into its 2020 bankruptcy and surprisingly is still CEO. Here’s what he knows,…
• Neiman Marcus gets about 40% of its annual revenue ($5 billion) from only 2% of its shoppers, most of whom have net worths of at least seven figures.
• Top customers shop at Neiman Marcus on average 25 times a year and spend a total of $27,000.
… and here’s what he thinks: “There is a very large number of high-net-worth individuals, people worth more than $5 million to $10 million [USD]. 2% of our customers are still [only] a fraction of that population in the U.S. … … We’ve decided that we are no longer about market share, and we are no longer about selling everywhere on the price spectrum … the price is no longer the main consideration. We retain 90% of these customers… I see much more risk in having a one-time transaction where I don’t know if you will ever come back.”
Nice work if you can get it.
But my point is: He is echoing the luxury mantra of B&O. Note this is not the same as Tiffany & Co. (LVMH) who believe they *must* appeal to a broad spectrum of consumers to prevent the luxe boom and bust cycle from killing them, as it did Neiman Marcus and almost did Bang & Olufsen. Accordingly. this philosophy predicts continued B&O price increases (or pruning-up of the product line) with no ceiling in sight.
Sour grapes department: (1) I am not among the USD 5-to-10-million group. (2) Lord save us from Boston Consulting Group alumni like this Van Raemdonck character.
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